I need help understanding!!!!

With all due respect, I do not believe that your operational costs are as low as you've stated. What you claim as your total operational costs amounts to what your fuel is costing you. You've added nothing for maintenance, tires, breakdowns, vacation and hometime.

 

I average 9.3 mpg for the year. At that mpg the FSC has covered all of my fuel costs.
Right now my fuel costs are about $.45 p/m.
I put $.10 p/m into a maintenance fund, works out to be about $10K per year. That has been enough to cover maintenance, tires and breakdowns (including one engine overhaul) over the last 8 years.
The remaining $.10 covers insurance and additional taxes like the 2290 or the Oregon VMT. (The Oregon Vehicle mile tax is the largest piece of that.)

Items like vacation and hometime are not operational costs.

 

What about driver pay? Thats a big one unless you don't think your time and effort aren't worth being valued. LOL Heck driver pay alone adds roughly $0.50 a mile to my expenses.

 

Beethoven, I have to agree with Frenzy. What's going on, man? $1.50 p/m operational cost?! Are you just guessing at that figure or are you actually keeping diligent records? If your opcosts are over $1.00 p/m (and that is high, IMO), then either you are pulling something specialized and out of the ordinary, your truck has some MAJOR issues, or (don't take this the wrong way because I absolutely don't mean to belittle you in any way) you need to educate yourself with being a better businessman. You may know how to drive circles around everyone out there, but to be a truly successful O/O you need to either learn the business end, or employ someone who knows it and listen to their advice. If you are running balls-to-the-wall down the highway instead of trying to conserve the fuel you have paid for, then you need to sit back and ask yourself which is more important; trying to keep up with all the "super truckers" blasting down the highway or taking home more of the money you have earned? I run 59 mph and my average over the last 4 months has been 7.82 mpg. My goal is to get my average over 8 mpg consistently. I idle very little because I have the NITE system on my truck and a bunk heater, and I keep the gap between my trailer and cab at shoulder width. Future improvements I plan to make are changing my muffler to a performance model, getting an aftermarket CAC, and possibly switching all my wheel bearings to the MicroBlue 3-Axle set of bearings.

If you were to get your opcosts down you wouldn't have to stress as much about all the companies that are paying $1.05-$1.15 p/m. I am leased to a company in the east that pays .90 cpm loaded and empty + FSC. We also have electronic logs and like I said, I run 59 mph and do very well. I am not going to go into specifics because that will just start a frenzy from the naysayers that I'm not willing to get into. Everyone has their own ways of doing things out there, but I have tried to follow the advice of successful O/O's instead of the truck stop and break room cowboys.

The second thing you really should reconsider, if you want to get your opcosts down, is not getting that Freightliner Classic. Although they are nice looking trucks, you might as well forget all about fuel mileage. They are terrible on fuel mileage. Why not try to get a more aerodynamic truck like a Century or Columbia? Are they uglier than a Classic? Yes, some might say, but personally, I am out here to earn a good living and if keeping my speed down and driving a more aerodynamic (ugly) truck keeps my net pay higher, then so be it. A truck is only a tool to give you and your family the life you desire and deserve. Even if you don't have a family, you should still be concerned with being debt free and setting yourself up for retirement so you don't have to rely on the government to support you later in life when you should be winding down and relaxing.

You might also consider checking out Kevin Rutherford's radio show on satellite radio and his website http://www.letstruck.com. He has a ton of good information about getting your costs down and your net pay up. If you are going to be at the truck show in Dallas, Kevin Rutherford will be giving his free Partners in Business seminar, which includes a free Partners in Business manual ($20.00 value). Kevin is also very open to helping drivers spec a truck for fuel mileage if you call him up.

Anyway, Beethoven, I didn't mean to preach at you, I was just really blown away when you said your opcosts were on average a $1.50 p/m. I know I have no where near all the answers and have a long way to go before I can say that I am truly happy with my business practices, but I will continue to surround myself with successful O/O's and other business owners and keep asking questions. I wish you the best in your future endeavors.

Be safe!

 

It' true what you are saying. What I'm seeing over here, what the big guys are doing is they use the banks money. They get finance on a new truck, and run it for say 3 years without spending real money on maintenance, the maintenance and depresiation costs goes right into pocket. When truck is close to the end of its life it gets traded in and the cycle get started all over again.

 

Frenzy this doesn`t seem to leave much to pay yourself as the driver.

 

Actually, rjones56, by the way I read Frenzy's post, he nets .75 cpm, which should more than pay his wages. With my home budget I have to pay myself .29 cpm based on 2400 miles p/w, which covers every single bill I have including clothing and entertainment. In 5 months, I will be able to drop that to .23 cpm because I will pay my pickup off early. At which point, I will put the extra money into my truck replacement fund.

 

Beethoven,
Remember too, even $0.60 p/m is a lot more than $0.00 p/m, at least in the short term. When someone with high-overhead is faced with dead-heading home vs. carrying freight that will cover some of his costs, it would be very difficult for that person to ignore the short-term cost reduction possibility even low priced freight affords in that situation.

Before I get flamed to a crisp: I am not advocating it. Indeed, I said short-term cost reduction because we all know that every load moved below cost encourages lower rates across the boards. Just as we wait for brokers to raise rates while we wait, so do brokers hope to find a dead-header or someone who needs to get back in a hurry to snatch up their load, or some desparate guy who can't figure his costs as others have already pointed out.

That is part of the business. It is complicated because everyone is trying to make money and the number of minds involved with finding a better or easier way (not necessarily a right way) to make that money is in the millions in this industry. Getting a feel for the factors leading to initial rates on posted freight, will help.

 

Hey Beethoven, one more thing I will mention about the Classic and then I will shut up about it; just something to keep in mind - even if it is a great deal.

Now keep in mind that I am only using figures that I have heard on Kevin Rutherford's radio show and stories I've heard from other drivers that have drove them. I am not saying that you can't do better with the fuel mileage, but...with my Century I am getting 7.82 mpg, it seems like a lot of the fuel mileages with the Classics usually run around the low to mid 5's. Let's just say that you get an even 6 mpg on 2500 miles p/w with fuel at $3.80 a gallon. The difference between my 7.82 mpg and your 6 mpg would end up costing you $369 more per week, or $17,712 per year. You keep the truck for 2 years and you pay over $35,000 more for fuel than me. Can you imagine what you could accomplish with that kind of money? I don't know about you, but for me that is a life changing amount of money, especially if you keep that kind of fuel savings up over the rest of your career.

Now, once you consider that kind of savings over two years, you have to ask yourself if that Classic is really that good of a deal after all.

Again, I'm not trying to get into your business or seem all high and mighty. I just wanted to point something out to you that maybe you haven't thought of or been exposed to in the past. I guess you could say that I'm just trying to help a brother trucker out.

I really do wish you the best in whatever you decide.