What would you roll for?

Most people base their operating costs by the mile rather than per day. There are some costs which can be broken down by the day, such as truck payments, insurance, etc., but other costs will vary according to how many miles you drive. For instance, if you are sitting you won't be spending money on fuel unless you idle the truck. Idle the truck and you will burn about 1 gallon of fuel per hour. During a 24 hour period your operating costs for the fuel would be about $96 (24 gallons x $4/gallon). If you run 600 miles in a day, you will burn approximately 100 gallons of fuel that day, so your fuel costs would be approximately $600 ( 100 gallons x $4/gallon). There is also a cost on other items if the truck is moving, such as for tires and wear and tear.

I make a point of changing my oil at 15,000 miles. If I run 2,500 miles per week, I will need to change my oil at 6 weeks. That could be broken down by the day. But, what if I take a couple of weeks off during that time. That would push my change interval out 2 weeks and change my daily operating costs. The same would be true if I run 3,000 miles per week. At that rate, I would need to change my oil in 5 weeks, rather than 6. I find it much more predictable and accurate to calculate my operating costs by the mile.

It also makes it much easier to calculate whether I should take a load or not, since rates are usually calculated by the mile. There are some exceptions, but per mile is the norm in this business.

 

One other thing. Fuel is not your only cost to run a truck. There are many other expenses that go into your costs. Equipment payments, PM's, Maintenance, insurance, etc., are a few of the expenses that need to be considered when calculating your costs of moving your truck down the road. If you only use fuel as your cost, you are only fooling yourself.

 

I base mine off overall revenue for the week. I do it this way, so i can figure out the short-haul and long-haul stuff at the same figures.

I do have a set RPM that I will haul for, figured at 2,000 miles a week, but I try to exceed that and usually do. The rest is just extra gravy

I don't need much to cover all my expenses and bills at home, so I try to double my weekly revenue needs if I can, incase I run into a week like this one where I'm sitting at home doing nothing. Granted the load I have on more than pays 2 weeks salary I still prefer to be ready for anything.

 

SHC and G/man have said it best. I figure out my CPM so I know what is needed to take a run but also have a monthly goal that needs to be met and you could break that down to weekly, daily, yearly. This way you know exactly what you need for to make it. There are several programs out there that can help you figure out these costs and break it down for you.

A real red flag is when someone says "I only need 70 cents per mile to run". You will see most will figure their cost per mile at 1.20 to 1.30 so what does that tell you? Heres something else to figure out short runs pay more per mile than long ones. So lets say I take a 600 mile run that should be 3 to 4 (or more) bucks a mile vs a 2500 mile run which should be 2 to 3 (or more) bucks a mile.

 

If you are not certain of your operating costs, you may want to check into buying some software for your computer specifically geared toward the trucking industry. There are several on the market that will give you the information. www.truckershelper.com, www.easytrucking.com, www.trucknpro.com, are the ones that I am most familiar. I have owned easytrucking and trucknpro and tried truckershelper. Trucknpro is the easiest to use, but any of them will track expenses and give you your cost and profit per mile. It is well worth the cost. It will separate your maintenance, fuel, etc., so that you know exactly where your money is going.

 

BTW, my rate per mile to run is $1.47. That includes ALL my costs and my house bills (morgatage, electric, car payments, ect)

so far this year I'm at $2.15 for all miles and 70,200 miles in.

 

Have you tried the "Neat Reciepts" program for book keeping? I've been eyeing the system plus Trucknpro to help me achieve a better understanding of my business. Just wondering if its worth the $$

 

I do it by the day not the mile.

 

In my opinion, your cost per mile should include all costs involved with operating your business. This should include all expenses directly related to your operation, driver's wage, and expected profit (return on equity). You also need to try to figure out a way to incorporate dead head into the equation. I would advise against including personal expenses like mortgage or car payment because it will cloud the picture of how profitable your trucking business is. These expenses should come out of your drivers wages. You should be able live on your driver's wage of .50/mile and leave the rest of the money in the business. Let's say you have a good year and already have your targeted capital reserves for breakdowns and equipment replacement you could make a disbursement. Also, be aware of the tax consequences. Many independent contractors get themselves in trouble by stealing cash flow to increase their driver's wage and don't have the money to pay taxes or replace equipment.

 

You could pay yourself a drivers salary instead of a per mile rate. This would make more sense to guys like SHC and G/Man with a work smarter not harder mentality.