As a hot shot driver, you have the flexibility to choose your own loads and negotiate your own pay rates.
Generally speaking, hot shot hauling rates are around $1.50 to $2 per KM ( $2.4 to $3.2 per mile). Some jobs, typically urgent ones, pay as much as $4 per mile, but they are not common.
However, these are rough estimates and may not reflect the actual cost of delivery. To get a more accurate quote, you have to ask a reputable hot shot trucking company in your locality.
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So, how to set the best hot shot trucking rates per mile? Simply, you carefully count the fuel and other costs of transport and add a moderate percentage of profit for yourself. That’s how you do it for hot shot trucking.
But, that’s not all. In this article, we will share some more advanced strategies that you will need to set the best hot shot rates for your business.
Whether an amateur or a pro, this article will provide you with the most valuable insights to help you succeed in this niche market.
Table of Contents
How To Estimate The Cost Of Hot Shot trucking rates per mile?
You can calculate hot shot rates based on various factors, such as:
- Distance: Hot shot rates may be higher for longer hauls. Why? It’s because the driver will need to spend more time and resources on the road.
- Weight and dimensions of the freight: Larger or heavier shipments may require more specialized equipment or handling, which can impact the cost of the service.
- Urgency of the delivery: Hot shot rates are typically higher for urgent or time-sensitive shipments, as the driver may need to prioritize the delivery and make accommodations to ensure timely arrival.
- Specific requirements of the customer: Some customers may have specific requirements or requests, such as the need for a specific type of trailer or specialized handling, which can impact the cost of the service.
5 Steps to Calculate Your Rates Per Mile for hotshot trucking
Here’re the simple steps for you to calculate your customized rate for every mile of service:
Step 1: Estimate Fuel Costs
To calculate hot shot rates, start by estimating the fuel cost for the entire trip. This can be done by calculating the distance to be covered and the average fuel consumption of the truck.
Step 2: Calculate All Road Permit and Miscellaneous Costs
Make precise calculations of all the road permit costs and other miscellaneous costs for the trip, such as tolls, insurance, and maintenance expenses. You must include all the costs to ensure that you have an accurate estimate of the total expenses for the trip.
Step 3: Factor in Empty Miles
Consider the distance that the truck will have to travel without any cargo, also known as “deadhead” or empty miles.
This can occur when you have to return from the destination without any freight to transport. So, you should factor the costs of these empty miles into the total cost of the trip.
Step 4: Add Desired Profit Percentage
Once you have a clear idea of the total expenses, add your desired profit percentage to the total cost. We suggest adding a profit percentage of 5% to 10% (or more if you want).
Step 5: Divide Total Costs by Miles Traveled
Finally, divide the total sum of all costs by the number of miles of the trip. This will give you the best and most appropriate rate per mile for hot shot trucking.
7 Must-ask Queries Before Putting Up A Hot Shot Rate
You must ask yourself the below questions before setting hot shot rates for your service:
What is the weight and size of the shipment?
Before setting hot shot rates, ask yourself whether the shipment is larger than what you typically handle or requires special equipment. This factor can increase the costs of transportation. Thus, you should take it into consideration.
How far will the shipment travel?
Longer distances typically require more fuel, more maintenance, and more driver time. As such, the rate per mile should be set on the increased expenses.
Is the shipment time-sensitive or does it require expedited delivery?
If the shipment is time-sensitive or requires expedited delivery, this surely will increase the cost of transportation. So, your hot shot rates should reflect the urgency of the shipment and the priority placed on its delivery.
Are there any additional services required?
Consider whether there are any additional services required, such as special handling or additional manpower for loading and unloading. You should factor these services into your hot shot rates. This will ensure that the transportation costs are accurately reflected.
What are the current market rates?
Before setting hot shot rates, research the current market rates for similar shipments. This will give you a better understanding of what your competitors are charging. Your rates will seem competitive.
What are your overhead costs?
Consider your overhead costs, such as fuel, maintenance, and insurance, when setting hot shot rates. You must factor these costs into the rate to ensure that you are covering your expenses and making a profit.
What is the level of demand for hotshot services?
You must consider the level of demand for hotshot services in your area when setting your rates. If there is high demand for your services, you may be able to charge higher rates. Contrarily, if the demand is low, you may need to adjust your rates accordingly.
Why Are Hot Shot Trucking Rates So Low Now In 2023?
There are several factors contributing to the current low trucking rates, but two significant events have had a significant impact: the COVID-19 pandemic and the conflict in Ukraine.
- The COVID-19 lockdown has caused an increase in demand for goods shipments and home delivery. This has led big trucking companies to recruit a huge stream of new truckers.
Now, after the pandemic, people have started moving things in their own vehicles. That means the need for long-distance delivery of shipments has decreased.
But, since the number of truckers just recently increased, the demand for truckers has gotten low. This has driven down the trucking rates.
- The conflict in Ukraine has also contributed to the low trucking rates. The conflict has led to a significant increase in fuel prices. This has made it more expensive for truckers to operate.
Together, these events have created a situation where there is an oversupply of trucking services and a limited number of available loads, leading to a decrease in trucking rates.
What is hot shot rate for Empty Miles per hour?
On average, an empty trailer stays idle for about 30-40% of the total miles traveled. If you are a freelance hot shot trucker, you may be able to make your client compensate for your empty miles.
If you were paid $2.50 per mile for the loaded trip, you would make $2,500 for the 1,000 miles traveled. However, if you were compensated for the additional 500 miles traveled with an empty trailer, it would result in a loss for the company of $1,250.
But, trucking companies generally do not compensate for miles traveled with an empty trailer. Why? This is because the company is not making any money when the trailer is empty.
So, compensating for empty miles would result in a significant financial loss for the company.
For example, let’s say you pick up a load in Dallas, Texas, and deliver it to Denver, Colorado. After delivering the load, you may have to drive another 500 miles to pick up your next load. During this 500-mile drive, you will likely be driving with an empty trailer.
Assuming your loaded trip from Dallas to Denver was 1,000 miles, and you drove an additional 500 miles to pick up your next load, the total distance traveled would be 1,500 miles.
How to evaluate Hot shot rate sheet
Customized Service: Every customer has unique needs and requests when it comes to truck rentals.
That’s why customized service that is tailored to your specific requirements. A service provider needs to develop a rate sheet that meets all of your expectations. Also, you should get the best size of hot shot trailer that will meet your expectation.
I remark a few of them below:
Competitive Pricing: We understand that cost is a major consideration when it comes to truck rentals. That’s why we offer competitive pricing that is tailored to your specific requirements. Our team will work with you to create a rate sheet that fits within your budget and provides you with the best value for your money.
Flexible Charging: At A Plus Hotshot and Trucking, we believe in providing our customers with flexible pricing options. Whether you need to be charged by the mile, hour or band mile, our team will accommodate your request. This ensures that you only pay for the services that you need and not a penny more.
How does Hot Shot trucking work?
Conclusion
As you can already imagine, the art of setting the right rate per mile is not setting it too high or too low.
Instead, you’ll have to consider all your expenses and costs, analyze the current market rate and then create an optimized rate per mile for yourself.
So, what is the best way to do more research on the current market rates? Just browse through the pages of this very site and you’ll find adequate insights for your particular need.
With the information offered here, you’ll be able to create your appropriate rate per mile in no time.