Leasing onto a company... take Landstar for example.. how is the low rates worth it?

Very good point. I see a lot of people take truck payment into cost estimate, and then when it's paid off they assume their net will increase $2K/month (or whatever the payment is), but that's not accurate. The only saving is the interest charge to the bank (which can be significant), but the truck will keep depreciating with every mile you drive. If you pay $140K cash for a new truck, in 5 years and 600 kmi it's worth about $50K, so that's another 0.15/mile in truck expense. I was thinking if it's more cost effective to buy a truck for $50K and selling it in 2 years for $30K and deal with all repairs?

 

Nobody has mentioned this yet so I will. When you have your own authority, what is your cargo insurance policy for? 100K? What is it at say Landstar? It's in the seven figures, which gives you the ability to have that high value cargo on your truck and getting the rate to go along with it. How about hazmat? Does a 1 truck operation have insurance for it? I highly doubt it! Again if your leased to Mercer or Landstar, you have it and can make great money with it. So your statement of "lower rates" I will have to say is way off. I won't say that the tire and fuel advantages make a difference between being leased on and having your own authority because you can be a NASTC member and get a fuel card through them and save money that way. There are advantages to both, but the bigger question is what fits you and allows your BUSINESS to make a profit, not just you as a person.

 

This is what I am also talking about when I say making profits to your company and not just taking it in as your personal profits. You have to reinvest your money to make money.

 

milskired, the discounts do make a great difference. nastc discount is far less on fuel is far less than mercer or landstar, my discounts this week have avg 40 to 50 cents a gallon. nastc( a fine program) will avg 11 to 15 cents.

when you buy a set of 8 drive tires and get 300 bucks off each one, that's a deal.

in my situation, getting paid within hours of each load with no cost , no having to pay any ifta shortage, company store with equipment at substantial savings (example 4 inch straps 10.00) means a great deal in the overall picture.

but you are dead on in that each person has to find what fits them and their business. there is no one size fits all.

 

I am still new to the whole O/O game. Just starting now! I will say this for whoever it was that said before that buying the truck was the hard part or however they worded it. That part is as simple as handing over the cash or signing the finance papers(whichever you choose), signing the title, bill of sale, and getting the title transferred. Easiest part of everything for me yet was buying the rig.

 

Me and you are usually close to the same page on a lot of subjects but this complete statement that you made is not accurate at all NASTC is cost pluse $.08 the same discount y'all get. Below is my fuel up Friday I instantly get cash price at the pump so I saved over $.50/gal and $.57/gal off credit price.

next 4" straps at most places run $10 if you buy a box of 10, next you show me a tire that you get a $300 discount per tire that's totally inaccurate and a false statement. I have several national tire accounts with discount programs I save at most $150/tire

 

I think that there is an unintended disconnect when people start comparing "leased on" vs. "independent."

Some that are leased on want to highlight discounts on tires, fuel, insurance, etc. and while those are important, let us not forget that there are programs that independents can utilize to obtain discounts on most of that as well, but those programs don't often offer discounts that are equal to what some companies can provide to their owner operators.

Lets take a little closer look at the three biggest expenses in trucking, outside of the initial purchase of the truck. I'll base all of my figures from 100,000 miles per year.

Tires:
We'll use an average of 140,000 miles for the steer tires. The leased owner operator pays $900 for a pair, the independent pays $1400 for the same pair. That is a difference of $500, the cost per mile is .019cpm for the leased o/o, and .025cpm for the independent.

Fuel:
Based on both operations obtaining 6mpg, the leased o/o will pay .549cpm, the independent will pay .608cpm for fuel. These numbers are based on a .35 difference at the pump, although I think that if an independent does his due diligence, he can get the same effective discount as most any leased owner operator.

Insurance:
Leased o/o pays $300 per month, $3600 per year, break that down to the mile and it comes out to .036cpm.
Independent pays $833 per month, $9996 per year, break that down to the mile and it comes out to .099cpm.

If you take the costs per mile from the three expenses, you will see that the independent has a .128cpm higher cost than the leased o/o. Doesn't look that bad until you look at it over the course of a year, that is $12,800 per year that the independent pays above that of the leased o/o.

To be an independent, and for it to make any financial sense in my eyes, they would need to earn at the minimum .25cpm more minimum, than a leased truck for the extra "work" that is involved in running on your own.

Now, these numbers that I used above are arguable, and rightfully so. They are what I feel are a good representation of the cost differences between the two, from my own experiences as a once former independent, and that of a leased on owner operator.

 

Yeah you saved $0.50/gal over the jacked up petro prices. Which means you saved $0.05/gal over the pump price at the Waverly truck stop in Delhi, LA (i20 exit 157). But you paid $0.15/gal more than the pump price at the Quicktrip in Terril, TX (i20 exit 501)

 

But I have the choice to buy anywhere I want with out getting a off network penalty

 

You have to fuel in a network with NASTC. Too much out of network they will boot you out. Gonna have to do that in any scenario to get the best price just how it is.