It's Not Just About RPM

March 21, 2023

For years, truckers have been using Rate Per Mile to determine which loads are the best, but is this way the most profitable? Is RPM the “true value” of a load? Here at SmartHop, we’re always trying to get better, and are never satisfied with the status quo. So we dug further. And after a year of digging, testing, and more digging, we found a way to calculate the profitability of a load.

Below are the three most important factors to consider when determining a load’s real value and profit potential:

1. Transit Time

As an owner-operator carrier, you need to look at your monthly time . You have to pay all your expenses at the end of the month: your truck payment, your insurance, your trailer payment. So, when booking a load, the most important thing is going to be transit time. For example: if a load is paying $3,000, it doesn’t matter if it’s 100 miles or 500 miles if the shipment takes you seven days to complete. Because in the end, you’re only making $430 a day gross, and that’s BEFORE fuel, wear and tear, and other costs factored in.

2. Location

Where are you picking up, and where is it going? Going to Florida (a dead zone) for $2.50 per mile is not the same as going $2.50 per mile to California, the US’s current hottest state. So, the location where that freight is delivered is the second most crucial thing before considering the RPM or the gross.

3. Gross and Rate Per Mile

What is the load paying? How many pickups and drops does it have? All the details of the load are number three on the list. How long will I be on this load, and where does this load take me? Is it taking me to a dead zone where I’m not going to get out except for a dollar a mile?

We took all of these factors into consideration along with fixed costs such as insurance, maintenance, etc. and created our own SmartHop Profit Calculator so you could find out your “True Load Value.” It provides an in-depth analysis of costs and determines what loads are profitable for your given situation and circumstance.

With this method, our customers saw a 20% increase in their revenue and profits within the first month!  All because they were choosing loads more carefully and not just using RPM but TLV (True Load Value).

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