Is anybody really making enough profit?

KCCW · Mar 1, 2008

Something else to keep in mind about factoring your freight bills....
I have never dealt with a factoring agent but what a friend who has in the
past told me was ( and it makes sense) if the factoring outfit doesn't collect
from the broker, they will charge you for the WHOLE amount. It would pay to
read the fine print.

Omega · Mar 2, 2008

TX_Proud said: ↑

I agree with the knowing the cost per mile. As an example, my costs are broken out below, assuming 10,500 total miles (including DH of 12%):

Fuel: $.63 (5.75 mpg # $3.60/gal)
Fixed: $.34 (truck/trailer payment, insurance, UCR, IRP, HVUT, etc.)
Misc.: $.05 (cell, load boards, office supplies, internet)
Mntc: $.14 (oil changes, truck/trailer tires, truck/trailer repairs....my plan includes worst case scenario; plan for the worst, hope for the best!)
Salary & taxes: $.43
Total break even is $1.60

I also want a cool $10,000 in hand at the end of the year so that after 3 years, I can trade the equipment with enough down payment to do it again. Anyone who is not figuring in a truck/trailer payment as part of their cost structure is digging a hole they may never get out of IMHO. Just because you don't have those payments, doesn't mean you shouldn't have them built in to your costs. We do not buy new equipment, but rather well-maintained later models. Warranties are good, but the truck is still not earning a dime when it's in the shop and my truck/trailer payments are a heck of a lot easier to make than someone with all new equipment.

So my bottom line r/pm is $1.69. But even in these slow times we are averaging $2.25 per loaded mile with about 10% DH. Running just shy of our miles target, but the extra money covers the shorter miles. We are averaging about $5,000 per week gross and expect to make $900 gross per day at minimum.

As for cheap freight, I avoid it at all costs. I'll deadhead out of a bad area first. Short hops are good, but remember your time is money too! Excess time loading/unloading, tarping, etc. only eats up your hours.

And never, never, NEVER haul freight more than 20% below your minimum rate! And if you have to take something less than ideal, make sure it is not long miles. Piece together some LTL if you have to. I've had LTL freight that paid better than TL freight. Less weight equals better fuel mileage equals reduced fuel costs. Air is the lightest of all!

Hang in there, the slow season is about over. For those trucks hauling the $1/mile freight, they'll be gone soon enough and then the rest of us can demand the rates we deserve. Protect your reputation and your safety rating, and be courteous to everyone even if they are not in return. Do what you say you are going to do when you say you are going to do it and things will work out for the best.

<climbing down from my stepdeck now>
Click to expand...

That's great advice.

I'm still working on finding our break even rate. Do you avoid west of the Rockies? Because that is where we encountered the 1$ per mile freight and not much else. Where and how do you consistently get $2.25 per mile ? I would love to crack that mystery. We found that the northeast pays the best. Our first two loads in the northeast were almost 3$ a mile. We considered step-deck but we went with flatbed because it seemed more in demand. Looking forward to the season picking up (I hope?).

Omega · Mar 2, 2008

KCCW said: ↑

Something else to keep in mind about factoring your freight bills....
I have never dealt with a factoring agent but what a friend who has in the
past told me was ( and it makes sense) if the factoring outfit doesn't collect
from the broker, they will charge you for the WHOLE amount. It would pay to
read the fine print.
Click to expand...

Oh yeah. I'm pretty sure we are set up so that we first ask the factoring company if they approve of the brokers credit. If they do, then from that point on the factoring company takes the "no pay" risk. So we don't haul a load that the factoring company hasn't cleared (if we choose to factor it). I'll check to be sure.

In a way I feel like factoring provides security in case some brokers don't pay.

MedicineMan · Mar 2, 2008

For what you pay a factoring company in a few months you could cover one load not being paid. It's not that common if you do your homework before you book the load.

TX_Proud · Mar 2, 2008

Omega said: ↑

That's great advice.

