How low can you go?

I've been in this industry for coming up to 15 years, been in transport and logistics in one form or another for 14 before that.

Rates have always been an issue-Despite what your experienced courier tells you through rose tinted glasses

The biggest problem in our industry are the big boys who go in low to ensure they get a contract. They can afford to, they have the volumes that means getting a margin of say 10%, still makes it viable for them

Would you say no to a margin of 10% on a million quid contract?

When you consider the logistics behind the scenes, the extra manpower and the headaches that come with it then i for one would.

Afterall it sets a precident, an expectation that these low rates are infact THE going rate.

With the extra volume the chances of double ups, treble ups, and backloads are obviously much higher BUT at what cost? They'll start running late, letting other customers down, and ultimately damaging their reputation.

We all know how long it takes to get a good reputation, and equally how quickly to lose it

We can all keep ourselves busy running round at silly rates, but is it worth it if you're not actually making any money?

Those rose tinted glases have got a bit smudged over the years.

Rates will never be what you want them to be, they never have been, as we all have different needs, and different expectations.

So have the big boys really damaged our industry, do we want to deal with businesses who aren't prepared to pay for the service level they expect? Or has there always been a two tier sameday service?

I for one, would much rather have steady growth, at a level thats managable, at the right rates, and leave the rest to those that want it

Here endeth my thought for the day

Tis the eBay mentality I think, I quite agree about keeping you feet on the ground and growing organically, how many small companies/OD get into trouble because they have major cashflow problems due to trying to go too big too soon? Seems pointless spending time and money getting vast amounts of work in just to start letting people down,

Rates will only go down if the drivers let them!

I have heard you buy a new top of the range Merc every year, so your in a different league to most of us, so I can't really comment.

Then you have heard very wrongly Mr Stirzaker. If you knew anything of my history you would know how extremely off the mark you are with that comment, but as you don't, then we'll leave it there... Lol

I have a Beamer, bought in 08, and by no means was it new then either

I would rather sit on me ass all day doing things I enjoy rather than keep trying to find work that pays a decent rate. Happy days.

How low I'm prepared to go depends on how much I need the money that month. I usually hold out for a decent hourly rate, but if I'm desperate (and out here in rural Norfolk I do get desperate sometimes) I am forced to accept rates which are indecently low. It's either that or nothing. I'd much rather stay at home, but sometimes I can't afford to.

But usually I hold out for £1 plm, which is what I believe I need to earn a comfortable wage and run my business.

£1 plm? And people moaning bout my rate of 69pplm omg! From here on let me be known as 99pplm courier services

£1 is for a swb Transit. If there was loads of work around here i'd be able to go lower, but there isn't. Anyway, most decent customers / courier companies i've come across are happy to pay £1 plm, so long as they've come to you direct and you're not bidding through an exchange... in which case £1 is oprimistic.

If you charge 69pplm you're earning considerably less than someone who's claiming travel expenses as part of their job, unless you're a beast at getting backloads.

69pplm is a one week "special"

69Pplm Courier Services said:

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69pplm is a one week "special"

Ahh thats ok then lose money for a week

I just starting for 1 month to do courier work with my luton van with tail lift and i charge 1£pm. I dont have many customers but i see the customer i have are happy with this price. Only few of them says i charge to much. Now, my question is. Its ok 1£pm or its higher/lower. Normaly i do removals but i have only 15-20 removals in a month and i want to fill it with courier work. Sorry for my bad english. Thanks, Daniel.

Anyone who moans at £1 for a Luton with a taillift should be shot

I don't have a need for such a vehicle but you should be looking at a minimum of £2 a mile MINIMUM

Running a Luton van at £1 a mile... ... It's not surprising that your your customers are happy with the price!

Speed is spot on what should be charged!

A £1 PPLM for a luton van is disgraceful, as Speed says you should be shot at dawn no wonder your customers are happy, what would you charge us in the trade 70PPLM, I run a vito long i charge my customers more than that.

I've been analising my running costs. Combo 1.7cdti Over the last year I've covered 50k miles at an average speed per journey of 37 mph (amazing what you discover in the sat nav when you're waiting for a collection) Includes a fair amount of london work (too much) fuel is about 12p per mile net of vat Fixed cost 15p/mile (approx £5000 inc tax , ins, servicing, phone etc and £2500 depreciation/ lease if it was a newish van.) To earn min wage of £6.20 @37mph = 17p/mile approx Cost 27p + wage 17p = 44p/mile round trip or 88pplm

So any newbies want to know the reality of being an owner driver you need to be paid around the 88pplm to earn min wage :( 50k @ 37mph is 25 hrs per week 52 weeks per yr on the road.

AM-PM Despatch said:

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So any newbies want to know the reality of being an owner driver you need to be paid around the 88pplm to earn min wage :( 50k @ 37mph is 25 hrs per week 52 weeks per yr on the road.

