Having your own authority, leasing on pros cons

So my CPA gave me a number to a guy that is a "business professional" he was at my office all day today looking over my numbers. my CPA said there is no way with four trucks and grossing $700,k I don't have a dollor to show for it. It cost me $65,k a year to stay in buisness if i never haul a load this includes office, load boards, Internet, phones, insurance, electricity. I spent $209,k in fuel payrol was $244,k. Truck mantance $110,k (tires,oil changes,repairs)

After all this for 2012 I don't have a dollor to show for it I've been keeping everyone around me jobs

 

No I'm Inc I pay myself every week than taxes are pulled out and matched by the company. We are not done with all the numbers yet when we left we are down to about $14,k like I said I'm not walking away with anything but a job.

I made more money with a single truck leased to someone than I have the last five years I keep buying more trucks/trailers thinking I'd make more money but it's not working. I really think I'd have to have 10 or more trucks to turn the numbers around

 

Awful easy for someone to armchair QB what you ought to be pulling from 3 or 4 trucks. No different than one truck there's always unforseen costly things no plan could ever anticipate. CominhomeSC said in another thread it wasn't until he had more than 10 or 15 trucks that he saw better money.

 

I guess as a new carrier the advantage I see for having my own authority is unlimited options. Unfortunately, most of them are bad options ! When you are leased on you generally have one option, maybe a few, but if you choose wisely it should be a good one.

One guy mentioned the middle man, that's one way to look at it. But whatever services a company provides you as a lease operator, chances are they are more efficient at it than you could ever be yourself. I figured out after awhile I'm a terrible bookkeeper, I think I found a good one I'm training in now. I also figured out I'm not the best load booker, tried a few options to solve that and I think I really lucked out and found someone very good to do that for me. It's looking like between getting better loads and freeing up enough time to run an extra load a week will pay for these people but basically I've put myself in the same boat as a lease operator where I'm paying a percentage to have some things done for me.

What I'm saying is that on a good lease agreement you are probably getting your money's worth out of that percentage. If you think an independent O/O just folds over that 20% extra and puts it in his pocket it's just not the case.

 

One thing to note is if you are on percentage who is it that chooses the loads? If you choose them yourself and negotiate yourself, then YOU are able to choose the best load for your situation. If you have a dispatcher that finds your load, what happens when he takes a higher paying load gross, but per mile he doesn't look at because he takes his % off the top. Have to watch absolutely everything very carefully every day no matter ehich route you go.




@kw600: carrying the fuel bill means paying that money out to get the job done then waiting to get paid. Also all othrr costs, gotta have plenty of money to keep operating while waiting for cheques to come in.

 

Thanks "gokiddogo". That's what I meant when I said "carry the fuel bills" above.

 

Some brokers will advance you money up front to do the load, usually capped at about 40% of the amount they will give you for the load. They won't give you this money until they confirm you have picked it up. They charge a fee to do this, all are different. It can be sometimes 2% of the value they are paying you, or maybe a set dollar figure. When you ask them about this though, they will know you are hard up for cash and will most likely try to get you to take the load for less money. If you are going to go that route you are far better off to use their quickpay. Some will want you to tell them if you are going to bill them for quickpay before the load is given to you. I have never used any of these services. When the broker knows you don't really NEED the load, you have more negotiating power. After some time when you've been in business, and he knows you can call other people to get loaded, he will have no choice but to offer you the higher rates.

I think you are confusing FSC with the above paragraph. FSC = fuel surcharge, usually calculated on contract accounts. The independent that negotiates every load doesn't very often add in a FSC but instead just does the load for an "all-in" rate. FSC on contracts is added in to adjust for fluctuations in the price of fuel over the term of the contract. They will usually do a load for a line haul + fuel surcharge rate. It all comes out the same in the end.