4 Tips to Plan Your Routes…and Make More Money
By Ralph Galantine, Product Manager, DAT Solutions
Freight availability is starting to improve, after a long, quiet winter. You can finally be a little bit choosier about which loads to accept, but rates are slow to ramp up. How can you make more money?
One way to improve your revenue is by focusing on roundtrips. That takes a little planning, but it will pay off. Here are a couple of tips and tricks, to get you started.
Tip #1. GO TO WHERE THE LOADS ARE GOING TO BE.
When you plan your roundtrip in advance, or even your entire week, you’ll look at the loads and the rates that are available in both directions. You want to be the Wayne Gretzky of trucking: Go to where the loads are going to be.
This Hot States Map shows that outbound load volume was high in the Southeast last week, and truck capacity was low. Those darker-colored states represent areas of opportunity for van fleets. Daily maps in DAT Power and DAT RateView show the load-to-truck ratio for 149 individual freight markets in the U.S.
Tip #2. REMEMBER: EVERY BACKHAUL HAS A HEAD HAUL.
There is always more freight and higher rates in one direction than the other. The backhaul might be really low, or the lane might be pretty well balanced. If you have choices, take a load into a place that has good loads to get you back home.
Sometimes, taking a low rate for a relatively short distance can be a good choice. You’re better off taking the worst “buck-a-mile” backhaul, instead of a zero-dollar deadhead, if you can use it to re-position your truck for better opportunities.
Look at the load board to see what’s available in both directions. (DAT load boards show you the average rates that were paid in the last 90 days on each lane, and you can use those for comparison.)
Tip #3. KNOW YOUR MARKETS.
This tip has two parts. Your origin market comes in one of two flavors: head haul markets have higher outbound rates, and backhaul markets have low rates. Some markets are a little bit of both, depending on your outbound direction.
A. HEAD HAUL MARKET. If you’re starting in Memphis, or another place with above-average rates, a little extra planning can turn a so-so roundtrip into a really good one.
- A load out of Memphis might go to Chicago or to Columbus.
- The load to Columbus pays 12¢ more per mile, for about 50 more loaded miles.
- But Chicago has a lot more loads back to Memphis, and the rate is 30¢ higher on the return trip.
- The roundtrip average for Memphis-Chicago-Memphis is $1.60/mile.Columbus pays $1.51.
- But Memphis-Columbus-Memphis gives you 100 more loaded miles. You’ll make $70 more, total.
What’s the best roundtrip? They’re both pretty good, but Chicago is better, even though you get paid a little less for the roundtrip. Why?
- You make almost the same money in two days
- There are more loads to choose from
- You save about $35 in fuel, plus other direct costs, because it’s a shorter trip.
B. BACKHAUL MARKET. Let’s say you’re leaving Columbus, or another place where outbound rates are not so great. You will need to make most of your money on that return trip to your home base. (This strategy can improve your roundtrip, but it doesn’t fix everything. Denver is still gonna be a dead-end. Just stay away, if you can.)
Tip #4. SUPER-SIZE IT.
You can also “super-size” your trip, by turning a roundtrip into a triangular route. We call this a TriHaul. (DAT Express and DAT Power load boards include TriHaul route suggestions, with average rates for comparison.)
- If you are based in Columbus, you might still go to Memphis, because you know the return trip is good.
- Or you could take a load to Chicago first, and then take a second load from Chicago to Memphis. That’s a TriHaul.
- Or you can “kick it up a notch,” as one celebrity chef used to say. Go home the same way: one load from Memphis to Chicago, and a second load from Chicago to Columbus.
Instead of leaving Columbus for a 1,200-mile roundtrip with two loads — one backhaul and one headhaul — now you have an 1,800-mile trip with four loads. That adds about 50% more loaded miles. AND the rate per mile is higher – you average $1.88/mile instead of $1.51.
You’ll also add a day or a day and a half to your trip, but if the schedule works, it’ll be worth it. After that detour to Chicago, you’ll come away with almost $3,300 instead of $1,800. That could be a good week.
Here’s the math:
This “TriHaul Plus” route pays over $1,500 more than a straight roundtrip. Creative route planning can help boost your revenue and profit.
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Note: This article was adapted from DAT’s blog post. It was first published in March, 2016.