True Rate per Mile After Deadhead

Loaded RPM is not all-miles RPM

The board divides the posted pay by the loaded miles it chose to display. Sometimes those miles are practical. Sometimes they are short. Either way they exclude the empty reposition to the pickup and the empty reposition after delivery if you have not booked the next load. Loaded RPM answers a narrower question: what does this lane pay while the trailer is under a bill. All-miles RPM answers the question the truck cares about: what did the whole movement pay per mile the wheels turned.

Use loaded RPM when you are comparing two postings that have the same deadhead, as a quick sort. Use all-miles RPM before you accept. A higher loaded number with a long empty leg can lose to a lower loaded number that picks up where you already are. The formula makes that obvious. The board will not do it for you.

Revenue divided by loaded plus empty

All-miles rate per mile equals collectible revenue divided by loaded miles plus deadhead miles. Collectible revenue means the linehaul you can invoice, plus accessorials the rate confirmation actually pays and that you will document. It does not mean a fuel surcharge you are not signed up for, a detention clock the confirmation waives, or a stop fee you have not gotten in writing. The denominator is every mile you will run for this trip, including the empty miles to the shipper and any empty miles you must run after delivery before the truck is in a place you can count as home or as the next pickup. If you do not yet know the next pickup, the empty miles after delivery are an assumption. Label them as an assumption. Do not drop them to make the RPM match the board.

Write it as a fraction so the pieces stay visible. Numerator: dollars. Denominator: miles. If you add miles, the rate falls even when the dollars stay put. If you add dollars you will not collect, the rate is fiction.

A 20 percent empty example

Use the figures the comparison needs, and treat them as an example rather than a quote. Loaded rate $2.50 a mile. Loaded miles 100. Revenue $250. Empty miles 25. Total miles 125. All-miles RPM is $250 divided by 125, which is $2.00, before fuel, tolls, or any other cost. The board still says $2.50. The truck ran 125 miles for $250.

The empty share is 25 divided by 125, which is 20 percent of total miles. That is the deadhead percentage for this trip. It is not 25 divided by 100. The deadhead percentage page is the place those two ratios get swapped. If your empty miles are 40 instead of 25, do not keep the $2.00. Recompute. $250 divided by 140 is about $1.79. The method is the point. The $2.50 is only the board price in the example.

Deadhead percent versus deadhead miles

Percent is useful across loads of different lengths. Miles are useful on this load. A 20 percent deadhead on a 100-mile load is 25 miles. A 20 percent deadhead on a 1,000-mile load is 200 miles. The percent matches and the fuel does not. Do not manage the truck on the percent alone. Put the miles in the denominator every time you accept a load. Use the percent when you look back at a week and ask whether empty running is the habit.

Do not import a national average deadhead and subtract it from every posting. Your backhaul, your home time, and your next booked load are the empty miles. A national figure would be a fiction about this reader. If you do not know the empty miles, say you do not know the all-miles RPM yet. Unknown is more honest than $2.50.

Where fuel and tolls go in the same sum

The $2.00 in the example is revenue per mile, not profit per mile. Fuel, tolls, and the rest come out after. You can subtract known tolls from the numerator if you want a revenue-after-tolls figure, and you should label it that way so you do not compare it to a board RPM. Do not subtract fuel and still call the result the rate per mile the broker paid. The broker paid the numerator. Your cost is the break-even comparison.

If the rate confirmation pays a fuel surcharge you will actually bill, put that surcharge in the numerator. If the surcharge is a maybe, leave it out. Tolls the broker reimburses with receipts go in only when the reimbursement is real. A toll you pay and cannot bill is a cost, not a reduction of the broker's RPM, until you are looking at profit.

The number you compare to break-even

Take the all-miles RPM to your break-even, not to the best load you ran last month. Last month's best load did not have these empty miles. A load that beats a memory and loses to your cost is a loss you talked yourself into. If you do not know the break-even, the all-miles number is still worth computing, and the decision should wait until the cost exists. This page will not invent a target RPM.

Practical miles and short miles change the denominator the broker is willing to pay, which changes your true figure even when the truck's miles do not. If the rate con pays 100 miles and the truck will run 130 including deadhead, you are not dividing $250 by 100. You are dividing the pay, which might itself be based on the short miles, by the miles you will actually run. If they pay $2.50 on 90 billed miles, the numerator is $225, not $250. The true RPM is worse than the board. Say so on the load before you accept it. The rate framework can hold the rest of the strategy. The denominator is the whole of this article.

A national empty-mile average is not on that note, because it is not your trip.

A round trip makes the same formula easier to dodge. Outbound pays well, the return is cheap, and the owner averages them in his head as "still over two dollars." Write both legs. Suppose the example's $250 outbound is followed by a return of $200 for 100 loaded miles and another 25 empty miles to get home. Combined dollars are $450. Combined miles are 100 plus 25 plus 100 plus 25, which is 250. All-miles RPM is $450 divided by 250, which is $1.80. The outbound board price never changed. The week did. If the return empty miles are different, recompute. Do not average the two loaded RPMs and call that the week.

Also separate paid deadhead from unpaid deadhead. Some rate confirmations pay a small empty-mile figure. That pay belongs in the numerator, and those miles still belong in the denominator. Leaving paid deadhead out of both sides, or putting the miles in without the dollars, moves the quotient the wrong direction. Read the confirmation for an empty-mile line before you assume every empty mile is unpaid.

If a dispatcher quotes the loaded rate and will not say the empty miles, you do not have an all-miles number yet. Ask for the empty miles before you accept. A refusal to estimate them is a reason to treat the board price as incomplete.

Frequently Asked Questions