Hotshot Isn’t Making Money
Last updated:
Hotshot has lower barriers to entry than truckload, which means more competition and thinner rates, and the operating cost per mile isn’t proportionally lower than a Class 8. The operations that work are built on urgency and short deadhead, not on volume.
Why the margin disappears
Cost per mile isn’t as low as it looks. Fuel is better, but maintenance on a hard-worked pickup, tyres, insurance and depreciation add up faster than people expect. Many hotshot operators are running on a CPM they estimated once and never recalculated.
Deadhead hurts more. On a $900 load, 150 empty miles is a much larger share of revenue than the same deadhead on a $2,600 truckload. Hotshot needs a tighter radius than anyone.
Competing on price against truckload. A hotshot rig taking freight a Class 8 could haul is competing against better economics and will lose.
Weight limits leave money on the table when you take loads that don’t use your capacity.
What hotshot is actually for
The premium is for urgency and access, not for hauling. Freight that pays properly is:
- Time-critical: a plant is down, a part is needed today
- Too small for a truckload but too urgent for LTL
- Access-constrained: sites a Class 8 can’t easily reach
- Oilfield and construction support, where response time is the product
If you’re hauling general freight at general rates, the equipment is working against you.
Work out your real cost per mile
Include maintenance at realistic intervals for a truck being worked hard, tyres, insurance, depreciation on both truck and trailer, and your own time. Then evaluate loads on net revenue per mile including deadhead. How to calculate it.
A lot of hotshot operations are running loads that lose money on a CPM that was optimistic when it was estimated and is now out of date.
The changes that work
- Tighten the radius hard. Tighter than truckload; the revenue per load doesn’t support the empty miles.
- Specialise into urgency. Expedited, oilfield, construction support. That’s where the rate premium is.
- Build direct relationships with shippers who need response time. Hotshot is a service business more than a hauling one.
- Stop competing with Class 8 on freight it can carry more cheaply.
Where Hey Bubba! fits
Hey Bubba! is an AI back-office automation platform for fleets. It screens on net revenue per mile including deadhead against the cost per mile you set, and searches continuously, which matters most on urgent freight, where the loads that pay well are covered fastest.
Frequently asked questions
Usually an understated cost per mile, deadhead that’s a large share of a small revenue figure, and competing with Class 8 on freight it hauls more cheaply.
Time-critical and access-constrained work: expedited, oilfield, construction support. The premium is for urgency, not hauling.
Less than truckload. On a $900 load, 150 empty miles is a far larger share of revenue than the same distance on a $2,600 haul.
Last updated:
Meet Bubba,
AI Back-Office
Automation for Fleets
Dispatch, paperwork & compliance - automated.
Just say Hey Bubba!