Steven's Alliance

My question is... how does ANYONE make money leasing at Stevens? I must be missing something because people are re-leasing. They way I figure it. If one drives 2,500 miles @ $.85 mile that is a gross pay of &2,125.00. Now I you average 6 miles per gallon that is 417 gallons of fuel or $1,672 (at $4.01 per gallon). So take the gross of $2,125 minus $1,672, and one is left with $452. Once the payment is removed ($550) you owe the company $97. There is no money for the driver nor the IRS and no money for repairs. What am I missing?

 

I made money thru there leasing program Alliance. Your numbers are incomplete. You have failed to add in the fuel surcharge and the fuel discounts. So let's take your numbers of 2,500 miles. Assume 10% deadhead miles. (you don't receive fuel surcharge for deadhead miles) I averaged less than 8% deadhead miles over my leases.
That leaves you 2,250 miles with fsc. This amount varies according to fuel costs, but right now it's about 0.43. This means you recieve another $967.00. In addition, if you follow the fuel purchase program, Stevens passes along the negotiated fuel discounts. This widely varies according to the location, but it's safe to say you will receive at least 0.07 per gallon. I have seen discounts over 0.40.
Fuel mileage is another consideration. My average mileage was 7.5 mpg. So lets figure 7 mpg, an easily attained fuel average. that means you will purchase only 357 gallons of fuel. So at $4.01, you will spend only $1,432, or $240 less. Now add in the discount for that 357 gallons and you recieve another $25. So your costs are $1,407 and you have revenue of $3,092 leaving you a gross margin of $1,685.
In addition to your lease payments there are insurance, maintenance, QC fees, etc. etc. etc. It's fair to say your will pay $925 per week for your payment, so we have to deduct an additonal $475, leaving you with about $1,210 before personal taxes, social security. If you deduct 4 weeks per year for hometime that leaves you a net of about $54, 380. (you have zero income those four weeks, but your 975 cost remains).
This matches my numbers when running. I made a bit more as a solo driver (high 50's). But these are realistic numbers.
Not everyone makes this kind of money for various reasons, but I did.

 

WoW, 54k and all that responsibility, this is a new low for industry

 

Well. you have the fuel figured wrong for a start.
They pay the full FSC to the driver, and you get their fuel discount if you use their network. Plus a lot of the driver's are getting 8-8.5 MPG, which means they are paying about $00.25 cents a gallon or less. Yes, that's a quarter a gallon.

 

Fuel surcharge is .47 right now. The way I got it figured out is the first 1500 miles is my expenses for the week, anything after that is my check, and if my expenses are lower than the 1500 miles which would be roughly $1980 (which I am including fuel) depending on where the surcharge is that particular week. Then I get a bonus that week.

The way I operate is, as long as I got miles to drive I'm driving them as soon as possible (600-650 a day if I have it and the terrain, weather, and HOS allows). If they "need" a re-power to help out, Sure give it to me. I mean how else am I going to build a reputation.

Now once I build that solid reputation I may need to consider how profitable it is to me, but until then hook and book.

 

The problem with stevens lease as i understand it is you will never own the truck all it is is a lease program not lease purchase

 

but why lease their truck and get paid a low 85 cpm when a company like mine pays you 1.00 mile plus fuel surcharge. companies like them and Trans Am and CR England that pay 85 to 88 cpm are screwing the guys out of a lot of money. Man up buy your own truck and do it the right way.

 

The purpose of the lease is more than making money for the company (which it does).
It gives a driver the opportunity to 'try out' the life as an independent business operator. Stevens is a walk away, virtually no risk lease. If the driver, at any time, for any reason decides this is not the life they want, can walk away with no penalty.
For many, this is exactly what happens.
You do have the opportunity to purchase the truck at the end of the lease for a specified amount if you put that in the lease to begin with. It operates exactly the same as a lease for a car. There is an option payment at the end where you can own the truck completely.
Stevens will finance that balance if you so choose.
In my case, the purchase price was about $10,000 less than the same truck at other truck dealers, so the pricing was decent.
Now I will grant you that drivers can do better if they just go out and buy a truck, but only if they know what they're doing. Otherwise, it's likely to be one of the largest mistakes they could make, business wise.
I liken it to the person that decides to open a restaurant because they can cook a killer chili or pot roast. Without some kind of experience in the business, they are virtually doomed to not only failure but incredible money losses.

 

but that person opening up a place to eat has to have his own money or a bank that is willing to loan him the money. there are no restaurants out there that i am aware of that offer a lease purchase to see how it fits. Heck to open a place like subway or burger king you have to have tens of thousands of dollars up front to start it.

i agree a few will succed but in reality will they make more than a good company driver running the exact same way, I have run the numbers and no, they will gross more but by the time all expenses are paid and taxes are paid and you have to figure in the 401k they dont get, the vacation pay they dont get, take a week off and see how much money still comes in. also health insurance has to be figured in, if you have to get your own you have to deduct that from the bottom line also.

 

I have been a company driver, a lease operator, an owner operator and a fleet owner (13 trucks).
I will agree that many don't make it as L/O's, no matter where they go. However, it's been my experience those same people often don't make it in the trucking business in general.
I work with people that are successful L/O's, making more money than a company person would. I work daily with drivers that have completed leases and purchased their trucks. Are now O/O's. I also work with drivers that tried the lease route, but it didn't work out for them. They now drive as company drivers.
It's a hard lot to becomming a successful O/O. Leasing can be one way for someone to get there.
Most drivers come into the industry not knowing a thing about trucking. They wouldn't know a load board from a two by four.
I personally drove for 12 years before my fool friend talked me into buying my first truck. That was 1984. I'm not sure it's anywhere near the same these days. L/Os didn't exist, trucking was still in the throws of deregulation, but opportunity was far greater (I think).
If one has a modicum of business sense, a spirit of adventure and is slightly suicidal, I would suggest they try a lease first, then go the O/O route if that's what they choose.
Or not.
Same thing for restaurants or any other business with high capital costs.
Go to work in that industry, manage for a year or better and then decide if this is the route you want to go.

By the way, I made more money (after ALL deductions) as a L/O, than I would have as a company man.
I would have purchased my truck at the end, and was ready, but life sometimes hands you a different set of cards to play with than you wish. After 40 years of driving and whatnot, I'm now on the inside.