Let's start this whole thing over:

[QUOTE=Injun;1878218]Okay, here it is. Raw numbers for Year-to-Date:

Pay date.......Amount...........Reserve/Maint
Jan 03*.........$285.78............$246.50
Jan 10.............856.59..............337.90
Jan 17..........1,096.24..............178.10
Jan 24*...........672.88..............143.10
Jan 31.............762.53..............328.10
Feb 07*..........661.85..............212.10
Feb 14............689.25..............280.70
Feb 21............184.74..............245.10
Feb 28..........1765.96..............357.20
Mar 07*...........33.61..............129.40
Mar 14.........1277.56..............319.40
Mar 21...........853.98..............283.90
Mar 28...........936.03..............225.40
Apr 01..........1212.26..............304.70

Totals:.....$11,255.35.........$3,591.60

* Jan 03 was "in the hole" by $470.64 from pay date Dec 27 due to time off
*Jan 24 covered tractor payment with reserve fund-slow freight
*Feb 07 covered all fixed payments with reserve fund-time off
*Mar 07 covered tractor payment with reserve fund-time off

Current reserve fund: $5,203.10

Maint. costs:.....$1,467.75 (1 used drive tire, 2 new steers, allignment, Centramatics-full set and a PM)
Lo-Jack.................$700.00 (from reserve)

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I am not required to place the amounts aside I choose to into my maintenance/reserve. It's by my choice. Therefore, you could consider it as part of that week's settlement to Taiowa.

All amounts are before tax.

Taiowa is a separate entity with its own Tax ID Number. I am an employee of Taiowa Transportation, LLC. As such, I am 1099ed by Taiowa. Any tax or income paperwork from Swift is issued to Taiowa. Not Injun. Injun gets her "salary" from Taiowa.

But, here it is. Now, tear it up......[/QUOTE]

*transferred from general forum*

hope this works and helps many, first number i comment on , you dont look 42

Thanks for doing this Injun. I am hoping it will work out as you want it to. I forsee some very good information coming out of this.

Thanks for putting this out Injun. Can you explain how the lease program wirks at Swift? Also, why is the residule so high, is it interest?

I own trucks and run my own authority. In other words, I am a carrier.

Are the figures under "amount" the net after all expenses for that week? Or is is before all expenses have been paid? Also, are those figures after the maintenance money has been taken out?

It would be helpful if you could break down all of your gross revenue with expenses itemized. Only separating your maintenance with "amount" doesn't tell us much about your costs and ROI, etc.,

Something such as:

Gross Revenue
Fuel
Wages (if you take a salary)
Lease payment
Tires
Repairs (I would consider this separate from maintenance)
Maintenance
PM's (Could be considered part of maintenance)
Base plates and permits
Legal
Accounting/Bookkeeping
Miscellaneous

Net profit/loss

It would also be helpful in understanding your program if you would post your total miles driven, such as paid and deadhead miles. I believe that you are paid on all miles?

G/MAN: Will do. That's the plan. Thank you.

I start with Swift on th 18th after a 5 year absence from trucking. I was thinking about doing L/O this time around and am looking forward to any and all info you can give. Thanks for being so open and honest about your L/O as it is helping me.

Okay: why is the residual so high:

Swift does not actually own the trucks IEL leases out. When you lease a truck from IEL, with the exception of the "for sale" Columbias, you are signing a sub-lease. The concept is basically the same as leasing a car. When the lease is up, you have the option to purchase a 4-year-old used truck as if you had never been in it or turn it in for another rental. It is an entirely separate contract if you choose to purchase the truck. The residual is what the original leasing company (International) is willing to accept for a used Prostar Eagle with 528K miles on it. My residual would be roughly $48K if I wasn't constantly going over miles. Since I do regularly go over mileage, whatever money (9cpm over 11,000) is taken for over mileage is applied toward the residual.

Yes, you can go on the open market and buy a used truck, 4 years old with a little over 500K miles on it and pay whatever price you negotiate with the seller. (Looking in The Truck Paper, the asking price for a 2008 International Prostar Eagle is between $63,900 and $77,500. The one most comparable to what my 2011 will be in 2014, when the lease is up, as far as mileage, equipment and apparent condition is the one going for $66,900.)

