LTL Costing Exercise Your task is to calculate the cost of this shipment and determine what is the minimum rate that the carrier should charge for this shipment per hundred weight (cwt) Equipment Cost Data Equipment Purchase Price 1. PUD tractor=$43,600 2. LH tractor =$65,000 3. PUD trailer $14,000 4. LH trailer $19,000 The shipment consists of 25 cartons, each weighing 30 pounds and measuring 15 cubic feet. The carrier's trailers have a weight capacity of 40,000 pounds and 2,880 cubic feet. This shipment then occupies 1.875 percent of the trailer's weight capacity and 13 percent of its cubic capacity. Because the cubic feet requirement is greater, it will be used to allocate costs in the line-haul. Depreciation Tractors- five-year straight line 2. 1. Trailers- eight-year straight line Interest 1. Tractors 10 percent APR for five years 2. Trailers10 percent APR for eight Route and Time of Movement ears Fuel The shipment is picked up by the carriers driver in a pickup and delivery (PUD) city tractor/trailer unit on June 1, 2005, as one of 18 stops made by the driver that day fronm 0730 EST to 1730 EST. The stops covered a total of 40 miles within the Altoona, Pennsylvania satellite terminal service area. The shipment was one of three handled by the carrier at this particular shipper's location. Once the pickup vehicle returns to the Altoona terminal, it takes 30 minutes to move the shipment from the city unit across the dock to the line-haul trailer 1. $2.00 per gallon for diesel 2. PUD tractors-five miles per gallon 3. LH tractors4.5 miles per gallon Labor Cost 1. PUD drivers- S25 per hour 2. Dock handlers-$22 per hour 3. LH drivers $25 per hour Miscellaneous 1. Terminal variable cost per shipment at both origin and destination - $1.50 2. Terminal fixed cost per shipment at both origin and destination PUD equipment maintenance cost - $.35 per mile $2.50 3. The line-haul tractor/trailer departs from the Altoona terminal at 2300 EST on June 1 and arrives at the Cleveland break-bulk terminal, which is approximately 220 miles from the Altoona satellite, at 0400 EST on June 2. The shipment moves from the line-haul trailer across the dock to a PUD city tractor/trailer unit in 30 minutes equipment maintenance cost - 5. PUD equipment insurance cost - 6. LH equipment insurance cost S.23 7. Billing cost $1.95 per bill $.35 per mile $.23 per mile per mile Equipment is available 365 days, 24 8. The shipment is delivered to the Cleveland consignee by the PUD driver in a PUD city tractor/trailer unit on June 2 as one of 12 stops made by the driver over the period 0830 EST to 1800 EST. The stops covered a total of 55 miles in the Cleveland area. This shipment is one of five delivered to this particular consignee by the driver hours per day 9. Administrative/overhead cost10 percent of total cost of move Information Sheet (LTL costing) hrs miles hrs hrs miles hrs hrs miles Pickup Time Distance Dock time Time Distance Dock time Time Distance Line-haul Delivery per day per day per hr per hr per day per day per hr per hr per mile per mile Depreciation PUD Tractor PUD Trailer LH Tractor LH Trailer PUD Tractor PUD Trailer LH Tractor LH Trailer PUD LH Interest Fuel LTL Costing Table Types of costs 1. Pick up Amount Unit cost Cost Sec. Total Route costs Depreciation Tractor Trailer Tractor Trailer Interest Fuel Labor Maintenance Insurance Subtotal # of stops Cost per stop # shipments at stop Route cost per shipment Shipment costs Billing Terminal variable cost Terminal fixed cost Dock Total pickup cost per shipment LTL Costing Exercise Your task is to calculate the cost of this shipment and determine what is the minimum rate that the carrier should charge for this shipment per hundred weight (cwt) Equipment Cost Data Equipment Purchase Price 1. PUD tractor=$43,600 2. LH tractor =$65,000 3. PUD trailer $14,000 4. LH trailer $19,000 The shipment consists of 25 cartons, each weighing 30 pounds and measuring 15 cubic feet. The carrier's trailers have a weight capacity of 40,000 pounds and 2,880 cubic feet. This shipment then occupies 1.875 percent of the trailer's weight capacity and 13 percent of its cubic capacity. Because the cubic feet requirement is greater, it will be used to allocate costs in the line-haul. Depreciation Tractors- five-year straight line 2. 1. Trailers- eight-year straight line Interest 1. Tractors 10 percent APR for five years 2. Trailers10 percent APR for eight Route and Time of Movement ears Fuel The shipment is picked up by the carriers driver in a pickup and delivery (PUD) city tractor/trailer unit on June 1, 2005, as one of 18 stops made by the driver that day fronm 0730 EST to 1730 EST. The stops covered a total of 40 miles within the Altoona, Pennsylvania satellite terminal service area. The shipment was one of three handled by the carrier at this particular shipper's location. Once the pickup vehicle returns to the Altoona terminal, it takes 30 minutes to move the shipment from the city unit across the dock to the line-haul trailer 1. $2.00 per gallon for diesel 2. PUD tractors-five miles per gallon 3. LH tractors4.5 miles per gallon Labor Cost 1. PUD drivers- S25 per hour 2. Dock handlers-$22 per hour 3. LH drivers $25 per hour Miscellaneous 1. Terminal variable cost per shipment at both origin and destination - $1.50 2. Terminal fixed cost per shipment at both origin and destination PUD equipment maintenance cost - $.35 per mile $2.50 3. The line-haul tractor/trailer departs from the Altoona terminal at 2300 EST on June 1 and arrives at the Cleveland break-bulk terminal, which is approximately 220 miles from the Altoona satellite, at 0400 EST on June 2. The shipment moves from the line-haul trailer across the dock to a PUD city tractor/trailer unit in 30 minutes equipment maintenance cost - 5. PUD equipment insurance cost - 6. LH equipment insurance cost S.23 7. Billing cost $1.95 per bill $.35 per mile $.23 per mile per mile Equipment is available 365 days, 24 8. The shipment is delivered to the Cleveland consignee by the PUD driver in a PUD city tractor/trailer unit on June 2 as one of 12 stops made by the driver over the period 0830 EST to 1800 EST. The stops covered a total of 55 miles in the Cleveland area. This shipment is one of five delivered to this particular consignee by the driver hours per day 9. Administrative/overhead cost10 percent of total cost of move Information Sheet (LTL costing) hrs miles hrs hrs miles hrs hrs miles Pickup Time Distance Dock time Time Distance Dock time Time Distance Line-haul Delivery per day per day per hr per hr per day per day per hr per hr per mile per mile Depreciation PUD Tractor PUD Trailer LH Tractor LH Trailer PUD Tractor PUD Trailer LH Tractor LH Trailer PUD LH Interest Fuel LTL Costing Table Types of costs 1. Pick up Amount Unit cost Cost Sec. Total Route costs Depreciation Tractor Trailer Tractor Trailer Interest Fuel Labor Maintenance Insurance Subtotal # of stops Cost per stop # shipments at stop Route cost per shipment Shipment costs Billing Terminal variable cost Terminal fixed cost Dock Total pickup cost per shipment