No experience but getting Authority

You have your own auth. I need a # to put on my tk

 

There are alot of companys out there advertising 45-55. Heartland got it all over there trucks. STARTING at .50 IF they can do it why cant he. He never said anything about getting rich. As long as the truck pays for itself. Even if it is only $100 or so weekly in the bank. Thats a profit. He never said he was going to give up everything he had just to go into the trucking industry and retire.

 

Wow, lots of great info here. Definitely making me rewrite my business plan. Thanks to Redforeman and everyone else that has posted here over the last couple of months. Glad to hear someone can start out as an O/O. But I obviously need to do considerably more research before I take the plunge.

 

Check out these other great threads:


http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/146942-how-to-become-an-owner-operator.html

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/147854-what-would-experienced-o-o-buy.html

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/125507-what-estimated-operating-costs-o-o.html

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/148340-keeping-track-o-o-operating-costs.html

 

So let me get this straight. Your asking why a guy with zero industry experience and zero broker or direct shipper contacts can't pay the same as a 1000+ truck fleet. Here are some reasons, besides the two major ones above.
1. Fuel costs. Megacarrier is getting fuel FAR cheaper than rookie truck owner
2. Truck utilization. Megafleet has many DIRECT shippers and drop and hook situations to optimize revenue. The above carrier, Heartland, is primarily a regional carrier; shorter runs equal higher rates
3. Discount insurance. Once over a given threshold (my former insurance carrier told me 10+ trucks) you start paying insurance by the mile, which can be far cheaper for lower mileage regional fleets.
4. Brokerage. Supermegacarrier brokers out their less profitable and overflow freight, returning pure profit to the bottom line.
5. Credit. Supermegafleet isn't factoring at 1% per 10 days, or in other words 36% interest. They aren't losing 20% of the loads revenue to a broker. Their equipment is financed with very favorable terms and under warranty.
6. They have their own shops for repairs. $12hr "mechanics" are far better than $95hr TA/Petro "mechanics"

Your welcome to dispute any of these reasons as to why they are capable of paying more. The OP also said he'd include benefits. Trucking workers comp in FL was roughly 18% of gross pay when I got quotes. Medical was $400+ for ok coverage for the driver, family was $1,000+. All of these prices go down due to the economy of scale when dealing with 1,000 drivers vs 1 or even 10.

This is a business. It is complicated. RedForeman has done the best job at hijacking a thread, as well as building a competent business plan and sticking to it, having the proper capital and credit, and being a startup trucking company that I have seen. It is refreshing.

 

Well.. thanks glock. We'll see how long that holds out LOL. I haven't been posting much in the form of updates lately so here goes..

I just got through working out the hard parts of getting quickbooks to report on my business. Some of the transactions you do out of your wallet or by swiping a fuel card that seem to make sense really get gnarly when reproducing them in a real accounting program. QB is real easy for someone running a retail store or consulting business, but not so clear cut for a motor carrier.

The good news is also the bad news. I wasn't far off with my estimates that were concocted via a set of spreadsheets. Depending on what exact closing date I enter, net profit is either zero or slightly below, exactly as predicted. So now when I claim that my son is the only one making money, I can prove it LOL. Especially when he complains about a short pay week. To date I am into this business for about $50k in cash and financing. About $10k was an overrun for truck repairs and tires. So it's not all bad news, just more up front with new (to us) equipment than I had planned for.

Next step will be populating the budget feature of QB so that I can run even more reports to keep track of maintenance and tire funds, payroll liabilities, and others. It's amazing. You think you have it under control, but with your cash spread out across several accounts and expenses going everywhere, it sure is nice to click and answer a question without hunting down a spreadsheet and build yet another custom page to solve the latest guess.

On the completely good news front, I'm keeping rates where they need to be despite the best efforts of evil, cheap brokers. I ran weighted average rate per mile for year to date and got $2.24 on loaded miles and $1.91 on all miles. In other words, decent salesmanship on my part softened the blow on the expense overruns. Now that I feel we're out of the weeds on unscheduled repairs, things ought to improve. In fact they already are. Not having spare tires mounted up twice a week has been a nice relief for the past month.

True to what others have said, rates have softened a bit the last few weeks. Nothing that makes me want to park the truck, but I'm definitely having to work harder for a good rate. I think one broker got mad when I asked him if that rate included the reefer actually running or would that pay extra. F him if he can't take a joke as funny as his rate. Seriously, it was a new record low for me: $1.27/mi ATL to HOU. If they threw in a free fill up I'd still have to think on it.

