I’ve never understood how containers make any money. Currently loading a box 5 miles from our yard, 3 hour load, then I’ll be off to the rail head 30 minutes up the road to off load where I will probably spend half the afternoon in a queue. Then back to the yard and finish.
There can’t surely be decent money in that?
Juddian, I first got in my Dads truck age 3 and one way or another been involved with haulage since, being now 51. In all that time, haulage hasn’t changed in the way that some companies get better rates and some work for a rate so bad, you know they have to run bent. The wrong salaries have been attracting the wrong people forever. The only difference between then and now is, as another poster mentioned, there are far less small family type firms like mine and more of the big conglomerates run by people whose knowledge of trucks is framed purely by squeezing the cost variables. I no longer worry about what others do, I just try to do what I do the best that I can. I could certainly have more turnover and chase volume, but that doesn’t suit my personal philosophy.
As I’ve mentioned before, we will take on new and young drivers as we have a convenient framework within which to evaluate them and no one lasts if they aren’t up to scratch. But there is rarely an opening because they don’t leave, I have an 80% retention rate, possibly higher and at least 10% of those that leave are doing so because they are retiring. So I worry about my drivers and no-one elses - I can’t influence the wider world of transport. I can’t make other hauliers stop and reflect that, as you point out, you run so that your vehicles are maintained properly or your insurers won’t touch you with a bargepole.
I think I’m getting old 
Over the years, haulage companies have hit the ‘self destruct’ button, probably driven by some of the larger companies originally.
I work in other areas as well as driving. And one of those areas the hourly rates are excellent, and there is virtually no chance you’ll be undercut if you charge the going rate. Because that’s what everyone else charges. We all take a fair slice of the cake, and make a decent living. It’s a bit of a specialist area though, so makes it easier.
In haulage, some companies don’t want a slice of cake, they want all of it. And they are ultimately responsible for a lot of the difficulties in the business. And moving goods from a-b is essentially extremely simple, and requires no special skills. So every man and his dog can have a go…And because you need very little in the way of skills, the easiest thing to bargain with is what you charge…
There is no answer to this. At least, none that would ever happen.
Got a phone call, scania is going to be replaced by a man 
, I bet boss won’t be replacing Ford Fiesta van with a Dacia van 
Haulage has been to cheap for years. The big firms IE Supermarkets, Quarries etc dictate to the haulier how much they will pay for the haulage. A lot of hauliers can’t work their costs out as below.Here is an example, Courtesy of OCR as of 2013.
Cost Unit – cost per load, per mile, per tonne, for example
Direct Costs – can be directly attributed to a cost centre, e.g. standing and running costs
Indirect Costs – cannot be directly attributed to a cost centre
Fixed Costs – costs that do not vary over a period of time, e.g. overheads
Variable Costs – costs that vary on the amount of use of a cost centre
Vehicle Utilisation
Before being able to work out a vehicle costing system, the vehicle utilisation must be calculated. Although the vehicle is available for work 365 days per year, in practice it will be for far less than that amount.
Example of annual utilisation:
Weekends – 104 days
Bank holidays – 8 days
Driver holiday – 15 days
Vehicle repairs – 10 days
Vehicle breakdowns (contingency) – 8 days
Total days not working: 145 days
Annual utilisation 365 days – 145 days = 220 days
Vehicle Standing Costs (Direct Costs)
Depreciation spreads the initial cost of a vehicle over its expected working life. There are two main methods of calculating annual depreciation:
Purchase price of the vehicle less cost of the tyres less re-sale value, divided by the number of years of the expected life of the vehicle.
The initial cost of the vehicle less cost of the tyres is divided by a set percentage for each year of the expected life. Here’s an example:
Purchase price of the vehicle – £34,000 (less 6 tyres @ £250 each) = £32,500 to be depreciated at 20% per annum.
