Profit margin

25% driver, 50% insurance, equipment, fuel and everything else, 25% profit.

 

I've just figured costs at $1 per mile. My maintenance fund is bulging at the seams, but I know it could get wiped out quick.

 

tell them it cost the shipper $1.58 - $2.01 to move a truck without a driver or the price of fuel. Then ask them to tell you what the price of a driver and fuel would be per mile. Then tell them to add 20% to that number for the trucking companies profit. Then they can add their 20% on top of that if they can get the shipper to bite. That is how it should be working.

Here is how that works:

$2.01 baseline rate
.50 per mile driver
.50 per mile fuel
$3.01 subtotal
.61 trucking company proit
$3.61 per mile to trucking company
$4.33 per mile to broker (20% markup not cut)

Everybody would be happy except the shipper.

 

No one cares if it costs a meat plant $2 to make a burger when McDonald's can profit selling one for $0.99

Specialization/division of labor is what makes developed countries so much more productive given the same initial resources...

 

I want to make at least the same, if not more return on my investment than if I simple put the money into a mutual fund. What I mean is, my investments have averaged about 10.3% over the last 5 years, so unless I can make at least 12% above all the costs of doing business (including a realistic salary for myself as a driver and as a manager) I am not going to do it and would just put my capital into the stock market.

The sad part is, most large carriers are happy if not completely ecstatic with a 1 or 2% profit margin, just look at their SEC filings every year. That is the beauty of having publicly traded companies, we get to see all their numbers but they don't get to see ours. It gives us a benchmark to go by when making a business plan.

Bottom line, each trucking business is slightly different, most van guys think I am full of crap when I say my cost per mile to operate is $2.xx per mile and my revenue is $3.xx per mile, all miles (hub not dispatched), but I own my truck and trailer, it is specialized equipment (car haul) and I only run 4-5 days a week and less than 80,000 miles a year. My operating cost includes my salary as driver and manager which is $80,000 per year plus my business fully funds my family medical, vacation, IRA, etc. The best way to compare is profit margin, which mine currently is 18% so this year has been a good year compare to last year, and the last 5 years, even with some major changes to my customer base and industry in general.

 

Bout what I run for numbers, however I don't have a medical plan.
Last year as I recall I was at 28% net. That wasn't impressive to me. I'm shooting for 35% this year. Haven't actually broke it down since the beginning of the year to see where I'm at.

 

* to be clear, my profit is a higher % only bc my official salary is lower than @brian991219 listed his. Rest of the numbers are fairly equivalent.