How to Find and Calculate the Best Truck Freight Freights

Calculating the best freight rates can be complex. While you need to be competitive, you also need to be profitable. Striking the right balance between supply and demand while setting trucking pricing can be challenging.

To effectively calculate freight rates, you must first account for your fixed costs, or the expenses you pay every month, whether you move goods or not. These include insurance, equipment leases or payments, and necessary permits. Additionally, you’ll need to consider variable costs like maintenance, repairs, taxes, and driver wages. Together, these factors will help you establish your base rate — the minimum amount you need to charge to avoid losses.

For example, if your base rate is $1.80 per mile, any amount above that contributes to your profit. If you aim for a 20% profit margin, you would need to set your rate at a minimum of $2.16 per mile. Understanding how freight rates are determined and knowing your base rate is crucial, but it’s only the beginning of the process. Let’s explore how to calculate and find the best trucking rates for your business.

What are truck freight rates?

The trucking freight rate is the price a shipper or broker will pay you — as the carrier — to haul a load. While a straightforward concept, as you know, rates can vary immensely, even within the same lanes. Having current and accurate information about the average rate for your loads and lanes is essential to pricing and negotiating freight rates properly.

How are trucking freight rates calculated?

Trucking rates are calculated on a per-mile basis. First, take the mileage between the starting and destination points. Then, divide the total rate by the miles between destinations to get your freight rate.

For example, let’s say you have a load headed to Miami from Atlanta. Depending on your exact pickup and drop-off locations, the distance is roughly 675 miles. If the total charge for this load is $3,200, you would calculate the per-mile freight rate as 3,200 divided by 675, which equals about $4.74 per mile.

Of course, calculating the overall rate to charge will depend on various factors besides just the mileage.

Key factors influencing freight rates

Consider the following factors when determining your freight delivery rates:

1. Available routes and loads

A big part of calculating rates is determining your fleet and driver availability and capacity, along with the available routes and the loads you’ve already taken on. You may want to charge more for a problematic load or one that will require you to reroute a driver significantly.

2. Shipment weight

The weight of the shipment is a significant factor. To control costs, you must carefully manage your fleet’s overall weight loading. Heavier shipments typically command higher rates. Starting with a higher base rate for heavy loads puts you in a better position to negotiate discounts while ensuring the most total revenue.

3. Freight classification

Each type of shipment in the freight logistics industry has a specific classification. The National Motor Freight Traffic Association (NMFTA) has defined 18 classes of commodity shipments. Several factors determine the freight class, including:

• Product density
• Liability
• Product value
• Handling needs
• Stowability

Together, these factors determine the load’s transportability. Less transportable loads often command a higher rate.

4. Shipping method

There are five basic freight shipping methods:

• Full truckload (FTL): As you’d expect, FTL applies to a shipment that takes up an entire trailer. Whether it’s the smallest or largest truck in your fleet, you’re using up the whole space within your hauler. Typically, FTL freight will exceed 15,000 pounds.
• Partial truckload (PTL): When a load doesn’t fill an entire trailer, it’s a partial truckload. Carriers can take on multiple shipments to earn more per mile and maximize their earnings per trip. Partial truckloads are typically point-to-point, so freight loaded onto a truck stays on board until its destination. But with different shippers, there might be different locations. PTLs are charged per mile and pro-rated by weight and dimension.
• Less than truckload (LTL): A less-than-truckload shipment is similar to a PTL in that it doesn’t take up an entire trailer. However, it might need to move between vehicles during the shipping process. Rates will vary depending on whether you can match loads from freight brokers with similar destinations.
• Intermodal: An intermodal freight shipment involves multiple shipping methods. For example, it’s intermodal if a load needs to ship by road and rail. Because non-road carrier rates are usually less expensive, intermodal shipping typically costs less. But it can also be less profitable for freight carriers if you’re not careful about estimating rates.
• Expedited: The highest rates typically come from expedited shipping. Freight transported in express shipping lanes, such as overnight or direct routes, commands higher rates.

