Truck Load Rates In 2022, And How To Use Them - Bobtail

In the trucking industry, setting a price is always a balancing act. If your rate comes in high, you won't get jobs. If it's too low, you may find your business struggling. But finding the perfect middle ground isn't always easy; truck load rates vary from one geographic region to the next, and they're always changing with the broader market.

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As you set your rates, it helps to keep an eye on the average spot market rates along your routes. That doesn't mean you should always bid the spot market average, for reasons we'll get into shortly. But average truck load rates provide a great barometer of where your prices sit within the market'as long as you know what to look for. That's especially helpful for those who are just starting out, whether you're building a new fleet or striking out as an owner-operator.

Here's a quick snapshot of average truck load rates at the end of , along with a few tips on how to use them to decide what you should be charging your customers. Stick around for the end of this article, where we discuss a strategy for getting paid faster'no matter what rates you set.

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Where To Find The Latest Load Rates For Trucks

While there are several sources for average truck load rates, the industry leader is DAT. This provider of trucking analytics products aggregates data from its load boards to generate average rates, which they separate by region.

DAT also provides much more detailed rate data, including forecasts, through its analytics platform, RateView, a paid subscription service. In this article, we're using figures from DAT's publicly available Trendlines page.

Defining Load Rates For Trucks

Numbers don't help without context. You can expect to charge differently for loads contracted directly with a shipper than you would for the spot market, and for various trailer types (dry van, reefer, flatbed, etc.). So what exactly do we mean when we discuss load rates?

There are two types of rates that shippers and brokers pay carriers:

• Cents-per-mile, an amount paid per mile between the freight's origin and destination
• Line haul flat rate, a flat fee for carrying the load

While lots of shippers prefer line haul flat rates, statistics on load rates are typically given per mile'so that's the form of payment we'll stick to in this discussion. (It's easy enough to translate a line haul flat rate into cents per mile; simply divide the flat rate by the number of miles from the shipping to the receiving dock.) But there's another factor that may or may not be included in either a per-mile or a line haul flat rate: the fuel surcharge.

Fuel Surcharges In Truck Load Rates

Fuel prices are constantly changing, and to handle this volatility, some shippers and brokers pay an additional surcharge on top of the per-mile or flat rate. This fuel surcharge is an additional per-mile payment calculated to offset the cost of fuel.

It's important to ask shippers or brokers if the rates they advertise include the fuel surcharge, or to negotiate this addition before taking a job.

Evaluating Average Truck Load Rates

Average load rates reflect the mean of sampled rates; they're calculated by adding all the data points, then dividing the sum by the number of data points. That means outlying figures can skew the final result.

DAT controls for this in some ways. They keep two separate databases, one for spot market rates and another for contract rates. They separate fuel surcharges from line haul rates. They also omit short-haul rates, which tend to run higher than long-haul routes. Specifically, DAT's average truck load rates reflect lanes that are 250 miles or longer.

Factoring Backhauls Into Average Load Rates

Trucking companies always want to limit deadhead miles'those return trips with an empty truck'so they're often willing to take a lower rate for these trips. We call those 'backhaul rates,' and while they don't have to be comparatively low, in practice, they often are.

We can't say for sure, since the companies that calculate average truck load rates don't share their data, but it seems likely that backhaul rates would reflect a lower national average than you'd expect for an outbound shipment. That's just something to keep in mind as you set your own rates.

Factoring Expedited Freight Into Average Load Rates

Other forces may skew averages higher, of course. Expedited freight is a great example. Shippers often pay hefty fines if they deliver their goods late. That means, as that due date gets nearer, they're often willing to pay more to get the freight moved. They may even be willing to take a slight loss if it'll be less expensive than paying a fine.

That's just another caveat about relying too heavily on average truck load rates as a guide to what you charge. Maybe we're belaboring the point, but it's worth saying again: Average truck load rates are most helpful for business strategy, not as a way to set your own rates.

Average National Truck Load Rates In Late

According to DAT, the national average per-mile rate'including a fuel surcharge'for dry van shipments was $2.47 per mile as of September . That follows a four-month long decline; the average rate was $2.68 in June of the same year.

Here's how those averages broke down by region:

• Midwest: $2.66
• Northeast: $2.39
• Southeast: $2.44
• Central South: $2.42
• West: $2.46

Flatbed rates averaged higher, at $2.93 per mile in the middle of September . Here's the regional breakdown at that time:

• Midwest: $3.13
• Northeast: $2.88
• Southeast: $3.08
• Central South: $3.07
• West: $2.64

For refrigerated trailers, or reefer units, the average per-mile rates varied a lot regionally in September . The national average was $2.85. Here are those rates by region:

• Midwest: $3.27
• Northeast: $2.71
• Southeast: $2.60
• Central South: $2.78
• West: $2.81

For more recent figures, check DAT's Trendlines page, which updates weekly.

How To Use Average Load Rates

In the trucking business, the origin of a load sets your rate. Say your trucking company runs out of the Midwest. You accept a load that you'll pick up in Texas and deliver to Maine. Which region's rates will dictate what you can expect to be paid?

In this case, it'd be the current rate in Texas, the origin. It doesn't matter where your office is, or where you're delivering the load; the origin sets the rate. Keep that in mind when checking a job's pay rate against the regional average.

