What do you charge for Delivery of Product?

[Solar_HoneyBee0]

Good evening everyone,

It's been a minute, but i'm back with a question for your experienced minds. As the title states, for those of you who have delivered product to customers, how have you calculated the "going rate?" I have delivered to customers in the past and charged only a modest fee, but I realize now that was probably foolish. What made me rethink my delivery fee is that I recently had to replace several key parts in my 1 ton chevy, which cost upwards of $3,000. Mind you this was for parts only!

So, I have a customer that is interested in a unique lumber product that I can provide. It's a type of slab. Anyways, they claim they will take all that I can provide. The individual is roughly 300 miles away. I was thinking of charging around $2.00/loaded mile, but part of me feels this is too much. At the same time, I got quotes from some friends with larger commercial pickups that do custom delivery and some with semis. Their thought was $2.00/loaded mile was way too cheap! The lowest quote I got was $900 dollars!
On a side note, I recently got a load of logs delivered a short distance (~20 miles) and it was $400. So, I realize that my estimation might be low.

I realize that you have your time invested, vehicle, maintenance, any specific permits, potential breakdowns etc. I'm just trying to get an idea what you all think and have had with your experiences in this area. Thanks all for your time. It's much appreciated. I will try and respond in a timely manner, but i've been busy filling orders, so please bear with me.

[Southside]

After having done it with a pickup, with semis and hiring it out my answer is hire out the trucking to a legal, quality, entity and spend your time making your product.

Trucking is a lot like hay. If that is what you do for a living then you can do it well, but if it's a part of a larger operation then it's always cheaper to hire it out. 

[Percy]

What Southside said..... shipping out a truck on a regular basis is a good thing. Helps set production goals and you will learn lots about efficient packaging and loading, whatever your product may be. We ship all over, alot to Vancouver and sometimes a truck is headed that way empty and favorable rates are offered at times by these trucks to offset empty mile losses...

[Tom the Sawyer]

In general, I agree with Southside.  For any endeavor, trying to figure out a fee is time wasted if you haven't figured out what it costs you to provide that service.  Complying with USDOT requirements, replacement and maintenance costs of equipment, insurance (both vehicle and business liability); it's not just your time and fuel.  Once you have a total annual cost, and divide by probable annual mileage, you should know what it would cost to provide that service.  Use that for your comparison with other shipping options, they may not seem too high.  For me, I figure a minimum of $2 per total mile for use of my F350.

Off your topic, but related to several ongoing discussions:

It is common to undercharge for our services (they're my trees, it'll help me get some business, it's only part-time, etc.,).  Let's assume that things go great for you, you are selling X for $$ and putting money in your pocket.  If your product attracted a big volume buyer, what would happen if you had orders 100 times what you had produced.  Would you get rich, or would it break you?  The worst answer is, "I don't know".

[WV Sawmiller]

   Very good question and Southside, Tom and Percy provided excellent responses.

  I will now muddy the waters a bit. You say your customer will take all the product you can produce but can you produce all the time? If you have naturally occurring dead time that you cannot over come such as waiting for logs, drying time, etc. then how much spare time do you have on hand to fill? Could you fill that time more productively delivering your product to your customer? Periodically visiting the customer might help you provide a better product or upsell some other products you have or could produce. Can you make more money delivering or producing? What is your risk for either option? Do you like delivering? Would you rather be fishing or golfing or such? I'd think about those matters before I made any final commitments. Good luck and let us know how it works out.

   BTW - my deliveries have been minimal and generally limited to convenience such a dropping off a slab or load of lumber to a customer that I could combine with my other trip to the area or required to close a deal such as a customer wanting lumber but being unable to transport it himself. It is not a service I routinely offer. A disabled vet or a very pleasant young (Okay - or old) lady with a sincere hard luck story or a worthwhile cause will trigger such an offer sometimes.

[YellowHammer]

I do not ship product, but tell the customer that it's his problem, and then point them to UShip, or EShip, on the web.  Most all shipping scheduling for LTL and full freight is done electronically, these and other shipping companies basically post the requirements to a common database that most all truckers watch, and within hours, bids come back.  Very easy and effective.  I just had a 29 foot trailer shipped from Tampa Fl to New Market, Al, 632 miles for $1,000.  Took less than a day, and probably 15 minutes of actual phone time, to get it set up.  Very easy.      