I posted somewhere else that I had gotten 7.25 mpg based on ifta numbers. That was wrong. That number was based on my wife's ifta numbers. As I was crawling through my QB misery, I found several fuel tickets she had missed. That's another mishap that won't happen again with the use of QB. Reconciling the fuel card has a way of bringing up those stray fuel tickets. Anyway, the actual numbers I turned in were at 5.97mpg - still fair considering all the idling. I'll be getting an APU on that truck in the next month or two. As a plus, I've coded my fuel gallons into the QB transactions, enabling me to run a quarterly report and have gallons broken out by state in under 2 minutes. $58.75 was the tab for Q2 ifta. We bought a lot of fuel in GA and TX then went and burned it in more expensive places.

Speaking of ifta, one little detail I saw on the news and never connected in my pea brain was a mid-quarter fuel tax change for Georgia. I guess the governor thought if he gave us a break for a month, people could still drive to work and avoid foreclosures. Result: fuel in GA was taxed at a lower rate in April than in May and June. If you passed thru Georgia much, you might want to review your return and make sure you got that rate right on two lines. Like the government, I'm here to help LOL.

Other than that, quarterly taxes were a breeze, entering them into QB was not a breeze. Well, this time anyway. Now that I've also solved the mystery of how QB moves dollars around for payroll expenses, that'll go easier next time too.

Jerry Springer final thought: If I had to do it again, i probably wouldn't have put off getting QB set up properly as long as I did. I can't remember what I had for supper last night, never mind whether my son paid cash or might have used the fuel card on a spare tire mount in April. On the other hand, it was nice to have been through a quarter of a year and work out all the devilish details in one sitting, versus over and over every week or two.

 

Hey Red, is your son doing some sort of trip sheet or envelope that details out his expenses for the trip? I made one up based on previous companies I worked for for my drivers. Receipts were required for reimbursement. That makes it very easy for updating quickbooks, and will keep your from procrastinating on the data entry. If you're not doing that, it can be very easy to let expenses disappear increasing your tax burden. I had a TCH account and then a Fleet One/Truckers Edge account(both gave detailed printouts) , and that was the ONLY way to buy fuel short of running out, and then the driver had some 'splainin to do.
Breaking even in your first six months are what most business' dream of. Rates are cyclical, especially in the reefer business. They generally follow the hauling demands of fresh produce. I don't know if you look at or even know about this report http://www.ams.usda.gov/mnreports/wa_fv190.txt but it can be worth it's weight in gold when trip planning. It used to be a fairly guarded secret and un-googleable, but times have changed.

Oh yeah, stop buying fuel in GA!!! When I first got started, I was using the smart fuel feature from Internet Truckstop to find the best pre-tax pricing. I generally know where to fuel now (cost plus pricing helps a lot too), but I didn't when I first started. There are a number of optimized fuel programs out there now, so a little research to find what works for you is in order. You can easily spend more in one poorly chosen fill up than those programs cost for the month. If you are already doing this, great. If not you could be throwing hundreds of dollars a month away. Sure, your driver might not like you telling him where to fuel, but it's a business, not a hobby.
Scenario: Fuel in GA 2.00 gallon Fuel in FL 2.10 a gallon. Most folks that don't know any better (company drivers) buy that GA fuel because it is cheaper at the pump. In reality, you and I know that the FL fuel is cheaper by almost .04 a gallon overall in this scenario.

 

You all should be recording your fuel purchases on a form. At the end of the quarter just add up the amounts for each state. It also keeps track of my fuel mileage also as a reference.

I make my own daily log sheet and it has starting and ending mileage for the day plus the total mileage for the day.

I also enter my trip from pickup to destination into Microsoft Streets and Maps then save it. Then I continue on with my next load and so on and so on. At the end of the quarter I have a complete record of my trips for the whole quarter.

If you look at the directions in Streets and Maps it will say "Entering Alabama" and so on with the mileage next to it. I export those directions into a text file then import them into a spreadsheet. I then create a formula that subtracts the mileage from "Entering" from the previous "Entering". That gives me the total mileage for that state.

Then I click the data option then sort and end up with a printout like this.

 

You need to make sure that you are recording actual odometer readings as you cross state lines rather than just putting down the miles. If you are audited, it is a very big fine if you only have the miles.

 

Microsoft Streets and Maps does that very accurately