How to calculate your minimum acceptable freight rate

Break-even rate

break-even = total miles × your cost per mile

Total miles means loaded plus deadhead. Your cost per mile should include fuel, maintenance, tires, insurance, payments, every fixed cost, and your own pay. Work yours out with the cost per mile calculator.

Example: 540 loaded miles plus 60 deadhead is 600 miles. At $1.84 a mile, break-even is $1,104. Any offer below that loses money, counting your pay.

Profit floors

Break-even isn't the goal. Decide the least profit a load must leave on top, in two ways:

• Per mile, so long loads earn their keep.
• Per hour, so slow loads with long waits do too.

One way to set them: start from a weekly profit goal. If you want $1,000 a week on top of your pay, and you run about 2,500 miles over about 50 working hours, your floors are $1,000 ÷ 2,500 = $0.40 a mile and $1,000 ÷ 50 = $20 an hour.

Minimum acceptable rate

minimum = break-even + the larger of (per-mile floor × total miles) and (per-hour floor × trip hours)

Using the larger one makes sure the load meets both floors.

Example: the 600-mile load takes about 13 hours including the docks.

• Per-mile floor: $0.40 × 600 = $240
• Per-hour floor: $20 × 13 = $260
• The larger is $260, so the minimum is $1,104 + $260 = $1,364

Per loaded mile, as a broker would quote it, that's $1,364 ÷ 540 = $2.53. Break-even alone was $2.04 a loaded mile.

Why it's per load, not one number

Your minimum moves with every load: more deadhead raises it, a long wait raises it through the hours floor, a cheap fuel week lowers it. A single "I don't go under $2.50" rule is too high on some loads and too low on others. Work it out each time.

Using it

• At or above the minimum: the load meets your standard.
• A little below: counter. Round the minimum up to a clean number. How much to counter.
• Far below: pass.

Doing it in KRYSTAL

Set your profit floors in your operating profile once. Every report shows the break-even revenue, the minimum acceptable rate, how much more the load needs, and a counter, worked out from your own costs and floors, never from market averages. The exact method.