How much profit per mile??

Discussion in 'Ask An Owner Operator' started by Nuttinlikeanap, Nov 30, 2007.

  1. Nuttinlikeanap

    Nuttinlikeanap Light Load Member

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    HI All

    How much per mile do most trucking companies pay. If a company pays you 1.50 per mile, just how much of that would be profit for a owner operator??

    thanks

    Crunchy
     
  2. coastie

    coastie Road Train Member

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    There is no simple answer to your question. Each and every Owner Operator operation cost numbers vary so therefore profit will be different.
     
  3. Gazoo

    Gazoo <strong>Resident Mental Patient</strong>

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  4. Nuttinlikeanap

    Nuttinlikeanap Light Load Member

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    Lets talk about a good businessman. A guy that knows how to keep his costs down and run a safe truck. Would he clear .60 cents a mile?

    Heres a better question. If you paid 10 drivers 1.50 a mile for the same load goin to the same place what do u think the net average profit per mile would be???:biggrin_2551:
     
  5. NightWind

    NightWind Medium Load Member

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    There's no way to determine this without some numbers. Coastie said it better than I can.
    What's your definition of a "Good Businessman"? A good businessman would KNOW these numbers and what to do with them, just MHO :yes2557:
    You have to know your fixed and variable expenses before you can even come close to any numbers and those are only going to be estimates depending on the cost of fuel. Get your numbers together then you can figure it out, it's pretty simple addition, subtraction, division and multiplication.
     
  6. Nuttinlikeanap

    Nuttinlikeanap Light Load Member

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    GRRRRR

    Ok fellas lets make it even simpler. As a new student driver I can make 35 cents a mile. As a owner operator what do u earn a mile after expenses?
     
  7. jlkklj777

    jlkklj777 20 Year Truckload Veteran

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    The short answer is you will make less money as an o/o. You will get no benefits nor discounts on your medical insurance, dental, disability, etc. You will be responsible for filing and paying all your estimated quarterly payments plus the full amount of social security tax (as an employee your employer pays half and you pay half) and medicare. No more paid holidays, vacations, sick days, personal days, or breakdown pay. Forget about taking any time off either as you will have fixed expenses each week. This is for anyone that has a weekly truck payment due thru the company they are leased to. Being an o/o is not for an inexperienced driver and if you really want to pursue this I would suggest enrolling in a business class first. Here is a list of expenses an o/o may have (depending upon their operation);

    Truck Payment; varies from a used truck purchased thru a dealer to a lease truck thru a company. May be as low as a couple hundred per month for a (depends upon the downpayment and interest rate of course) used truck to 600 or 700 per WEEK for a new truck being purchased thru a company with a "lease/purchase" program.

    Fuel costs are fluid but as of today they are running around $3.50 per gallon. Trucks will get anywhere from 5 mpg to 7.5 mpg (depends on aerodynamics, drive train configuration, driver usage, terrain, weight of load hauled, etc). Assuming a truck travels 2500 miles per week for 52 weeks out of the year equates to 130,000 miles. At 6.5 mpg this will require 20,000 gallons of fuel at 3.50 per gallon will cost $70,000.00 for a year.

    Add in the cost of plates/permits, bobtail insurance, escrow account, maintenance fund, qualcomm fees, trip pak fees, tolls, scales, truck washes, lumper costs, pm services, washer fluid, oil, antifreeze, anti gel additives, etc. and you will have several more thousand dollars in truck related expenses.

    Then if you have a family and want medical, dental, vision, disabilty, life, insurances then figure on around $750. per month for this coverage.

    If you lease on with a truckload company then you can figure on around .90 cpm plus a fuel surcharge. Now there is no law requiring a company to pass on a fuel surcharge to its lease operators and in many cases the company will hold back some of the surcharge (if not all of it) to line its pockets.

    The only way to be a true success as an o/o is to have your own truck, trailer, and operating authority. This means you will negotiate the freight rates directly with shippers and may have to wait any where from 30 to 90 days for payment (provided there are no claims). You will need to focus on a niche market that is being under-served by some other company and try to get your foot in the door thru either better service or better rates.

    Some lease operators will run as a team and burn up the highway running 6000 miles a week or more but then they have over usage fees added to the additional cost of fuel. Just as a car you lease has a 12,000 mile per year limit and additional fees for each mile traveled beyond that limit trucks have a similar guideline although I believe it is set at 120,000 miles per year before you have to pay extra for miles above the 120,000 limit. They also will have more frequent pm's and breakdowns (although if the truck is new it will be covered by a warranty).

    Either way as you can see you have alot of things to consider and evaluate. Some will try and convice you that being an o/o is the greatest thing since sliced bread. I am not in that group as you can tell. The fact is many more o/o's (and lease operators) fail than succeed. This is primarily due to a lack of education in running their own business and all the little nuances it takes to make a profit.

    For the current ads in the trucking mags they are advertising around .90 cpm plus fuel surcharge. If the surcharge is .35 cpm and the company gives 100&#37; to the operator then you can see revenue of around $1.25 per mile. Remember though there will be many unpaid miles driven each week as variance plus idle time to figure in. Both of these factors will reduce your profit even further.
     
  8. Nuttinlikeanap

    Nuttinlikeanap Light Load Member

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  9. deputy881

    deputy881 Light Load Member

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    CRUNCHYKNEES dont listen to jlkklj777!! thats nonsense bro...

    I'm a o/o making good money workin when I want too and as often as I want too.Making lots more then a co driver. I own a kenworth w900L. leased to Willis Shaw Express. I make around $1800 to $2300 a week dependiong on how hard I run. Thats after all expenses. Look theres different ways of being an o/o . Leased to a co or operating your own authority. Running your own authority is only good if you have good contracts or good brokers.If you can deal with a shipper and receiver directly with out a broker is the best way,but very hard to do. If you use a broker make darn sure he/she is a good one or you can very well go broke really quick. Make sure you get paid fast,some wanto too pay you 30 days after,they vary. Using your own authority you pay all expenses,permits,base plates,bobtail ins,physical ins,cargo ins. You may and may not get a good fuel surcharge,you usually do not get paid for deadhead. Alot involved in having your own authority,much more then I typed here.

    leasing to a co has its benefits. Most pay your base plate,permits,scale fees,tolls,lumpers,cargo ins,dead head,layover,detention time pay etc. You do not get these paid under your authority , they are out of your pocket!! Now leasing to a co you may make less then having your own authority but do your research , your own research as to the pay difference. I know plenty of drivers who run there own authority and make only .30 cents more per mile then me !!! May sound like more but is it ?? Look at all the expenses you have with your own authority!!

    Leasing to a co, you can get paid to get home in a emergency, co's usually have better freight lanes,you do not have to worry about finding your next load,your dispatcher does it for you, I get pre plans on every load.

    Being a co driver has its perks too, but you do as they say not as you wish.I run 7 to 10 days out and take anywhere from 3 to 10 off, can a co driver do that ? nope !! After all my expenses I still make on the avg of .61 to .67 a mile profit to my truck,thats after fuel,ins etc. If you run a truck like a business you can make money out here. Run your truck smart take care of it and it will take care of you. I only drive part time 2 1/2 weeks out of themonth and I still clear $4800 take home a month. I work as a part time deputy sheriff on most weekends,wouldnt beable to take off this much time and make as much as I do as a co driver....

    Just a matter of what YOU want to do,but do YOUR OWN research
     
  10. Bigray

    Bigray Road Train Member

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    hey deputy, welcome i see that was your first post.

    you mentioned you make .61-.67 p/mi. to the truck is that deducting for a driver.. or is that your take incl. driver pay.