I'm still working on finding our break even rate. Do you avoid west of the Rockies? Because that is where we encountered the 1$ per mile freight and not much else. Where and how do you consistently get $2.25 per mile ? I would love to crack that mystery. We found that the northeast pays the best. Our first two loads in the northeast were almost 3$ a mile. We considered step-deck but we went with flatbed because it seemed more in demand. Looking forward to the season picking up (I hope?).
Click to expand...

It is very easy to figure your cost per mile. Start with how many miles you think you can easily do, then take your total costs and work backwards from there. For example, we figure 80% utilization so that means my trucks are running 24 out of 30 days each month. My costs take this into consideration.

We try to stay away from Colorado and west. But we do go there if the price is right; we go just about anywhere if the price is right. But you need to know what is coming out of there beforehand. Try to stay out of the user states (those that haul in but never have anything out). We go mostly Midwest, south and southeast. Get some customers of your own. I cannot stress this enough. You may only be a one-truck operation, but you can find a few customers to service. We also do overdimensional freight which helps to keep up the rate per mile.

AgainstAllOdds · Mar 6, 2008

Omega said: ↑

okay brace yourself for this one...he hasn't been home in 3 months!
he's had no break trying to get ahead. He's been working this whole month for instance with no break except for his DOT required down-time. We're lucky his truck is equipped like a motor home.
Click to expand...

He hasn't been home for 3 months ? And all he does is 6.000 miles a month ? I don't understand !
6.000 a month = 1500 miles a week = 300 miles a day ??
I think he should double his mileage...

7mouths2feed · Mar 6, 2008

Omega may I ask how much experience did he have before going OO?

prisonerofthehwy · Mar 7, 2008

Just curious, does he not have a business plan?

Brickman · Mar 7, 2008

Omega said: ↑

okay brace yourself for this one...he hasn't been home in 3 months!
he's had no break trying to get ahead. He's been working this whole month for instance with no break except for his DOT required down-time. We're lucky his truck is equipped like a motor home.
Click to expand...

6000 miles a month and not being home for 3 months do NOT add up!!!!!!!!!!!!!!

3000 a week is easy to do, that makes 12,000 a month if you keep on it. What is he doing with the other 50% of his time???????????????????????

As for "profit" whats that?

I've heard different places that if a O/O breaks even the first yr in business he should be lucky. If he makes a few bux the second yr that is about normal, and then to go on to make a 3% to 5% profit at the end of the yr is about as good as it gets.

With only working 50% of the time Omega ARE YOU CERTAIN he doesn't have other girl friends in other towns?

Native Dancer · Mar 8, 2008

Omega said: ↑

LOL. We didn't use his name in the company name on the truck so we just got lucky there. Does it make your taxes difficult having the subsidiary, combined corp? Is it one entity tax-legal wise?

I also think diesel fuel will level off at $3 a gallon for at least another 5 years. If not, the govt. will have to start subsidizing to prevent a crash.
Click to expand...

How and what is the government going to subsidise? The government has no money of their own, only yours and my money, past, present and future.

Log in or Sign up

Forums

Find Trucking Jobs

Is anybody really making enough profit?

KCCW Bobtail Member

Trucking Jobs in 30 seconds

Wait, employers can't reach you!

Omega Light Load Member

Omega Light Load Member

MedicineMan Road Train Member

TX_Proud Light Load Member

AgainstAllOdds Bobtail Member

7mouths2feed "Family Man"

prisonerofthehwy <strong>Ball and Chains</strong>

Brickman Trucker Forum STAFF Staff Member

Native Dancer Heavy Load Member

Trucking Jobs in 30 seconds

Wait, employers can't reach you!

Log in or Sign up

Useful Searches

Find Trucking Jobs

Is anybody really making enough profit?

KCCW Bobtail Member

Wait, employers can't reach you!

Omega Light Load Member

Omega Light Load Member

MedicineMan Road Train Member

TX_Proud Light Load Member

AgainstAllOdds Bobtail Member

7mouths2feed "Family Man"

prisonerofthehwy <strong>Ball and Chains</strong>

Brickman Trucker Forum STAFF Staff Member

Native Dancer Heavy Load Member

Wait, employers can't reach you!