Only if their circumstances exactly match yours. Just one change to one factor there could make a massive difference. Everyone has to look at their own exact facts to equate the price needed. Without changing any other factors, if you had a big enough workload to work 50 hrs per week your fixed costs would be apportioned differently thus changing your necessary 'pplm'

Scott agree- I did calculate that if I did 75k miles, which would equate to 37.5 hours on the road (not loading or waiting) I would need 78pplm. Thats to earn minimum wage. Less London and more motorway would improve the figures no end. I also have a 5 yr old van which I picked up for £3k with 100k on the clock 18 mths ago which lowers the lease figure but still needs including as the van will need replacing at some stage which needs paying for.

We've been over this 100 times or more

I've done the equations before to show little difference between the "good old days" of 10-15 years ago and todays rate (allowing for inflation etc etc) hence my opening thread

"rates have always been an issue"

The way I look at it, if you don't like the rates you're getting then either charge more, or leave the industry

If you're continuously running around keeping busy, then you're either very good at what you do, or you're selling yourself short, equally if you're sitting around waiting for a call, then you're not as good as you think, or you're charging too much

Its also worth noting that the OD is a benchmark to what we should be charging as Courier Companies

If I keep getting quotes that are higher than they were 6 months ago, then that tells me its time to put mine up too, if OD's keep charging the same then i don't need to put mine up either

(Ok I may be over simplifying this, because what your competitors charge is equally important but you get the idea)

So if anyone is to blame for the rates being charged, I suggest its actually down to you

Work is currently very difficult to get. And as much as I would like to charge 88 pplm, in the real world getting 70 pplm is proving difficult, and that me operating in the 'so called loaded south east'. I am frequently told I am bidding to high even at 70 pplm. Things are very depressing at present. Business has been rubbish since November and has still to pick up. Here's hoping for a pick up soon.

And i get slated for asking 69p on a "special offer"... Oh boy

Know the feeling in the 'loaded SE' 88pplm is minimum we should be getting, reality is a bit different. The problem is the internet! It has made it too easy to get the jobs done at backload prices. The company I do most of my subbying for put al the decent jobs going up north on Courier Exchange and get them done at backload rates leaving the crap into London. Its only when they can't get them covered or are let down that us subbies get a look in. Another downside is that customers are expecting low rates because next day rates are so cheap. I became an owner driver as it was last chance saloon being over 50 and unable to get interviews. My father was a partner in a courier business in the late 80's/ 90's so I knew the ins and outs but the rates are no better now than they were then.

This I find quite bizarre that loyal is expected neigh demanded by courier companies yet the loyalty isn't reciprocated by giving out the decent jobs as they occur, I would be looking around for a fairer company to work for.

Yesterday i put a price on a job on CX, from Milton Keynes to London. It was a 125kg pallet and they need a van with tail lift. I tell my price will be 130£ for 67 miles, They dont call me back, but i see nobody make that job yesterday. It was to much?

I think maybe you answered your own question, £1.94pplm? Nice if you can get it though.

Why would you need a tail lift for 1 pallet at 125kg? 2 men could lift that easily!

AM-PM Despatch said:

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Know the feeling in the 'loaded SE' 88pplm is minimum we should be getting, reality is a bit different. The problem is the internet! It has made it too easy to get the jobs done at backload prices. The company I do most of my subbying for put al the decent jobs going up north on Courier Exchange and get them done at backload rates leaving the crap into London. Its only when they can't get them covered or are let down that us subbies get a look in. Another downside is that customers are expecting low rates because next day rates are so cheap. I became an owner driver as it was last chance saloon being over 50 and unable to get interviews. My father was a partner in a courier business in the late 80's/ 90's so I knew the ins and outs but the rates are no better now than they were then. In 1998 I was An owner Driver in Dublin working for TNT I was getting £110 Irish punts per day doing about 30-40 drops a day and 4 or 5 collections. After I paid for the van and fuel insurance Ect I had a good wage, It seems the volume has gone up and the rates have not.

In 1998 I was An owner Driver in Dublin working for TNT I was getting £110 Irish punts per day doing about 30-40 drops a day and 4 or 5 collections. After I paid for the van and fuel insurance Ect I had a good wage, It seems the volume has gone up and the rates have not.

moray couriers said:

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I think maybe you answered your own question, £1.94pplm? Nice if you can get it though.

Mleage rates? & London? 2 completely different ball games.

Although, I am sure there are plenty out there who expect a small van to go into London dedicated at 70p per mile plus congestion etc.

1van2man said:

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Yesterday i put a price on a job on CX, from Milton Keynes to London. It was a 125kg pallet and they need a van with tail lift. I tell my price will be 130£ for 67 miles, They dont call me back, but i see nobody make that job yesterday. It was to much?

Is it anywonder you didn't get the job, I believe in a fare price to do a job, can I say that is a ridiculously high price, its all about working for a fare price, not to low and not to high, how much profit would the company subbing the job make on your quoted price, you wont get any work at them prices and to be fair you don't deserve any, get in the real world my quote would of been £54.00

With a tail lift... 54 quid... Really?

Michael Lucani said:

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With a tail lift... 54 quid... Really?

You don't need a tailift

HSP Couriers said:

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moray couriers said:

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I think maybe you answered your own question, £1.94pplm? Nice if you can get it though.