Cost of vehicle less tyres – £32,500
1st year @ 20%: £6,500
balance £26,000
2nd year @ 20%: £5,200
balance £20,800
3rd year @ 20%: £4,160
balance £16,640
Licences
The road fund licence is an annual fixed cost which will depend upon the gross weight and number of axles on the vehicle.
The operator’s licence is a set annual fee for each vehicle authorised on the operator’s licence.
Insurance
The insurance premium will depend upon the operator’s no claims bonus, the type of operation and the experience of the drivers.
Wages
Must be paid whether the vehicle is working or not. Holiday and sick pay must be included, as well as National Insurance contributions, pensions, etc.
How to Work Out Annual Standing Costs:
Depreciation – £4,000
Vehicle Insurance – £2,500
Licences – £3,000
Driver’s wages – £17,500
Annual Standing Costs: £27,000
Vehicle utilisation: 45 weeks, 5 day working week.
Weekly standing costs: £27,000 divided by 45 = £600 per week.
Daily standing costs: £600 divided by 5 = £120 per day.
Standing costs can also be expressed as pence per mile:
Annual Mileage 54,000 miles
Formula: cost x 100/mileage = pence per mile
Example: standing costs: £27,000, annual mileage: 54,000.
Calculation: £27,000 x 100/54,000 = 50 pence per mile
Vehicle Overheads
These costs must be allocated to an individual cost centre. Overheads can be allocated by the number of vehicles in the fleet, tonnage carried by the fleet or mileage run by the fleet.
Formula:
By number of vehicles: cost divided by number of vehicles
By tonnage carried: cost/total tonnage = cost per ton
By mileage run by fleet: cost x 100/total mileage = cost per mile
Example of overheads per tonnage:
An operator’s fleet consists of:
2 vehicles carrying 20 tons each = 40 tons
2 vehicles carrying 15 tons each = 30 tons
2 vehicles carrying 10 tons each = 20 tons
2 vehicles carrying 5 tons each = 10 tons
8 vehicles, total capacity: 100 tons
Business overheads are £8,000
Overheads based on carrying capacity of fleet is:
£8,000 divided by 100 tons = £80 per ton
Therefore:
2 vehicles carrying 20 tons each (£80 x 20) = £1600 per vehicle = £3200
2 vehicles carrying 15 tons each (£80 x 15) = £1200 per vehicle = £2400
2 vehicles carrying 10 tons each (£80 x 10) = £800 per vehicle = £1600
2 vehicles carrying 5 tons each (£80 x 5) = £400 per vehicle = £ 800
Total: = £8000
Example of overheads per mileage:
An operator has a fleet of 6 vehicles with an average annual mileage as follows:
3 vehicles averaging 40,000 miles each = 120,000 miles
2 vehicles averaging 50,000 miles each = 100,000 miles
1 vehicle averaging 80,000 miles = 80,000 miles
Total mileage: = 300,000 miles
If the total overheads of the business are £24,000, they may be allocated to each individual vehicle on a pence per mile basis.
Formula: Overheads x100/Total mileage of fleet = pence per mile
Example: 24,000 x 100/300,000 = 8 pence per mile
Vehicle averaging 40,000 miles (40,000 x 8 p.p.m.) = £3,200
Vehicle averaging 50,000 miles (50,000 x 8 p.p.m.) = £4,000
Vehicle averaging 80,000 miles (80,000 x 8 p.p.m.) = £6,400
These costs must be recovered in the number of days that the vehicle works.
Vehicle Running Costs
These include fuel, oil, tyres, repairs, etc. Running costs are expressed in pence per mile:
Formula: cost x 100 (change to pence)/mileage run = pence per mile
Fuel, oils and lubricants are the highest running costs and should therefore be monitored carefully. The estimated mileage life of a tyre is used to calculate a pence per mile figure for costing purposes, for example:
Estimated life of a particular tyre – 30,000 miles
A vehicle has 6 tyres @ £200 each – £1,200
cost x100/mileage = pence per mile
Calculation:
1,200 x 100/30,000 = 4 pence per mile tyre costs
Detailed records of all repairs and maintenance must be kept and allocated to a particular cost centre (vehicle). The annual costs are divided by the annual mileage.
