Friday, December 25, 2015

Video: Add a Freight Brokerage to Your Trucking Business and Information on Trucking Costs

This video summarizes ways to start your own trucking company.   The commentator asks questions
about what may work in terms of purchasing an existing trucking company.  He is the founder of Atex in El Paso, TX.   He has extensive experience in terms of running a business and really focuses on the ways to add a freight brokerage to your existing trucking company.    He also says most brokers will want 10% to 20% for brokering freight.   I think this may be a good option for owner operators looking to cut out the middle man or woman taking a large percentage due to being a broker.    He also includes a website with more information on trucking costs.   Here is some of the info. from
 Trucking Costs
Although freight brokers don’t usually get involved in trucking costs, some own their own trucking business and then supplement their trucking business with freight brokering. Rates and costs are very different between the two. In this topic, you will have a good idea on the trucking costs side of logistics.
First let me say that the examples in this topic are strictly hypothetical. So here we go. ALL trucking costs need to be tracked, not just fuel costs. And these total costs need to be recorded, monitored and analyzed. By knowing your total costs, you can bid competitively rather than out of ignorance or emotion. And you may actually outbid your competitors by knowing your costs and profits.
Here is a formula for cost-based bidding. Again, the following are just hypothetical examples.
Your basic formula is:
Fixed costs
+ Variable costs
= Total Costs
+ Profit
=Gross Revenues
Your fixed costs are those expenses you have even if you are just sitting at home. Fixed costs include:
  • your truck payment,

  • insurance (including health insurance),

  • licenses and permits,

  • accounting and office,

  • plus other required truck costs, and
I’m going to include the fixed portion of the driver’s salary.
Your variable costs are those you have as you are “on the road”. You only incur variable costs when you are moving cargo (or deadheading). So when you are “on the road”, you have both variable AND fixed costs. Variable costs include:
tractor and reefer fuel,
maintenance and repairs,
plus other related costs and
I’m going to include the variable portion of the driver’s salary.