Guide
Set a minimum rate floor: the number you walk away from
A broker's offer is only a good rate or a bad rate against something. The something is your floor.
In short
- Floor = (loaded + empty miles) x cost per all mile + target profit.
- Count the empty miles to the pickup and from the drop. They are yours to pay.
- Set the floor per lane, not per week. Write it down, so a tired Friday does not decide it.
- All numbers here are example data. Use your own cost per mile.
A floor stops the Friday mistake
Rates get negotiated fast and late in the day. A written floor for each repeat lane removes one decision. Below it, you say no or counter. Above it, you take the load or push for more.
The figure stacks the floor: loaded cost at the bottom, empty miles in the middle, target profit on top. The offer bar is shorter than the stack, and the gap is the money the load loses. Get your cost per mile from the cost per mile calculator, then run each load through the minimum rate tool. For empties, see deadhead miles.
Repeat lanes are where a floor pays off most. You know the empties, the dock habits and the usual payers, so the number you write down is sturdy. For a lane you have never run, start from the lane true cost tool and adjust after the first load.
Build the floor in five steps
Know your cost per all mile
Total monthly costs divided by all miles, empties included.
Count all miles for the lane
Empties to pickup, loaded miles, empties out of the drop.
Multiply
All miles times cost per all mile gives the cost of the trip.
Add target profit
A dollar amount per load or a share you choose.
Write it on the lane card
Floor, date and your cost per mile at that date. Update when costs change.
Floor and what it means per mile
| Line | Miles | Amount |
|---|---|---|
| Empty miles to pickup | 80 | $156 |
| Loaded miles | 600 | $1,170 |
| Empty miles after the drop | 120 | $234 |
| Trip cost | 800 | $1,560 |
| Target profit | $200 | |
| Floor | $1,760 |
Worked example EXAMPLE VALUES
Example data. Cost per all mile $1.95. A broker offers $1,500 for the load above.
| Measure | Value |
|---|---|
| Floor | $1,760 |
| Offer | $1,500 |
| Offer short of the floor | $260 |
| Offer per loaded mile | $2.50 |
| Floor per loaded mile | $2.93 |
800 miles x $1.95 = $1,560, plus $200 makes $1,760. The $1,500 offer is $260 short, and at $1,500 the trip costs more than it pays by $60. Counter at the floor or above it. If the broker will not move, you know exactly what saying yes costs.
Floor mistakes
- Leaving empties out. The truck still burns fuel getting to the pickup. Count it.
- Using a stale cost per mile. Insurance, fuel and payments move. Update the number monthly.
- One floor for every lane. Empties change by lane. Set it per lane.
- Taking the first counter. If the offer is below the floor, say what you need, not what you hate.
Copy and fill in
Keep it factual and short. Save the reply with the load file.
A floor is only as good as your cost
If your cost per mile is stale, the floor is wrong. Refresh it every month or when fuel, insurance or a payment changes. Use the state lane cost tool for lanes you have not run. Keep a dated list of floors, so when you review a lane in three months you can see what changed and why.
We do not give legal, tax or financial advice. Your contracts come first.
Questions
Should the floor be the same for every broker?
The floor is about your cost, so mostly yes. Slow payers may deserve a higher one, since waiting has a cost too.
What if the empties are short?
Then the floor is lower. That is the point of counting them for each load.
Can I go below the floor sometimes?
Yes, if you choose it with eyes open, for a reason you write down, such as a backhaul that keeps the truck moving.
Where do I find my cost per mile?
Use the cost per mile calculator with a month of real costs and miles.
Related: cost per mile, true RPM, deadhead miles, lane true cost, flatbed fleets, all guides.
See what your last 20 loads show.
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