[Cedarman]

Just sent a 16,000# load by hotshot 750 miles.  Cost $1500.00
Send lots of wood by LTL.
A new bug in the ointment is that LTL carriers are charging 70 to 100 dollars extra if the pallet is 96" or longer.  Used to be 120" or longer.
I always ask my customer if they can get by with 95" material or shorter.
If you ship you need to know actual weight of pallet to be shipped.  Longest length, width and height.  Strap it well.
We do short local hauls of 8000# or less for about $2.00 per mile. 
But always try to have several reasons to make the trip, personal or business.

[Solar_HoneyBee0]

Hey everyone,

   Good evening! Just came in for the night. I read the responses and like always they are full of great wisdom.
   Southside, Percy, Tom, and Cedarman you all make great points. I agree with what you're saying, but I almost feel like your production might be larger than mine. I guess I don't really do semi volume at a single time. I mean, I do, but never have had to worry about shipping large amounts like this product. Usually the buyer has a truck in mind or will come get the wood so it's never really been an issue.
   YellowHammer, those services are not familiar to me and they sound like something that I should look into, so thank you for recommending them.
   WV, after reading your response I feel that your answer is resonating with me the most. Going into a bit more detail, you are right about the production time. The wood that i'm getting is not very common. So it takes time to get these logs. Once they're cut, the drying and handle time is a little bit, but not too bad. There is definitely down time when I could deliver the product without affecting my schedule. You mentioned if I mind delivering, and the truth is I don't think I would mind it. I have a CDL so the driving and all of that isn't an issue.
   I guess I was more or less wondering what's "fair." Like Tom mentioned, when I'm calculating out the prices of these products I know i'm coming in rather low, but it makes me competitive (at least in my eyes.) I am pretty happy with my cut of the deal and it seems that people buying have been happy too. With that being said, when I see the amount of some of these delivery prices I think, "*DanG, i'd be super happy with that rate!" And after thinking about it, since it doesn't cut into my production time it shouldn't be an issue. Although like you said Tom, there are A LOT of regulations and other "items" it takes to own and operate a vehicle, especially one used for delivery. I guess when I think about delivery I don't want to have a crazy low price for shipping just to keep the potential business. That's a hard mentality to let go of, but the reality is if I don't charge the right amount for delivery I might end up in worse shape myself.

So, I think i'm gonna crunch the numbers again and I'm gonna reevaluate my thoughts. Since most everyone said that they charge around $2.00 per mile that doesn't seem so outlandish after all. Especially considering that i'm the one delivering the product so there are a lot of associated costs and risks. So, if this individual doesn't like the cost I'll suggest they arrange for the shipping, which would work just fine for me too. I think I was thinking too much into this. I appreciate all of the advice! As always, it has been a tremendous help. Thanks for your time everyone! I will report back on what happens with this specific individual.

[WV Sawmiller]

   Based on the info provided if you do decide to deliver you might want to leave some wiggle room and advise the customer your rate and availability but stress your ability to deliver was temporary and subject to change and that they might have to find another shipper in the future. I.e Don't tie the production of your product to your delivery of it.

[Dewey]

I don't care to deliver anymore than  I need to ....  I only deliver within State and charge $2 per mile round trip...If its out of State I use a Broker

[Solar_HoneyBee0]

WV,

Solid advice. I will make sure to make those stipulations clear. That way everyone is on the same page.

Dewey,

I agree. I don't want to deliver more than I need to either. At this time at least It isn't that big of deal for me, but that could definitely change in the future. A broker is a good idea. Is there a certain way you go about dealing with a broker? Do's and Don'ts?

[Dewey]

I'll send you some info

[Solar_HoneyBee0]

Hello Everyone,

Sorry about the novel. If it's an issue remove it and I will try and make it smaller.

    So, me and X (the buyer) talked several times. We agreed on prices for the slabs. It was never straight forward though. X was always trying to heehaw around on the price. Talking about "the retail price" and "quantity" of the slabs being delivered. This definitely gave me pause. He also never wanted any pictures. I mean, I don't sell garbage, but who the hell buys something without at least getting a few pictures of it first? The ole' gut said this guy was a flake and fraud, but the offer was too *DanG good to pass up even if it wasn't true, you know? As for delivery I figured I would be happy at $2.00/mile. X wasn't too thrilled with this price, but explained to him that he was more than welcome to drive the distance to me and pick up the slabs or pay more for shipping. Well, X came back to me and asked if I would meet him about half way. I said sure, but it would be $3.00/mile. I wasn't keen on this and told him there is NO WAY that I was unloading the slabs by hand and if he truly wanted to meet half way than he better have a whole crew to lift these. Mind you I was going to deliver about 30 slabs for the first time and then more on the next delivery. X said that wasn't going to be an issue and that he had plenty of help. X and I set a time and place to meet, which had to be changed because this idiot's "halfway" was more about 20% away from him and 80% from me. ALL of this crap told me that X was a flake/fraud. Just someone you shouldn't do business with, but the offer got the better of me and so we went ahead with the meet.

