If you’re in the trucking industry, you’ve probably heard of the load-to-truck ratio, also known as the truck-to-load ratio. This is an important metric that can help you determine the profitability of different routes and negotiate the highest rates. But exactly what does load-to-truck ratio mean, how can you calculate it, and what are the best ways to use it?
What are load-to-truck ratios?
The load-to-truck ratio is a simple math equation. To calculate it, divide the number of loads posted on a load board by the number of truck posts. When there are lots of loads, but not many trucks, the load-to-truck ratio goes up. When there are fewer loads, but a lot of trucks, the load-to-truck ratio goes down.
In general, rates go up as the load-to-truck ratio rises. However, there are other factors that can also affect rates. Some runs are more desirable than others, which can vary by time of year. If you’re willing to travel less popular routes, shippers might pay you more for the less desirable run. That’s why it’s always important to check the load-to-truck ratio by state, and even by city pairings. In addition, the load-to-truck ratio could be high in one direction, such as going into a specific city, but much lower coming back out. In that case, you’ll want to negotiate inbound rates that are high enough to compensate.
What does a high load-to-truck ratio mean?
A high load-to-truck ratio means that there are a lot of loads that need to be picked up. The higher the load-to-truck ratio, the more leverage truckers typically have. Brokers may actually compete against each other to find trucks, and drivers may be able to negotiate better rates. In general, flatbeds will see the highest load-to-truck ratios, then reefers, and then dry vans. This is due to the relative number of each type of truck on the road. Fewer trucks of a particular type mean higher load-to-truck ratios, since there are less trucks to haul the loads.
When considering load-to-truck ratios, it’s important to look at trends as well as real-time data. This will help you plan your next few routes efficiently rather than risking one high-paying load followed by several lower-paying trips.
Why should you check load-to-truck ratios?
Load-to-truck ratios can be extremely valuable in helping you consistently find and negotiate the highest rates. There are three main reasons to check load-to-truck ratios:
- Predict future rate changes. Watching trends in load-to-truck ratios helps you predict upcoming changes to freight rates. This can be highly useful when trying to plan your routes. For example, you might see that the load-to-truck ratio is high in your outbound direction, but dropping for the return trip. This might make the roundtrip less profitable than it first seems.
- Inform negotiation strength. When the load-to-truck ratio is very high, you’re in a strong position to negotiate your rates because brokers and shippers need to get freight moving. But a lower load-to-truck ratio gives you less room to negotiate, because there are so many truckers available on that route.
- Plan more profitable routes. Tracking load-to-truck ratios lets you maximize the profitability of your routes. You might decide to do several back-to-back trips along routes with high load-to-truck rates. Or you might triangulate your route, driving between three cities instead of two to maximize value.
Check truck-to-load ratios and negotiate better rates
Finding and tracking truck-to-load ratios is an important step in boosting your profitability. The Truckstop.com Load Board makes it easy for carriers to find loads, compare rates, and view the truck-to-load ratios for different origins and destinations. Get started today.