Some numbers for new O/O

Completely agree with the above advice. I won’t run truck and trailer into the ground before upgrading so saving that amount or more per month will ensure newer equipment can be consistently purchased every few years. Keeping the current equipment in pristine condition for trade in is also a must for me.

 

Don’t feel like you have to be loyal to one broker. Get going ASAP. Get DAT and start hauling freight.

 

Thanks for info im 10 months with my authority and was looking for trailer repair cost

 

that is what's up!!

this is what I'm trying to do myself...just turned 50 and want a career change. I have a cushy job now , but only pays about $72K... I want to do exactly what you are doing....right now it is a year and a half wait on a new truck due to the shortages, so I will just do the company driver thing get my experience and learn as much as I can in the mean time. I have about $70K saved up with 800+ credit and spotless driving record....hoping that is enough to get me going in the owner operator industry and be successful at it.

Thanks for the inspiring post!!

what area are you in if you don't mind? I am in SoCal

 

Emissions trucks are definitely more precise to run….so many moving parts! Keep it clean- don’t idle- use a catalyst. I went so far as to get OTR to ensure I could get myself out of a jam if the computer is having a bad day! It’s definitely has had those and I avoided costly tows and expensive shops taking a guesss at it. My dad told me 30 years ago- Trucking ain’t for Sissies! Thanks Dad

 

You are welcome.in Dec and Jan, I grossed 80,100 bucks. In Dec, I ran my ### off for a total of 12,800 miles at an average of 3.25 per gallon for 41,600. In January, I made 39,100 bucks for a two month total of 80,100 gross pay those 2 months.

How did I do it? I stayed out 2 months straight, but took a 5 day mini vacation on New Years. I did completely OTR and would start in California with rates around 3.70 cents on average and take a long haul to the North East, then I would make my way back west in increments, usually 3 lanes to get back to the West coast which I would get right around 3.00 per mile going east to west, then rinse and repeat.

I operate a bit different with my giddy up. I know the following. For every 1 dollar I make, I am going to keep 45 cents (43 to 47 cents) in my pocket even after taxes. For example, I save 25000 per year for when it's time for a new truck and I pay my wife that money as part of our business so it's pretty much tax deductible, but when calculating my costs..
1. Maintenance and Tires and Warranty
2. Insurance
3. Fuel
4. Tags/Fees/Passes/etc.
5. 25k per year for the next truck.
6. State and Local Income Taxes that will be due
When I add up all of those 6 things above, it always totals anywhere from 43% to 47% of my total income. So for me, when all is said and done, all taxes paid, everything to operate the truck, I know that I have in my pocket (after taxes) 45 cents for every 1 dollar I make driving is mine to keep. This is a bit different than how many do it, but I like to calculate cost to run the truck with EVERYTHING involved that will NOT go in my pocket. For me, 45 cents out of every dollar made or 45% of my gross is what ends up in my pocket.

Another way to look at it, for every dollar I gross, I pay 55 cents of that dollar to cover my fuel, maintenance, tags/fees/Passes, 25k per year for the next new truck, and my state and federal income taxes. 55 cents out of every dollar covers all of that.

So, for 2022, I will drive around 110k. If I average a rate of 3.00 per mile, that's 330k gross. I know that the money I will keep of that 330 K is 45% or 148,500, that's take home, in my pocket and after taxes, 148,500.

If the rates are 2 dollars per mile (they won't be that low) but if 2.00 per mile and I run 110 k miles. That's 220 K gross. So for me, I will take home 45% of that which is 99,000 dollars in my pocket.

How do I know its 45% when gas rates very and maintenance varies? Well, like I wrote, I take home 43 to 47 percent and gas fluctuation always falls into this percentage because when gas is up, that's more tax deductible so taxes come down some, so the fluctuation never skews my final annual take home pay by more than 4% variance of that total takehome pay. As for maintenance, what about it varying? I purchase the all inclusive warranty/maintenance plan, so my maintenance fees per year are pretty darn consistent. I pay a lot, but have piece of mind knowing I'm not going to pay much More in the event of bad luck. So for me, now here's the kicker, my truck is paid which is huge, but for me, I know within about a 4 percent variance, that for every dollar I make, 43 to 47 cents (about 45 cents) is my absolute take home, true net pay after taxes a everything paid.

The mistake some truckers make is NOT considering ALL costs. If you are an O/O, you know the truck isn't lasting forever and when it's time, you will need another truck, so literally putting back 25K per year for the next year is something I treat as a cost. It's an absolute must just like fuel or maintenance. It's not optional. I save taxes on that 25K by paying my wife as part of my business. The other critical thing is considering your state and federal income taxes as a cost each and every month. Thr last one is critical but hard to do. If you can buy a brand new truck, you are going to have the opportunity to purchase near 100 percent warranties and annual maintenance plans which will save you thousands upon thousands in maintenance until you trade the truck in at the 500k mark when the warranty goes out, and you have the 100 or 125 K you have set back over 4 to 5 years to get a new truck.

