Truck payments are not the end of the world...believe me we have tried everything in the book leasing, buying used, buying fixer uppers from auctions. Finally last year we pulled the trigger on 2016 Freightliner Cascadia Evolution first brand new truck in our fleet. The fuel savings alone was about $300 per week. The truck has a full extended warranty we figure if the truck runs for 3 years without any major breakdown we are still ahead of the game. The breakdowns were absolutely killing s (mind you we have own shop) but with parts, down time, and a pissed driver so far its been the right move.
Driver profit split question
Discussion in 'Ask An Owner Operator' started by TransportQueen, Feb 1, 2016.
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50% and replace or refurbish trucks. two totally different subjects. If you could pay 50% and still make money in that would be the newest recruiting tool the megas would use. -
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25% of let's say gross of $6,000 puts a driver at $1500 before tax. But this allows a company to take "short runs" that pay better. If you run across a 150 mile run for $1000. Driver makes $250 dollars for a 6 hours day lets say. By cpm for him to make the "250" today he has to run about 600 miles at .45 cpm. But on that $1000 150 mile run fuel will cost $60 give or take, driver another $250, which is close to $500 with you're running cost, so you end up with $500 before tax profit but your truck is running only few hours which reduces wear and tear and many other things.
One thing that's good about paid off equipment is while it lasts you can rack up money and also in tough markets stay in business because even if one truck has a major repair you still have 3-4 trucks to pull you out of the hole.
Now as far as splitting 50% with the driver after expenses I would never do. He didn't split the truck payments with you when you had them that increases this new "profit" for him.
On the other hand if you have really good drivers that will take care of your stuff and look to reduce the costs to increase profit such as not idling, avoiding tolls, etc it may work, but if you get hit with a $10,000 repair and truck only profited 4k this week does the driver split that 10k repair?
At the end everyone has their own business model, and if it works for a person more power to them.brian991219 Thanks this. -
How about you just mailing me your money the end result will be the same.
spyder7723 Thanks this. -
You've been in business 3 months. Come back in ten years and tell us how realistic it is.
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Anytime I make a financial decision I calculate backwards.
Insurance - 1,000/month
Truck - $1500/month
Trailer - $1,000/month
That's $3,500 monthly before fuel driver etc.
Perhaps a driver does 12k miles a month average (after home time etc)
Can I pay .50cpm?
That's $6,000
Now what type of fuel price and mpg? Let's say .40 cpm.
That's $4,800
Add $2000 a month for tires/repairs etc rather it's breaking down or not that's $16,800.
This is before the office or tax or tolls.
Do I do factoring? How much do they take?
Now how much do I have to gross to achieve this? At 1.40/mile that covers those expenses. So to put a $5,000 profit in my pocket I would have to gross 25k min because ifta, permits, tolls, taxes, etc.
At average 2.10 a mile I could achieve that. But I need a good driver that's happy with that pay. Can I get that minimum 25k gross on avg 12000 miles a month? Yeah? I'm going for it. No? I'm not going for it.
Obviously there are more costs/lower paid drivers etc, but this is how I plan out any structure of money when I think of "investment". Except I include everything, and see what the bottom line is even in bad situations such as the bad market, and if I'm satisfied with a profit after the headache of dealing with it all. That's why I don't do company drivers even tho I'm debating on it a lot of times. -
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