Cost x 100/mileage = pence per mile
By calculating the standing costs, overhead costs and running costs, an operator is able to analyse the cost of providing a service or charge out rate which can be calculated by one of the following methods:
Standing & overheads costs (daily rate) + running costs (pence per mile charge).
Overall pence per mile rate (all costs on a pence per mile basis).
Filed Under: Advice, Training Tips
albion:
Darkside:
Your company can run an artic for 75p to £1.25 per mile?We get 40p/mile fuel allowance if we use our own car to travel for work, how they get 75p/mile for a lorry would make good reading…
Couldn’t be done!
I was invited to tender for some work, which would have fitted in well with our niche market.
But they had got some transport consultants in…zzzzzzzz. Sure they gave the company a big flashy sales pitch about how they can rationalise costs and create synergys blah blah. Load of waffle about being the right company to ‘partner’ with and how its a collaborative venture ( losing the will to live at that point). And it was all a load of ********* because what they wanted was:
A reverse auction - which means that you get on an internet platform with the other ‘preferred’ bidders and you bid down… So say you decided you could do something for a £1.00 a mile, someone else will say they can do it for 0.99p a mile, so you scratch your head and think OK, I could do this for 0.98…then a third bidder comes in at 0.97. Talk about dispiriting
Then there’s the opposite of that which forms the next bit of the bidding whereby you tell them how much of a rebate you are going to give them for their work
so that would start at 0.5% and someone else will chip in at 0.75%…
All i want to do is say, it’s going to cost £x per mile, you like it or you don’t like it.
The bottom line with transport is that wages is the only thing anyone has to manoeuvre on. There’s some differences on volumes - Stobart is going to get a Scania a lot cheaper than I will, but over the life of a vehicle, it isn’t a huge factor. Fuel is a bit cheaper, but ultimately the cost that is most flexible to an operator is what they can get their staff to work for. But they are under pressure to work for less in the same way that a driver is. A company can only do its best to be the most attractive it can be to command a decent rate, much like a driver has to show that he’s worth more for whatever differential.
As regards the bidding for the contract above, i told them that they were everything that was wrong with modern business practice and we declined to qutote. I know how to make myself popular
Got to live that yellow site
Lost me there alix!
Harry Monk:
Javiatrix:
An average price my company will charge to transport 26 tonnes 200 miles is ~ £150-£250Are you sure you have got these figures right? I’m a subby so I’m not on earth-shattering rates but for a 200 mile movement I’d be looking at between £320 and £400 depending on the customer.
Harry i saw some rates today 50 euro plus ferry from Rainham to France sorry can’t remember exactly and that was Walters how the hell can anyone do it for that!!!
Groupage cheep trip to get over the water for refuel
If everyone ran legal it would put the prices up.
K&N’s latvian reg’d truck had about 5 different numberplates in his hand on thursday morning as he entered france from england, and then proceeded to change his “english” registerd trailer back to latvian.
So how come if the price of diesel has dropped by 33%,plenty of 15 reg plate trucks on the road they still expect men to work for minimum wage?
Always amazed me how many altruistic vehicle operators are out there.They buy “you” a new truck and to justify this they pay you crap money.They buy themselves and their wife a new car but times are “hard”.They install cameras and trackers and somehow its always for “your” benefit.
And these “poor” folk are earning less than you.
Such selfless generosity has always been the way in transport.
We are all employed by saints.
Bking:
So how come if the price of diesel has dropped by 33%,plenty of 15 reg plate trucks on the road they still expect men to work for minimum wage?Always amazed me how many altruistic vehicle operators are out there.They buy “you” a new truck and to justify this they pay you crap money.They buy themselves and their wife a new car but times are “hard”.They install cameras and trackers and somehow its always for “your” benefit.