Dry van rates

Besides freight type, weight, and density, dry van rates are also impacted by other factors:

• Distance: The most significant factor is delivery distance, which involves gas, vehicle wear and tear, and mileage. Rates also need to be calculated based on whether you’re using an established shipping lane between hubs or major cities or if it’s a rural or atypical route.
• Supply and demand: Market fluctuations can dramatically impact trucking rates. When setting rates, you must consider the number of trucks and drivers available and what you’ve already committed to handling.
• Seasonal demands: Rates can also vary by season. For example, summer is often a heavy time for shipping fresh produce from agricultural areas. This can significantly impact the number of available trucks and increase rates.

Reefer freight rates

The same factors that apply to dry van freight also apply to reefer freight shipments of goods that require temperature control. Also, you need to consider additional regulations that can impact pricing.

While all loads are subject to some regulations, perishable goods such as produce must follow additional state and local regulations. For example, some items might require inspection before being shipped across state lines. Other cargo types must be shipped locally or only in designated areas, which can add costs due to loading, unloading, or working with other third-party carriers.

What types of trucking freight pay the best rates?

To maximize your profitability, you’ll want to move more freight that pays a higher trucking freight rate. Routes and cargo also impact rates. Generally, the following categories yield better compensation:

• Flatbed freight: Typically, flatbed rates are the best, but those can also vary if you’re carrying special equipment or a large haul that can’t fit into a container. LTL shipments typically pay higher rates than full truckloads because drivers make multiple stops and might need to handle loading and unloading.
• HAZMAT freight: As you might expect, hauling hazardous materials carries some inherent risks. You’ll also need a special endorsement. These two factors raise the rates you can charge.
• Ice road freight: Likewise, driving on a road made of pure ice isn’t for the faint of heart. Ice road truckers command the highest rates of all, and you can still drive traditional routes during the off-season.
• Liquid and gas tankers: Liquid and gas loads tend to be unstable. Safety is paramount, and you will need a special endorsement. Expect to charge more for these challenging loads.
• Oversized freight: Transporting heavy machinery and other oversized loads takes specialized skills and licensing. Because the job is so complex, the rates tend to be higher.

How to find the best trucking freight rates

As you can see, competitive trucking rates vary dramatically, depending on everything from the type of equipment you have to the routes you drive and the cargo you transport. Your base rate is the minimum you need to make to break even, but your actual rates may be significantly higher based on your choices. Truckstop offers numerous tools to help carriers negotiate the best rates.

Gauge load activity by origin and destination.

Perform unlimited load searches. Find out how many trucks are already in the lanes you want to travel and whether negotiations will be favorable, balanced, or unfavorable. If you have several available trucks in your chosen lanes, you might need to adjust your rates downward to stay competitive. In contrast, if there are fewer trucks than loads, it could mean a more favorable market for negotiating higher rates. Tools like Truckstop Load Board provide valuable insights into load density, helping you make informed decisions.

Monitor load-to-truck ratios.

Load-to-truck ratios can help you negotiate rates. In general, as the number of available trucks rises, rates go down. As the number of available loads rises, rates go up. Monitoring load-to-truck ratios can strengthen your negotiations. If you notice a favorable ratio with high demand for loads, you can ask for higher rates. However, if competition is high and the ratio is not in your favor, you might need to be more flexible with your pricing.

Search for high-paying loads across lanes.

Find out which loads pay the highest rates, regardless of which lane you choose. Use load boards and freight matching platforms to find the loads that offer better rates. You can increase your profits by diversifying your routes and focusing on higher-paying opportunities. Keep an eye on seasonal demands and industry trends. These trends can impact the lanes that are most lucrative at any given time.

Get rate recommendations by lane and load type.

Rate Insights, a feature of Load Board Pro, combines real-time data with monthly trends to give you recommendations to set your rates confidently. Find truck freight rate trends and estimates on the Truckstop Load Board. You can check rates against hundreds of thousands of daily loads. You can see what loads are available and view rate data by filtering your results based on location, destination, trailer type, weight, dates, and other factors.

Leverage the Truckstop Load Board to get the best rates.

Using the above strategies and our tools, you can effectively navigate the complexities of the trucking industry and find the best freight rates. This knowledge can enhance your negotiating power, contributing to greater success and profitability for your trucking business.

For comprehensive insights into trucking freight rates, leverage the Truckstop Load Board. This platform makes it easier to find competitive pricing. Say goodbye to “guesstimates” with Truckstop. Predictive data analysis helps you plan and compare your rates against regional trends to make the best freight rate decisions. Sign up today or request a free demo.