IEL is not in the business of selling brand new trucks. It is in the business of sub-letting trucks it is able to lease for a reduced rate simply because of volume. IEL has pre-negotiated a sale price for the person signing the sub-lease with IEL. The sale, while processed in the IEL office, is not between you and IEL, but rather, between you and International with a discounted-for-volume price. Once you decide to purchase, you have to find your own financing company and write a contract with them. IEL is no longer in the picture when you choose to purchase.

Swift does not own lease trucks. When the lease is up, Swift has the same option to purchase that you do. However, Swift does not directly purchase used equipment to place in its Company fleet. In fact, I would venture to guess the new trucks coming into the fleet are leased, just the same as the IEL truck I am driving. For a lower price than I'm paying, I'm sure.

The trucks L/Os have completed the lease on and turned in for another lease are cleaned, refurbished and returned to the original leasing company. (International, in the case of my truck) Most often, they are then auctioned by lot (by International or Kenworth whoever or actually owns them) to outfits like Arrow Truck Sales and the like so they can be offered for $66,900.

I hope this sort of answers your question.

The figures under the heading "amount" are after all costs except taxes and after the maintenance reserve is taken. I separated the maintenance reserve allotment for each week because I do not consider it disposable income, despite the fact I have access to it at any time. Reserve allotment plus "amount" would be the total cash settlement if I was not allowing Swift to hold it. Last week, if I was not setting aside money, cash paid to Taiowa would have been $1516.96.

I am putting away 10cpm for each dispatched mile, so it's easy to see how many miles I was paid for in each week. Swift pays HHG miles at 92cpm loaded, 81cpm deadhead with a fuel surcharge for loaded miles only. Fuel surcharge for the loads I completed between the morning of March 31 until the night of April 6 is 44.8cpm with an added surcharge of 4cpm for West Coast states. Settlements are available on Fridays for all loads completed between Thursday and Wednesday and then paid on Monday.

Okay, fixed costs per week:

$525.00 Tractor Lease
....59.07 Collision Insurance
......5.77 Bobtail Insurance
......3.69 Glass Coverage (optional)
....32.31 Occupational/Accident for Injun
....20.00 Qualcomm Rent
......5.00 Prepass Weekly Fee
...........................................
$650.84 Total


I was paying $15/week for permits, but that is only paid for 36 weeks each year with the final payment of $10 on the 37th week. My performance bond of $1,500 is completely paid off ($50/week) and there was a little matter of catching the previous leaser of this truck up on financials I took over when I accepted transfer of his lease....he was in the hole $900 and had not paid $450 of the down payment. I made these up in $100/week installments until paid off. So initially, my fixed costs included an additional $165/week.

Thanks for posting your numbers, Injun. I believe that IEL is owned by Swift? If that is the case, then I would assume they would not lease to those who were not Swift drivers?

Thanks Injun now I understand the Lease a little better. How much do you set aside for buying the truck or do you have another plan, like leasing another one.

How was the truck and did you have to pay the downpayment when you did this? Does a driver often back out of his lease?

This truck was in really good condition when I got it. It had not been through the Swift shop. The previous leaser dropped his keys through the IEL mail slot on Friday and went home, then I came in on Monday and wrote the truck number down. Everything was closed since it was a holiday, so Tuesady morning, I was waiting for the IEL folks to show up. I had the option of sending it through the shop and paying the full $2,500 down. The previous leaser's down payment would have been forfeited to IEL. Or, I could take it as is and simply take over all financials from the last guy. Since he did such a great job cleaning it, there was only $400 owing on the down payment and he was in the hole by $950 (I think I messed those numbers up previously.) I chose to take it as is with financials. I saved myself $1,150 by doing that...and the last guy got out of it free and clear.

