Earnings per Load and Mile in Trucking Industry: Insights into Swift and Schneider Transportation

The profitability of trucking companies like Swift Transportation and Schneider National is influenced by a myriad of factors, including the type of freight, distance, specific contracts, and market conditions. This comprehensive guide explores these factors and provides a deeper understanding of how these elements impact earnings.

Per Mile Rates

In the context of long-haul trucking, per mile rates typically range from $1.50 to $3.00 per mile. These rates can fluctuate based on several factors, such as:

Fuel Prices

The volatility of fuel prices directly impacts the cost structure of trucking companies. Higher fuel prices can reduce profitability unless offset by higher tariffs from freight charges or contracts.

Market Demand

Demand for freight can also affect these rates. During periods of high demand, companies may charge more, but during lulls, rates may drop.

Owner-Operators vs. Company Drivers

Owner-operators, who are their own business owners, often earn more per mile than company drivers. However, they are responsible for covering their own expenses, which can vary significantly. In contrast, company drivers typically receive a lower per-mile rate but have fewer financial responsibilities.

Per Load Rates

Per load rates can vary widely, with earnings ranging from $500 to over $5,000 depending on the distance and type of cargo. Some specialized payloads, such as hazardous materials or oversized freight, often command higher rates due to the added complexity and regulatory oversight required.

Factors Influencing Rates

Several factors contribute to the variation in earnings:

Cargo Type

Freight types with higher value or require specialized handling often pay better. For example:

Premium goods, such as electronics, usually command higher rates. Refrigerated goods (reefers) typically have higher rates than dry freight. Specialized equipment or hazardous materials often come with higher rates due to the complexity of transportation.

Distance

Longer hauls may have higher payouts per load due to the higher value of the shipment, but per-mile rates can be lower due to reduced costs over distance. This is a classic application of economies of scale.

Market Conditions

Supply and demand dynamics play a crucial role in determining rates. During periods of high demand and limited supply, rates can rise significantly, while periods with ample supply and little demand can lead to reduced earnings.

Company-Specific Programs

Both Swift and Schneider Transportation offer various programs that can influence earnings:

Dedicated Routes: These routes are customized to specific needs and require committed freight volumes, often leading to more consistent earnings. Contractual Agreements: Specific contracts with shippers can provide stable earnings streams, sometimes at fixed rates that are higher than market rates.

Current Average Rates

As of December 10th, 2016, the national average rates per mile can be summarized as follows:

Freight Type National Average Rate per Mile Dry Freight $1.73 per mile Reefer Freight $1.95 per mile Flatbed Freight $1.92 per mile

These rates do not include fuel surcharges, which are calculated based on average miles per gallon and the national standard fuel rate. Fuel surcharges act as a pass-through mechanism to reflect the cost of fuel in the overall freight rate.

Regional Variations and Market Trends

Since the United States is a large country, regional variations in pricing can be significant. For instance, during the produce season in Florida, rates can be as high as $4.00 per mile for dry and reefer freight. Conversely, during other parts of the year, the same distances might pay only $1.00 per mile.

A tool like DAT Trendlines provides detailed breakdowns of rates per mile for various markets. By examining these heat maps, shippers and carriers can gain insights into the current market conditions and adjust their strategies accordingly.

Understanding the impact of these factors on earnings is essential for both truck owners and operators. Market conditions are constantly evolving, and staying informed can help in making better financial decisions and maximizing profitability.