And these “poor” folk are earning less than you.
Such selfless generosity has always been the way in transport.
We are all employed by saints.
Most of the new vehicles are on finance or lease including their cars. Go to the major dealers and see how many ■■■■■■ backs are for sale, including LGV’s.
Bking:
So how come if the price of diesel has dropped by 33%,plenty of 15 reg plate trucks on the road they still expect men to work for minimum wage?
Because ‘the price of fuel’ was already around 100% too high mostly the result of taxation which hasn’t changed and a reduction of around 30p per litre isn’t 33% anyway and still leaves a fuel price that’s almost 70% too high even if it was.
While there’s always the choice of being an owner driver.But firstly even in that case there aren’t many if any old school wagons left and even if there were they couldn’t meet the fuel consumption target needed to survive in that over priced fuel cost regime.The fact is transport like anything else is only worth what the customer is prepared to pay.In this case the customer isn’t prepared to pay for the cost of fuel which is the problem.All other running costs being more or less equal which just leaves wages as the main variable.
Carryfast:
Bking:
So how come if the price of diesel has dropped by 33%,plenty of 15 reg plate trucks on the road they still expect men to work for minimum wage?Because ‘the price of fuel’ was already around 100% too high mostly the result of taxation which hasn’t changed and a reduction of around 30p per litre isn’t 33% anyway and still leaves a fuel price that’s almost 70% too high even if it was.
While there’s always the choice of being an owner driver.But firstly even in that case there aren’t many if any old school wagons left and even if there were they couldn’t meet the fuel consumption target needed to survive in that over priced fuel cost regime.The fact is transport like anything else is only worth what the customer is prepared to pay.In this case the customer isn’t prepared to pay for the cost of fuel which is the problem.All other running costs being more or less equal which just leaves wages as the main variable.
The customer does pay though, higher fuel cost = higher rate, but then when the price drops so does the rate.
weeto:
The customer does pay though, higher fuel cost = higher rate, but then when the price drops so does the rate.
More like long ago reached the point where the customer can’t pay won’t pay.With a long list of closed down haulage operations on grounds of unviable fuel costs to prove it.Together with loads which would have gone by road now going by rail and an oil market in which the stuff is left in the ground or storage tanks because it isn’t worth using it.
Carryfast:
weeto:
The customer does pay though, higher fuel cost = higher rate, but then when the price drops so does the rate.More like long ago reached the point where the customer can’t pay won’t pay.With a long list of closed down haulage operations on grounds of unviable fuel costs to prove it.Together with loads which would have gone by road now going by rail and an oil market in which the stuff is left in the ground or storage tanks because it isn’t worth using it.
The percentage of goods hauled by rail is very small,compared to the goods hauled by road. Also most goods on trains has been hauled by road, as not many places have railheads.
There’s another topic on here… fuel prices… Who’s seen the boss driving out in his latest Range Rover.■■?
simon1958:
There’s another topic on here… fuel prices… Who’s seen the boss driving out in his latest Range Rover.■■?
If it is his Range Rover. Could belong to the finance company or a lease hire company. On the other hand if he’s worked hard and ploughed a lot of money into the business and taken the risks, he deserves a Range Rover
Dave the Renegade:
The percentage of goods hauled by rail is very small,compared to the goods hauled by road. Also most goods on trains has been hauled by road, as not many places have railheads.
I’d guess many of those involved with container work wouldn’t agree in terms of miles run.
Carryfast:
Dave the Renegade:
The percentage of goods hauled by rail is very small,compared to the goods hauled by road. Also most goods on trains has been hauled by road, as not many places have railheads.I’d guess many of those involved with container work wouldn’t agree in terms of miles run.
A lot of containers don’t go near a rail head. Take a ride along the A14 or A34 if you want proof.