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With that in mind, the best way to use average load rates is as a reality check and a strategic signal. If you find that your preferred rate is too far above the average, it could be time for a new strategy'lowering your operating costs, growing your business, or diversifying your routes to cover more regions, for instance.

Setting Effective Truck Load Rates

So if you can't simply charge the average truck load rate, how do you set prices? There's really only one way to set rates that meet your business goals, and that's to know your business inside and out. How much does it cost you to run? How much will it cost next year? What sort of profit margin do you need to meet your goals, whether that's adding new trucks to the fleet, or simply making a decent living as an owner-operator?

To set effective rates, you must know these costs, both fixed and variable. Set a profit margin range that's realistic'often between 10% and 20%'then set your rates based on these calculations. Basing your charges off your business needs is the best path to ongoing success. It's simple math: If you always bid based on the average rate, and that rate dips below what you need to maintain cash flow, you'll run out of cash.

But low rates aren't the only threat to cash flow for trucking companies. The industry operates on slow payment cycles, with shippers and brokers often paying on net-30 or net-60 terms'which means you might not get paid for a job until a month or two after completion.

Freight factoring provides the solution to trucking's cash flow challenges, and Bobtail offers a simple, contract-free way to factor. We offer same-day funding for your trucking invoices, with low rates and zero hidden fees.

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In the shipping and logistics industry, there are many different modes of transport, including ships, vehicles, trains, planes, and trucks. When it comes to the latter, there are also many different classifications to suit different needs. Probably the type of truck you're most familiar with is the standard, with a large trailer attached to its back and moving in six to eight wheels.

However, there is a unique classification of trucks that is well-known in the logistics industry. It's called the bobtail truck, or also known as the bobtail tractor or bobtail trailer. Right now you might be wondering what that is and what exactly it looks like. In this article, we talk about the bobtail truck, including its definition, what it's for, how big it is, and more.

What is a Bobtail Truck?

A bobtail truck is a classification of trucks but with a unique appearance. It is known as a semi-truck, with the same front features but without the usual trailer attached at the back. Hence, it's relatively shorter than a normal truck or tractor.

You might be wondering why it's called a bobtail truck. This name comes from its characteristic of a short tractor. It is strongly related to the bobtail cat with a bobbed and shorted tail. In the same way, a bobtail truck has a short tail because it is not carrying a trailer.

What is a BobTail Used for?

Bobtail trucks are not typically used to transport goods or cargo. Instead, it is what a vehicle is called in between trips when a truck drops off a trailer and goes on transit to pick up a new one. In that duration in between dropping off the old trailer and picking up the replacement, it is a bobtail tractor.

How Big is a Bobtail Truck?

A bobtail truck is significantly smaller than a regular truck because it does not have the advantage of the length of a connected trailer. On average, bobtail tractors are only 24 feet long and measure 13 feet and 4 inches in height and 96 inches in width.

Despite these meager dimensions, a bobtail truck can weigh a hefty amount. Their weight can reach up to 20,000 pounds, including two drivers, full fuel, and DEF tanks. This weight is spread over the front, center, and back of the truck, with 10,000 pounds on the steer axle and up to 9,000 pounds on the drive axles.

This weight, however, is not a one-size-fits-all for all bobtail trucks out there. Some trucks can weigh lighter or heavier, depending on their size and unique specifications.

Why is a Bobtail Truck Dangerous?

Bobtail trucks are essentially regular trucks but without trailers. Removing the trailer changes the weight, length, and volume of the truck, which coincidentally also alters how it's navigated and operated. Without the weight of a trailer, a tractor will behave differently and have less weight in its rear wheels. The weight will be more centered in the front, which makes it unstable on the road.

Inexperienced drivers will have a difficult time driving a bobtail truck. Because of the shift in the center of gravity and the difference in weight without the trailer, braking aggressively or doing sudden maneuvers spin the truck out of control and can cause accidents not only to the driver but also to other motorists and civilians. There have been a lot of instances of bobtail trucks flipping from the front because of sudden braking, injuring the driver and the passengers of the vehicle proceeding it.

A bobtail truck is more dangerous than one with a trailer that adds weight to the rear of the truck. Hence, drivers of bobtail tractors should maintain a bigger distance from other motorists on the road. This is because a dangerous bobtail charge can cause serious accidents on the road.

Bobtail trucks should only be driven by seasoned truck drivers with experience driving without the weight of a trailer. Plus, careful considerations must be taken on the road, such as avoiding bobtailing when the road is slippery and being cautious about its distance from other vehicles, being gentle with the breaks and maneuvering, etc. There are regulations that govern bobtails for the safety of motorists and pedestrians.

Deadheading vs. Bobtailing

Bobtailing and deadheading have a tendency of being used interchangeably, but they are very different concepts that should not be confused with each other. Bobtailing is when a truck drives through the road without carrying a trailer, often because it just dropped off an old trailer and is on its way to pick up the replacement.

On the other hand, deadheading is the term used to refer to a truck pulling an empty trailer to a destination. This usually happens when all deliveries have been made and the trailer does not have any more cargo. The truck will deadhead to its parking slot or facility.

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