Freight rates: Trucking rates per mile 2021
If you own a trucking business, then you’re probably always on the go. But as most small business owners know, there are times where you need to stop and make sure that your business is bringing in the revenue it should be.
Figuring out the best trucking rates per mile is the key to making sure that your business remains profitable, but it can also be a complex process as rates are constantly changing.
Before getting into the details on trucking rates per mile 2021, it’s important to understand what goes into determining freight truck rates.
In this guide, you’ll find out what is the going rate for trucking per mile and get a refresher on the industry terms to remember as you navigate truck rates.
How to figure out truck freight rates
Like other trades jobs, there is a lot that goes into determining the best trucking rate per mile for your business.
Not only do you have to constantly monitor your fuel spend as well as supply and demand, but you also have to take into account your fixed costs.
But let’s start with the basics.
A truck freight rate is a price a shipper or broker will pay you, the carrier, to haul a load. The concept is simple, but trucking rates per mile can vary significantly depending on the time of year and current fuel prices.
Having current and accurate information about trucking freight rates is essential to properly pricing trips and negotiating rates with your customers.
Trucking freight rates are calculated on a per mile basis. Therefore, the most important number when it comes to calculating truck rates is the number of miles between your starting point and the destination.
Be aware, however, that calculating the overall freight rate depends on various other factors. Below, you’ll find what else you need to consider when calculating trucking rates.
Factor #1: Distance of travel
As mentioned, the distance between destinations is an important part of determining trucking rates per mile.
You want to ensure that you have the right mileage from the beginning to avoid any surprises along the way.
Double-check that your driver will not be required to make any long detours because of road closures. Otherwise, you risk job profitability and timing.
Factor #2: The weight of the shipment
After the distance, the weight of the shipment is one of the most significant factors to consider. It is important to manage the overall weight load for your fleet to control costs.
It’s better to be on the safe side and start with a higher rate, allowing for your customer to negotiate while still ensuring revenue for your business.
Factor #3: Shipment density
The shipment density is another factor that will determine how much room a shipment will take up in your truck.
Once you know the weight of the shipment, calculating the shipment density is simple. All you have to do is divide the cargo weight by its cubic feet.
Cargo weight divided by cubic feet = shipment density
Factor #4: Freight classification
One of the most important industry standards to keep up with is freight classification. The National Motor Freight Traffic Association (NMFTA) has defined 18 classes of shipments.
Freight classification is determined by factors such as:
- Product density.
- Product value.
- Handling needs.
Having a thorough knowledge of how to use these factors to calculate trucking rates per mile will ensure that your business remains competitive and profitable.
Although these are the main takeaways on how to calculate trucking rates, you want to ensure that you have the basic industry knowledge to determine other factors that may influence your truck rates.
Let’s take a look at some key trucking terms to set you up for success.
The terms in trucking you need to know
Keeping up to date with all of the basic trucking terms is an important factor in knowing how to calculate trucking rates.
First things first, there are several types of freight trucks, and they are each ideal to haul different cargo. Your freight type will highly determine your trucking rates per mile, especially considering how much they influence your fuel spend.
Different types of freight trucks include:
- Flatbed freight truck: This is a truck with a flat open trailer attached to the back of the truck with no sides or roof. It’s great for loads that are too wide for a truck. Plus, it makes loading and unloading a breeze.
- Refrigerated freight truck (reefer truck): These trucks contain equipment with a refrigeration unit that transports goods that need proper temperature control. Reefer freight rates are higher than that of other trucks since they use more fuel.
- Dry van: This is what most people picture when they think of freight trucks. They have a non-temperature-controlled sealed trailer attached to them.
Here are some other industry terms to know.
The consignor is the party that is shipping the product you’re transporting. They are also known as the seller and are your customer.
The consignor can be:
- A factory.
- A distribution center.
- Anyone who has entered a contract to ship goods.
The ownership of the products stays with the consignor until the consignee pays them in full, but that doesn’t necessarily mean that the liability stays with them.
A consignee is a recipient of the products being shipped. You can think of them as the buyer, and they can be an individual or a company.
The consignee must be physically present to accept the shipment from the consignor unless specifically stated otherwise in the bill of lading.
Your role in the shipping process will be that of the carrier. The carrier is the party in charge of delivering the products to their destination.
As a carrier, you’re responsible for receiving the bill of lading and safely transporting items to the consignee.
Bill of lading (BOL)
The consignor sends the goods to you, the freight carrier, for shipping it to the consignee. However, the ownership of the freight doesn’t legally change until the recipient of the goods signs the bill of lading (BOL).
A BOL is a document required in the shipping process that involves all parties: the consignor, consignee, and carrier. The consignor and consignee each get a copy of the BOL, and then there is usually a third copy for the bank.
The BOL includes relevant details necessary to ship the product and invoice the transaction correctly once it is completed.
It includes the following information:
- Contact information for the consignor and consignee.
- Specifications and quantities of the products.
- Special handling instructions.