   On the day of the meet we set the time to meet at 10 am. This would allow plenty of time for them and me to show up. Well, X doesn't show up at 10 am. I wait 15 minutes before I call and text with no answer. 10:30 rolls around and I figure this clown is going to stand me up. I figured I drove all this way that I'll wait 45 minutes more and then leave. Well, 11:15 am rolls around and X is a no show. No call, text, or anything. I'm literally pulling out of the drive way when I get a phone call. X says that they got "delayed" and will be there in 15 minutes. Whatever. I drove all this way and figured i'm there so I stay. X shows up 30 minutes later. To say the least, I am pretty *pithed off at this point and it just became a [I have typed a profane word that is automatically changed by the forum censored words program I should know better] show from there! Remember how X was going to have a whole "crew" with him? Well, apparently a crew was X plus 1 other guy. X appeared to be rather old and the guy he brought wasn't very young either. Now, i'm not saying anything bad about age, but these slabs were insanely heavy! Like, out of 30, only 2 I could pick up with help. So I had no clue how X thought he was going to handle these slabs! X got out of his truck, we said our Hellos, but X never apologized for being almost 2 hours late. I mean, it doesn't fix the problem, but would help on the road to recovery. Well, X looks at the slabs and here is where it gets even better! After looking at the slabs he says, "You know, I know we agreed upon $A, but the reality is that is retail and I can't pay retail. Guys in my area are selling these slabs this size for $B and less. I will probably sell them for what you're asking. So, what i'll do for you is i'll pay you $B for the slabs, which is more fair." Now, mind you $B is $50 dollars cheaper than my price and i'm NO WHERE near retail for these slabs already at my price!

   Needless to say I flipped out. I was professional, but I just didn't care anymore. I told him something along the lines of, "You dicked around with the mileage, so I agreed to meet you half way. Why? Because i'm a decent guy. You said you would be here at 10 am, but are here almost 2 hours later. You said you would have a crew, but you don't. You said you would pay $A for each slab, but now you're going back on your word? I guess you weren't raised Like I was because when a man gives his word, it's his bond. I knew you were a flake and fraud and you just proved it. Where are you going find slabs in your area that are 36'' across for the price i'm asking? You think this price is retail? Are you stupid or just a liar? Because I can guarantee this isn't anywhere in the ball park of "retail." And I know you know that, which tells me you're not only a flake and fraud, but also a conman!" At this point the guy was flabbergasted! I think he honestly thought that because I drove that far I would unload these slabs for less. I sell these slabs to plenty of other people and know what they sell them for and i'm no where near "retail."

    At this point the guy is looks like a fish out of water. His mouth is gaped open just staring at me. He goes, "Alright, alright! Easy buddy! I'm just joking! I'll pay you $A for them. Gezz, I was just testing the waters." At this point I had enough with this piece of trash. So I said, "X, you're not someone I want to ever do business with again. If you want these slabs here and now they're now $C (which was $100 + on each slab). You have 15 seconds to decide, but once you do don't ever call me again."

    X didn't take the slabs and I went home empty handed. So, the deal didn't work out. I'm surprisingly not bitter. I knew the deal was too good to be true, but I didn't listen to my gut. Listen to your gut people! I guess it could have been worse, but it's a hard lesson learned. Maybe someone will learn from my mistake and be better for it. By the way, X has called and left messages, each saying he will take my slabs at price $C, but i'm not falling for that scam again. Be safe out there guys. Hope I can at least give you a laugh!

[Old Greenhorn]

Good story! Lesson learned. But I think if it were me, I would sell him all the slabs he wants at $C provided he comes and picks them up. Good for walking away, these guys need a kick in the crotch sometimes.

[thecfarm]

And who is sawing,while you are driving 300 miles? Need to make money driving as you do sawing.
I use to cut wood on my land. I had a few that tried to tell me to buy a truck to deliver my logs to the mill. There again,who is cutting the trees down when I am driving?