Drivers do back out of their leases fairly frequently. They get into the lease for the wrong reasons, without preparation and without either a plan or business sense. When they realize they are in trouble, they turn to mentoring to make it. When they do this, they lose a nickle each mile, put more wear on the truck, pay more for fuel and maintenance and consistently go over miles and have to pay that 9cpm for anything over 11K. They get further behind. Some take too many advances. Some just spend every dime as they get it. Some have expensive family members. Some just can't get anything set by no matter what they do. These are the guys who eventually fail and turn in their trucks. It happens a lot.

I am setting money away separate from my maintenance fund toward the purchase of the truck. I am right now establishing a customer status at a bank so Taiowa will have a leg to stand on when I, as the business, go to the loan officer and make the request on behalf of Taiowa. If I have at least half the purchase price, plus 10% down, in the account, I am much more likely to get a serious look from a bank for loaning on a truck. My goal is to have the full purchase price and then some available as liquid asset to the company.

Well, then, why would I bother with a loan? Two reasons: to establish credit for Taiowa and for taxes. In business today, you can't do anything without credit. Everything rests on your business credit score from your insurance and loan percentage rates to discounts with vendors to who will even do business with you. This is what I meant when I said I'm establishing a reputation for Taiowa separate from Swift. When Taiowa goes independent, brokers, shippers, well....everybody....will look at that credit score as a means of determining whether to trust my company with their freight. I saw this with Celtic. I won't go into details, but I saw how Celtic did with great credit and with not-so-great credit. Credit scores really do matter for an independent.

Which brings me to another subject: Why did I create Taiowa and register an LLC in the first place? Simple. I have s****y credit. After a divorce, a short sale on my house and being behind on my bills, my personal credit score is abysmal. I don't want to wait another seven years (six, now) for all this stuff to clear before I make my move in this business. I'm not getting any younger and time waits for no one. I take a paltry salary from Taiowa that keeps me just under major taxes, but brings Taiowa down enough to not pay too much either. The Otter was partly right on that.

I do not get any special breaks on corporate taxes despite Tribal status. The business, in order to qualify, must be based from a Reservation. I am not. (There are reasons for this that have more to do with Tribal politics than this discussion, so I'll just leave it at that.) Therefore, I am subject to the same tax structure as anyone else. In my case, it is imperative I keep my business entity, Taiowa, separate from my personal identity, Injun.

Regarding self-employment tax, the guv'mint won't make you pay more tax than your adjusted gross income, after deductions. The key is to know how much you can get paid without going too far over your deductions...try to remain in the lowest tax bracket when paying yourself from your business, yet pay yourself enough to keep your business in a lower bracket as well. All of the money is taxed as it should be. It's just not hit as hard when it's carefully separated and spent.

*whew!* I do believe that'll be enough for today.

That was a mouthful! I appreciate you laying it out there Injun. I will be looking forward to more posts.

Injun, have you ever run the numbers as to how much you would have made as a company driver and compared those to how much you make leasing the truck?

Injun,A comapany driver my whole life,This is good stuff.Gives me an idea if I wanna go O/Op.I'll peak in from time to time.Thanks again.

I don't know how much a company driver with four years' experience gets. I will assume (yeah....don't say it...) 35cpm.

Tomorrow's check of $938.66 was for 2528 miles. For fairness sake, I'm going to add in the maintenance fund money I am not required to set aside and could be putting directly in my pocket.. Total would be $1,191.46. Pre-tax, I received roughly 47cpm, 10 cpm of which I choose to place in a savings account of sorts.

For simplicity, I will assume (here we are again) all miles for the Company guy are paid at the lowest scale for 300+ mile runs. For the same work, he would receive $884.80 before tax.

A difference of $306.66, or 12cpm.

The reason I include my maintenance fund is I have access to that money any time I want it, for whatever purpose I choose. I could be placing it in my own outside account. The biggest reason I place it with Swift is this way, I get to take advantage of national accounts. If I pay with a credit card issued to Taiowa, I do not get this discount. It more than makes up for the interest I am not earning on that money.

Thank you for posting this was thinking about it.
I make .40/.38 depends what side of mississippi I am on

Do you actually like looking in the mirror and seeing that name? Honest question here. What makes you like swift