Mleage rates? & London? 2 completely different ball games.

Wish I could charge a lot more just because the delivery point is in London

If I do a job into London I don't charge any extra, if I was doing a job say 20 miles from London then I supose you have to, but when I have come over 200 miles I don't feel the need.

3D Courier Services said:

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Why would you need a tail lift for 1 pallet at 125kg? 2 men could lift that easily!

If the customer had requested a tail lift then that's what the customer is paying for, therefore that is what they would have got had it been our customer.

Although it is best to ask the customer why a tail lift is needed for a 125kg pallet, I for one would not be asking any of our drivers to lift off a 125 kg pallet without authorisation and man power support.

For a tail lift vehicle from milton keynes to London - on a simple collect and drop off basis I would expect a subbie to charge anything £90 upwards (inc cong)

How about coming in from MK? Today I'm into Edinburgh/Glasgow, I think for there the rate should double :-)

HSP Couriers said:

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3D Courier Services said:

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Why would you need a tail lift for 1 pallet at 125kg? 2 men could lift that easily!

If the customer had requested a tail lift then that's what the customer is paying for, therefore that is what they would have got had it been our customer.

Although it is best to ask the customer why a tail lift is needed for a 125kg pallet, I for one would not be asking any of our drivers to lift off a 125 kg pallet without authorisation and man power support.

For a tail lift vehicle from milton keynes to London - on a simple collect and drop off basis I would expect a subbie to charge anything £90 upwards (inc cong)

Yes that's a fair price for a tail lift vehicle.

Those who do not charge London accordingly are often the ones who then have a moan as they spent 3 hours of an afternoon plodding along slowly and covered a mere 7 miles due to traffic congestion etc. NOT directed at anyone in particular just a general observation.

As AJ Says, if you're doing a 200 mile job into London there really is no need to charge more (apart from the con charge obviously) but us local lads have to to take into account time as well as mileage.

As for the 125kg pallet needing a tail lift-----2 points, if thats what they want then if i have one i'll send one, if i haven't i'll ask why and suggest the appropriate van I too wouldn't ask anyone to lift that kind of weight between 2

I would assume they've asked for a tail lift cos there's no forklift at the other end, maybe just a pallet truck?

No quotes from here? A distinct lack of anyone with a tail lift is the likely explanation

As for them not ringing back...

Maybe because the next person they rang did exactly what i suggested and sent in a small van at a small van rate

Speed Couriers (Stansted) said:

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As AJ Says, if you're doing a 200 mile job into London there really is no need to charge more (apart from the con charge obviously) but us local lads have to to take into account time as well as mileage.

Rob - why just you local lads? Just for the record - we don't mind paying that little bit extra for subbies who go into London for us. Regardless of whether its 20 miles or 200 miles.

I'm not sayin don't, i'm sayin there's no need cos you're makin the bulk of your money on the distance. London just isn't viable if you were to charge an out of london rate if you're within a 50 mile radius of the place

But if you're outside of that then you have the money on the mileage

Some people are shocked at the quote when you tell them how much, to ask say another £30 would give most people heart failure, if it's a nice day you get to see lot's of totty so that makes up for it.

Can't remember wot a nice day looks like

Speed Couriers (Stansted) said:

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Can't remember wot a nice day looks like

You will, we are due 3 this year.

I dont know how much you charge for this kind of job, but i dont work for nothing. The job was like this: Collect from MK at 12 a clock and delivered at 5pm in london. So i need to wait about 3-4 hours to deliver. I total will be 6-7 hours of work+disel. I ask few days ago here how much will be ok to charge for a luton van with tail lift and someone say about 2.00plm.So i think this is the fair price. Im new in courier work and i dont want to charge to much or to low. In removals bussines,if you search on sites you will see the price to hire a man and a van for house removals are the same. Anyway,thanks for the answers.

1van2man said:

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I dont know how much you charge for this kind of job, but i dont work for nothing. The job was like this: Collect from MK at 12 a clock and delivered at 5pm in london. So i need to wait about 3-4 hours to deliver. I total will be 6-7 hours of work+disel. I ask few days ago here how much will be ok to charge for a luton van with tail lift and someone say about 2.00plm.So i think this is the fair price. Im new in courier work and i dont want to charge to much or to low. In removals bussines,if you search on sites you will see the price to hire a man and a van for house removals are the same. Anyway,thanks for the answers.

That's fine, but you didn't mention the time in between or waiting time, there is a guy on tinternet whomcharges £50 an hour waiting time, so on his prices you are too cheap, sleep tight.

We suggested a price for a Luton with a tail lift, and I'll repeat what I said earlier, the reason you didn't get a reply to your quote is that someone else they rang probably suggested it would easily fit in a small van at a small van rate

And I suggest the reason you didn't get any quotes off mtvan is cos there aren't many (if any) vehicles in that area with a tail lift

AJM sameday Couriers said:

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If I do a job into London I don't charge any extra, if I was doing a job say 20 miles from London then I supose you have to, but when I have come over 200 miles I don't feel the need.

I'll second that... But Im dealing direct with companys and not subbing, so my price is high anyway.