Hello there, looking for about of advice, I run with my parents a small haulage business. We have had 2 major contracts that we serve using rigids. We have now moved on to artics but have no idea what so ever what to charge (my parents way of working out charges are bait hit and miss)
So I’ve come to you guys for some advice on what to charge to get a simple formula ready to present to them.
Any help would be much appreciated.
Try Harry Monk by a pm he is a recent start od that will know all the current costs & how to price a job…im a bit out of touch myself & last time this kind of question was asked I was told I was very expensive.
fly sheet:
im a bit out of touch myself & last time this kind of question was asked I was told I was very expensive.
I think the issue is that if you price a job at what most people would consider a sensible rate (to cover all your costs and add a reasonable profit margin) then you’re always going to be considered very expensive by a lot of people who think everything should be done for backload money…
Paul
I think a bit more info is needed, ie do you use your own trailers and what type,what weights are you moving,milage,what area are you collecting from/delivering to
if you are pulling a c/s trailer on a sub contrat basis then £1.70 per mile is considered by many to be quite good as many hauliers are on far less!
if you price the job to make a sensible profit after running costs it wont be long before another haulier undercuts your rates!
moose
Moose:
I think a bit more info is needed, ie do you use your own trailers and what type,what weights are you moving,milage,what area are you collecting from/delivering to
if you are pulling a c/s trailer on a sub contrat basis then £1.70 per mile is considered by many to be quite good as many hauliers are on far less!
if you price the job to make a sensible profit after running costs it wont be long before another haulier undercuts your rates!
moose
Thanks for the replys so far.
To answer your questions:
Based: we are based in Northamptonshire
Trailer: Yes we have our own c/s trailer, but on occasion we will pull others but that has ranged from flats of oversized cabins to fleet curtain siders
Type: we specialise in ADR mainly, any thing from corrosives to full loads of vodka so we cover both food and industrial chemicals.
Weights: mainly all our work is liquid based or bag work so running heavy 95% of the time.
Mileage: fairly moderate, depends but there’s no set limits or runs so anywhere our customers want.
The main thing I’m after is how do you calculate running cost (what to add up and factor in) as for us each job is different and some days the unit isn’t even out.
Cheers
You need to charge fixed costs + running costs + profit. Running costs are diesel, tyre wear and driver’s wages (assuming that the driver only gets paid if he works, if he gets paid anyway then that becomes a fixed cost).
Everybody’s fixed costs are different, mine are about £100 per day. For my own work I’d be looking at an absolute minimum profit of £100 per day and nearer £150 (after all costs and my wages) although I would be too expensive for most people, which is why I’m trying to get exhibition/promo work where the customer is normally prepared to pay for service, many having had their fingers badly burned going for the cheapest quote and finding that some Lithuanian has loaded 20 tonnes of groupage on top of an exhibition stand which took six months to build and has turned it into matchwood.
Harry Monk:
You need to charge fixed costs + running costs + profit. Running costs are diesel, tyre wear and driver’s wages (assuming that the driver only gets paid if he works, if he gets paid anyway then that becomes a fixed cost).Everybody’s fixed costs are different, mine are about £100 per day. For my own work I’d be looking at an absolute minimum profit of £100 per day and nearer £150 (after all costs and my wages) although I would be too expensive for most people, which is why I’m trying to get exhibition/promo work where the customer is normally prepared to pay for service, many having had their fingers badly burned going for the cheapest quote and finding that some Lithuanian has loaded 20 tonnes of groupage on top of an exhibition stand which took six months to build and has turned it into matchwood.
Thank you for that Harry,
So what are fixed costs based on?
And does servicing costs tax and insurance come into it?
And lastly how do you calculate tyre wear? Would it be price of the tyre divided by rough life expectancy in miles then adapted to the jobs mileage?
Cheers
Richard
Spooky, i was just chatting to someone about this very subject.
Fixed costs are anything which is a cost whether you move or not, ie: insurance, road tax, yard charges if you’re paying somewhere, MOT, leasing cost for the truck if you’re paying it up, age-related depreciation if you own it.
Variable costs are anything which only cost when you’re driving - fuel, servicing, tyres, and a mileage-related depreciation charge or pence-per-mile charge on our lease.
Depending on how you employ drivers that can be either a fixed or variable cost if you employ permanent drivers or use temps.
The other fixed cost which people forget about is your own wages - you need paid!
As an example … if you’re an o/d running one truck then you might be paying say £1000 a month for the truck, £100 for road tax, £200 for insurance, £250 for a yard, plus £2000 for your wages so that’s £3550 per month before you turn a wheel. Say fuel costs £0.60 per mile, it needs serviced every 10,000 miles at a cost of £500 so that’s another 5p per mile, tyres cost £3000 per set and last 50,000 that’s 6p per mile. Total £0.71 per mile.
If you average 20 days work per month then your per-day cost is £177.50, or £19.72 per hour on a 9 hour day. If you do 200 miles a day that adds £0.89 per mile for your fixed costs plus £0.71 per mile for your variable making a total of £1.60 per mile. You need to allow some room to breathe and pay for one-offs such as punctures so you would want to charge maybe 10% on top as contingency, otherwise any unforeseen costs are coming out of the only only optional cost you’ve got - your own wages!
I’ve just plucked some number out of the air here to illustrate the point, and I may have missed some items out. I don’t run any vehicles so I may be way off, but I have been in business for many years and the principles are broadly the same. If you do more miles per day the per-mile cost would come down a bit as you can spread the fixed costs over more miles, similarly less miles would push your cost up. Hope this helps
One thing to add … on the above numbers you’re only paying yourself £24k. Given that you’re also shouldering all of the risks associated (what if the engine blows up, what if the work dries up, what if you’re ill, etc etc) it’s just not worth it. You’d have a bit of residual value in the truck once you’d paid for it, but it’s still not much reward. Maybe my guesstimates are way off. Hopefully.
Cheers daffy you have been a great help.
fly sheet:
Try Harry Monk by a pm he is a recent start od that will know all the current costs & how to price a job…im a bit out of touch myself & last time this kind of question was asked I was told I was very expensive.
I have always found quality costs Fly Sheet, we have lost customers to cheaper companies and sometimes the come back sometimes they dont.
I think the OP would be better off asking for advice from a OD who has done the distance rather then a newbie to be fair . HTH.