What are you guys calling "gross"?

Discussion in 'Ask An Owner Operator' started by Freightlinerbob, Jun 6, 2012.

  1. Freightlinerbob

    Freightlinerbob Road Train Member

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    People use words in different ways when comparing numbers. So, after reading a different thread,about earning potential, I have to ask.

    Gross:
    Is that what the truck earned after the company took their percentage or is it the total of freight charges?

    Net:

    Is this what the company pays you after deducting, fuel license, insurance, etc? Or what you pay taxes on after you've paid every last bill pertaining to the truck?
     
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  3. BigBadBill

    BigBadBill Bullishly Optimistic

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    You are right, people use numbers in different ways so it is always best ask. And on the forums when people are talking rates it can also be helpful to make sure what type of trailer they are talking about.

    In general, if someone is talking about a percentage lease and says "gross" that would be what the company is charging the customer. From that you get "gross to the truck". Now to make it confusing, people will say gross and net in the same sentence and they are likely talking "gross to the truck" when they are using net.

    And in terms of a comparison you should stop at to the truck and then take your expenses out of that. Because what it costs to run my truck is going to be different. Plus if you are comparing leases then you will want to know what you are getting and take each companies expenses out to see how they compare.

    We pay 87% but charge more back. So to compare to another company that pays 76% but pays plates you need to know the gross to the truck to make a good comparison.
     
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  4. SHC

    SHC Spoiled Rotten Brat O/O

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    I use gross as the money TO THE TRUCK before any of my costs.

    Net refers to what I got to pocket after I subtract fuel, truck payment, Maint, and all the other costs of running the truck.
     
  5. rollin coal

    rollin coal Road Train Member

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    When I refer to gross I always refer to the gross I get to the truck also.. Whatever percentage above that going to the company I am leased to is irrelevant to me. When I refer to net I am refering to what money was left after the fuel was paid for... ...obviously there are many other costs other than fuel that will come out of that money but as Bill said those costs are different for everyone... ....that said a net figure after fuel will let anyone who looks at that number figure out what it would mean to their operation if they had "netted" that amount after fuel. If I ever refer to a rate that my truck made that is the rate it made on every mile driven, the loaded miles + deadhead, unless otherwise stated.
     
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  6. Freightlinerbob

    Freightlinerbob Road Train Member

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    OK, we're on the same page more or less.

    The accounting term "Gross Profit" would be, in trucking terms, like saying "Revenue after Fuel" but before overhead like depreciation, maintenance, cell phones, OSHA/WCB, etc, because like was pointed out, those are different for everybody.

    A salesman could sell, oh I don't know, say a Turbo 3000 Vada for $300.00 but have paid Andy $50.00 for it and his "Gross Profit" would be $250.00. For example. ( Don't worry about the $250 profit driver, you'll save that and more after the "clean out period")

    "Net Profit" would be what you paid taxes on.

    Day to day, I keep an eye on my Gross Profit (per mile) more than anything else.
     
  7. carl larsen

    carl larsen Light Load Member

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    the turbo 3000 is junk. it does nothing. studies have been done by many organizations. even the mythbusters did a segment on it. i foolishly had one installed and my fuel economy went DOWN. fuel economy depends on so much, wind, weight, speed, grade, percentage of biojuice in the fuel etc. that to give credit to a scam like the turbo 3000 is...well foolish.
     
  8. BigBadBill

    BigBadBill Bullishly Optimistic

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    May as well put this in a Wiki file as a perfect example of how a thread will get thrown of the rails.
     
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  9. ramkatral

    ramkatral Heavy Load Member

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    Yea, some people can't understand that it's just an example.
     
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  10. Freightlinerbob

    Freightlinerbob Road Train Member

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    Sheesh! I was just trying a little bit of humor and look at what happens. I guess I had it coming....

    So there are 3 basic terms at play here.

    1) Gross Revenue:

    what the truck earned, either after the company took their % or the truck got paid by the mile/ flat rate or what the Broker paid you.

    2) Gross Profit:

    what the truck made after the fuel bill was paid.

    3) Net Profit:

    what you paid taxes on.

    1 & 2 are really the only numbers that can be used to compare one gig to another. This can be a little difficult as well because some milage companies will pay for tolls, insurance, even HVUT among other things.

    There are way too many variables between 2&3 to accurately compare because everybody runs their operation differently.
     
    Last edited: Jun 7, 2012
  11. kw600

    kw600 Road Train Member

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    Same here. Net is what I have after all expenses. Gross is all the money truck receives. From gross you take out fuel payments, maintenance, ifta, yafi yadi yada expenses.
    Once in a while you hear someone say "I made 200,000$ last year" generally speaking I believe this is gross, from that 200,000$ how much did they keep, not all of it was profit
     
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