- Rate freight and total amount.
- Terms of payment.
Free on board point (FOB)
Free on board (FOB), also known as freight on board, is a term used to indicate whether the buyer or the seller is liable for goods that are lost, damaged, or destroyed during shipping.
The FOB shipping point indicates that the title and responsibility of goods transfer from the seller to the buyer when the goods are placed on your delivery vehicle.
On the other hand, a FOB destination means that the seller is responsible for the goods until the goods are delivered to the buyer.
Loss and damage
As a carrier, you may have to deal with loss or damage claims from time to time.
A damage claim involves visible damage to either the goods or the storage container that the goods are in. The damage should be noted on the bill of lading or another delivery document.
A loss claim is when a shipment is not delivered or when it shows that it was delivered, but the recipient hasn’t received it. This can be due to typography errors in the bill of lading causing, the shipment to go to the wrong address.
Full truckload shipping (FTL)
Full truckload shipping (FTL) applies to a shipment that takes up an entire trailer.
It doesn’t matter whether it’s the smallest truck in your fleet or the largest. FTL applies as long as you’re using up your entire space. Typically, FTL freight will exceed 15,000 pounds.
FTL will typically cost a higher rate per mile since your truck is at full capacity.
Less than truckload (LTL)
A less than truckload shipment (LTL) doesn’t take up an entire trailer but may need to move between vehicles during the shipping process.
Trucking rates per mile for LTL will vary depending on how far your company will be taking the shipment.
Drayage is a term that involves shipping goods at a short distance via ground freight. Basically, it is the process of moving a large container to your truck.
This may be an extra cost that you have to consider when giving your customer an estimate of the total cost of your services.
Pallets are portable platforms used to package items for freight shipping. Pallets come in different sizes, but the most common size that you’ll find is the standard 40 x 48 size to ship items.
Pallets not only make loading and unloading items easier, but they also allow you to maximize space in your truck. This may reduce your total cost and allow you to provide more competitive trucking rates per mile.
Stop keeping unit (SKU)
A SKU (Stock keeping unit) is a service identification code. They’re usually displayed alphanumerically or as a barcode.
SKUs help track products in inventory as they contain all factors required to identify an item, such as:
A hundredweight, also known as a CWT, is a unit of measurement. In North America, a hundredweight refers to 100 pounds, whereas the British consider a hundredweight to be 112 pounds.
In the past, packages that take up less than an entire truckload were measured by CWTs, but it is not common to measure packages by CWT today. Measuring by pounds or kilograms is now the standard.
What is the going rate for trucking per mile?
In order to continue to offer competitive trucking rates per mile, you have to keep up with evolving industry trends.
Cost per mile is influenced by factors such as:
- Fuel costs.
- Auto repair and maintenance costs.
- Truck insurance.
Financing is also a cost that may influence the cost per mile. The cost of financing trucks and trailers ranges from 0% to 30% of revenue.
As of July 2021, trucking rates per mile remain steady. Here are the current rates for the most popular freight truck types:
- Overall average van rates vary from $2.30 – 2.86 per mile.
- Reefer rates are averaging $3.19 per mile, with the lowest rates being the Northeast at $2.47 per mile.
- Average flatbed rates average at $3.14 per mile.
Fuel prices have been steadily increasing over the past year. The national diesel price is sitting at $3.34 per gallon, seeing a $0.05 increase from June 2021 to July 2021.
Trucking rates per mile 2021 FAQs:
Here are the top questions truckers have in 2021:
- Do trucking companies pay for empty miles?
- What is a good rate per mile for trucking companies to charge?
Do trucking companies pay for empty miles?
Empty miles, also known as non-revenue or deadhead miles, are miles garnered by the truck when it isn’t earning any revenue.
This happens when there’s a load to the destination but no load back. Empty miles range from 33 – 40% of total miles driven, making them very wasteful for your trucking business.
What is a good rate per mile for trucking companies to charge?
Although it is difficult to determine an average rate for trucking rates per mile, if you keep up with industry news, you’ll always have a good idea of average trucking rates.
Trucking rates per mile 2021 averages:
- Van rates are at $2.76 per mile.
- Reefer rates are $3.19 per mile.
- Flatbed rates are at $3.14 per mile.
Keep in mind that these are just averages, and your business may profit from a different rate. Providing the lowest rates may not be enough to bring your revenue, but a rate that’s too high may price you out of the competition.
Why trucking rates are important
Your number one goal is to have a profitable trucking business, and keeping up with average trucking rates per mile is the best way to ensure that your business continues to grow.
To recap, the truck rates you use for your business can be influenced by the:
- Distance between the starting point and the destination.
- Shipment weight and density.
- Type of freight truck being driven.
- Current fuel prices.
By becoming an expert in your field and keeping up with industry trends, you’ll be able to offer competitive prices and attract more customers, meaning more revenue.
Image credit: Zetong Li via Unsplash
Streamline your business with Method
Start your 30-day free trial — no credit card, no contract.