[WDH]

I would not sell to him at any price.  It will surely come back to haunt you in some way, maybe more than haunt you. 

[maple flats]

Another point is insurance. If you deliver with your truck, make darn sure your insurance covers it. A personal auto policy will not cover if you are delivering to the customer.
Let them get and hire the truck. You can point them in a direction, but if you do, give them several choices, don't direct them to any specific carrier.

[K-Guy]

Being that I generally don't don't fully trust strangers (I learned that the hard way) I would have asked for half in advance, non refundable if he didn't meet the agreed conditions and had it in writing.

[WV Sawmiller]

   Sorry for your trials and tribulations. I think you handled it well and since you are free and not out on bond probably you probably handled it better than I would have. The closest case I had I will repeat here - I was moving and had some excess firewood and offered it for sale at a price with extra for delivery. A guy called and wanted a load delivered so I loaded it and took my 6 y/o son along for the ride. We pulled up to the guys house (Fortunately it was only 7-8 miles away) backed in as he guided me, got out and dropped the tailgate and he came over and looked at the firewood and said it looked to be well seasoned and he'd pay $X which was about $15 less than we'd agreed. I raised the tailgate, told my son to get back in the truck and when I cranked the truck to drive away the guy agreed to pay the original price. I told him "You can't buy this load of wood." I drove off, stopped and gave it away to a friend on the way home. Best load of wood I ever "sold". I guess the guy figured since I had loaded and driven that far I would not want to return and unload the wood.

   I contracted with a trucker to pick up and deliver a load of "free" red oak logs recently and he finally showed up on a drizzly day and I showed him where I wanted them then he showed me where he could unload them instead. He knew his equipment limitations so I agreed. He said "I don't know you and I've been burned before so I need my $150 up front." I reached in my wallet and pulled out $200 and said "Okay but we agreed on $200." I paid him and after that everything went real smooth. I was a little ticked off at first but I could understand his view - once unloaded I was in the driver's seat instead of him.

    The world's best negotiator I ever met, IMHO, was a local villager I met in southern Cameroon in West Africa. He agreed to take me and my wife and guide up a jungle river and hour or so to visit a pygmy village and I was to pay him at the end of the trip. I guess my guide set it up that way so he did not leave us at the village. We did the trip and when we came back from the village he told me before my wife and I got back in the boat he had to have his money. I guess He figured the same thing for the end of the trip about me possibly wanting to renegotiate the rates. I laughed and paid him what we agreed, we got in and returned. He was definitely in the driver's seat on that deal at that time.

[YellowHammer]

Never ignore your gut.  It's telling you something for a reason, and it's ususally right.

I will play nice, until it's time not to play nice, then I won't play at all.  Game over.  They lose.  See ya. 

I'd block his calls and send any emails from him directly in the Spam folder.  I would not let him waste anymore of my time ringing my phone.

[Tom the Sawyer]

Once every year or two, I cross paths with someone who tries to change an agreement or just outright lies to me.  At that point, we are done.  I don't renegotiate, and we don't go back to the original agreement.  I leave, no apologies accepted.  I may be out my travel costs, or more, but what is the value of the aggravation.  

If they can't get me to do the job, it doesn't get done unless they are willing to haul it a long way; my 'competition' doesn't exist.  One guy even tried to have a friend bring the logs to get them milled, he sent me the same photo the original guy did. My biggest loss was only about $700, an orthopedic surgeon for whom lying came quite easily.

Hard-headed, perhaps, but after 31 years in law enforcement, my tolerance for liars has pretty much been exhausted.   

[muggs]

I once bought a 40 ft. cargo container over the phone. I traveled 80 mi. to get it. Once I got there he changed the price. Then he lowered it a little bit. He thought I would bite after traveling so far. All he saw was my feet going out the door. If he would do that, he can't be trusted. Some people have no honor, I avoid them. >:(

[WV Sawmiller]

   I'm fully with Tom & Muggs in this. Criminals, which includes fraud in my book, cannot be allowed to profit from their misdeeds or they will never stop.

[doc henderson]

I will play nice, until it's time not to play nice, then I won't play at all.  Game over.  They lose.  See ya.

Yellow Hammer channeling a little "road house"!!!   @YellowHammer 

[Peter Drouin]

When I get a customer like that the old pete comes out and they run. ;D