 

Very much. The rates are pretty different now but avg'd out not much difference pre covid. About the same profit margin now still

 

Loads Boards and Brokers one in the same in a way. I recommend the following. Go to YouTube and find a channel of a dude named MakeCents Trucking. He has multiple videos on exactly how to understand, learn, and operate with the Load Boards. If you are an owner operator with your own authority, don't mess around with anyone else in the chain. The gigantic risk is one you have already taken. 90% of your risk has already been taken, so continue to stay confident in the last 10% of the process. Meaning,.........RUN the LOADBOARDS, period. You can take 2 days, or 16 hours of watching the You Tube Channel of MakeCents Trucking and you will be fully competent and ready to go. There are several videos out there, but the most thorough is MakeCents Trucking.
IF your truck is paid in full and you are an owner operator and you run the load boards performing at "C" average on a scale of A to F, there is NO WAY you can lose money in trucking. There is no way that you can not MAKE money. I don't care what the gas prices are and what the rates are, if the diesel goes to 4 per gallon and the rates go to 2 dollars per mile on average, you should still make money. Here's a breakdown of the WORSE SCENARIO other than totaling your truck. Obviously, totaling your truck is a disaster, but just short of totaling your truck, check this out, and these are worst case scenarios.

You drive 120K Loaded Miles for the Year
You average only 2 dollars per mile (the rates will never be that low again, but lets say it's the case)
Your Gross Pay is 240 thousand
Costs---------

Terrible Maintenance Issues- 30,000 per year! Something is wrong if you are paying 30K per year
Tags/Fees/Registration/Easy Passes/DOT Stuff- 7.5K
Fuel- estimate is a 4 dollars a gallon and your truck gets 6 miles per gallon- Again, if you have a truck in 2022 that only gets 6 mpg, you are doing something way wrong. It's like having a flip phone in 2022. Every trucker on the road should be getting 8mpg or more, and a truck in the last 18 months should get 9 mpg, but lets say you get 6mpg and drive 120 K miles, that's roughly 80,000 dollars per year in fuel costs.
Insurance- 27 K. Something is way wrong if you are paying that, but again, worst case scenario stuff.
TOTAL COSTS ADDED UP= 144,500
TOTAL GROSS= 240,000

Based on the above, since your truck is paid, considering HORRIFIC scenarios, you have still made 95,500 dollars. Lets say you are smart and put back 25,000 per year for the next new truck in 4-5 years and/or a maintenance savings in case of catastrophe, so 25K from that 95.5K is 70K that you made, and coming out in good shape for the next year. Now, keep this in mind, the estimation was 120 K driving miles. As an O/O, you aren't waiting on dispatch or setting in the unloading areas for hours on end and only getting 2,200 driving miles per week. 3,000 miles per week as an O/O should not be difficult to attain. If you drive as an O/O 3,000 miles per week and work 40 weeks per year, that's 120,000 miles driven which means......that's 3 months off or just under 3 months off at 12 weeks per year. So, in a scenario when fuel was 4 per gallon and rates were only 2 dollars per mile, if you work 44 weeks instead of 40 weeks, and after setting back the 25,000 for a new truck/savings/catastrophe account, you make about 85,000, still with 2 months off in the year.

The above is not that difficult and it's a really, really, really bad case scenario. There are little things you can do such as fuel cards. Every truck driver in the United States should be paying 30 cents LESS than what the sticker price of the diesel shows, so for diesel to actually cost you 4 dollars per gallon for the whole year, the sticker price should say 4.30 cents at the pump.

Take Away Points- If you have a truck that is paid for and you average no more than 30,000 dollars in maintenance for the year for that truck, there is just no way to not make money unless you just choose to not drive. I know this may sound opposite of what you hear, but it's actually HARD....it's very DIFFICULT to NOT make a lot of money as an owner operator with own authority if you have a truck that is paid for, EVEN in a scenario of 4 dollar gas prices with 2.00 dollars per mile which is a HORRIFIC ratio and very unlikely to happen, but even if it does, you can still come out not just ahead, but way ahead.

 

The above was the worst case scenario, again, disclaimer, totalling your truck. If that happens, it can do major damage to our business, but lets take what is the most likely scenario Most likely scenario, Rates will average about 2.65 in 2022 for Dry Van and calculate the obvious increase for Flat and Reefer, and the fuel prices will likely average about 3.90 cents. Diesel will go up to 4.20 on average for the year, but you should be paying 3.90. So, with the worst case scenario given in the previous post, factor in what is likely. Rates at 2.65 and Diesel at 3.90, and hopefully, your insurance is well below 27 grand and your maintence is more like 15-20 grand, and you can see, the previous 70 to 85 K made from the worst case scenario above factored in with what is likely for 2022 is more probable that you are making 130 to 145 K. A mistake some O/O's make. During the good years, such as 2021, and it was a GOOD year. The rates were alarmingly high. During the good years, if you do bring home 170 to 200 K, set back 40 or so K of that for the next year which could be the down year. Get your life accustomed to living on making 75 thousand per year and if you do it this way, it's very difficult to fail. Is it ALWAYS possible to fail as an O/O? Yes, of course it is. There are things you can do compared to other truckers that dramatically LOWERS those odds of failure though, and the most important thing you can do to NOT fail are the things that you do during the GOOD years, not the Bad one. It's the good years that truckers have that break them, because this is the cushion aloud to be successful during that one year of devestation.

 

Depends on if you are sole proprietor or llc and if you file as an s-corp (which you should saves money)