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Operating Ratio (OR) is a measure of profitability: the ratio of cost to revenue, expressed as a percentage. An OR of 100 means cost equals revenue. Below 100 means the freight is profitable. Above 100 means it is losing money.$0.90 in cost / $1.00 in revenue = 90 OR
BidRight shows two flavors of OR: Historical (what actually happened on past freight in this market area) and Modeled (what the OR would look like at the rate you are considering).

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Historical

Historical OR is built from real loads that ran: actual loaded and empty miles, actual costs, and actual revenue over a recent timeframe. It is the rear-view mirror. It tells you whether freight in this market has been profitable, break-even, or unprofitable lately.

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Modeled

Modeled OR uses the same cost structure as Historical OR but swaps in your proposed rate as the revenue input. As you adjust your suggested RPM in BidRight, Modeled OR moves with it so you can see the profitability impact of a rate change in real time.

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How the OR is built

Both Historical and Modeled OR are composite numbers. They combine three pieces: Diagram showing Inbound OR, Core OR, and Outbound OR combining into FM OR shown in BidRight Core OR — measures one lane’s cost against its revenue: Diagram showing loaded miles, empty miles, and overhead combining into Core OR vs. lane revenue Inbound OR — averages the freight flowing into the origin area, both loaded loads and empty deadheads: Diagram showing inbound loads and inbound empties combining into Inbound OR for freight into the area Outbound OR — averages the freight flowing out of the destination area, again both loaded loads and empty deadheads: Diagram showing outbound loads and outbound empties combining into Outbound OR for freight out of the area Combined, these produce the FreightMath OR (FM OR) — the composite number you see in BidRight. A lane does not exist in isolation. The freight that brings the truck to the origin and the freight that takes it away from the destination both shape whether that lane is actually profitable for your network, which is why all three pieces matter.

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Segment level costing

We believe this is the most accurate and modern way to account for trucking costs available to the industry. For an in-depth explanation of segment level costing, visit the FreightMath reference center.

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