Average revenue needed to survive.

As a business owner it's not wage it's called profit. Everyone needs to know their real operating costs, their daily costs and what they want in terms of profit (or wage). Business owners need to at time sacrifice the profit margin in order to continue to run a profitable business. Far too many O/O's get caught up in the top line and before they know it they have lost everything. When if they focused on making a little less profit on some days they we still be profitable.

Sorry, touchy subject for me right now. Couple days ago talked to a really good guy that lost everything in a BK (including wife) all because he was convinced that it was costing him $1.50 to run his truck. He was convinced that "driver wage" was an actual expense for an O/O. In reality, it was costing him less than $.80/mi to run is truck and everything over was profit.

Not suggesting that we all drop our pants on rates (as a percentage carrier that would hurt me) but with the current cost and rates, trucks are more profitable today than in 2013. But people have "rate adaptation" from 2014 and are running around like Chicken Little based on the top line and forgetting what really matters is the bottom line.

Let the flaming begin.

 

No one wants to admit that running at cost when that's all that's available actually increases profitability. Too many owner operators focus on accounting and forget about economics. Profits are made on the margin. If you have fixed expenses of say 15k for a truck payment and 10k insurance annually their cpm expense goes down as you increase the number of miles. Run one load at 25 dollars a mile and wonder why you can't cover the bills. Or run consistently and look at your numbers at the end of the year and smile.

 

I have used the same piece of iron 19 years now. Buy a new trailer about every 5 years. Ancient tech you won't understand, the newbies say it can't be done like I'm doing it. This is a useless post to you but here's my take. I was 21 years old had 3 small kids and a wife fixin be in law school. I was 85g in debt counting truck and trailer. Now my wife is district judge the kids are grown youngest is a senior in high school. I figured it out so surely you can get you some is what I have to say

 

Problem is guys don't want to go out and make money. Seems like they post their dry can and expect a call to be paying them 4-5// mile light load. Cookies and milk at the shipper. They wake up looking at the load board and scream about cheap carriers etc. I have a feeling the carriers running 1.60 avg will survive more than those sitting at home waiting for "cheap" carriers to run out of business.

This is business like a pizza shop. On Monday might be slow, and you might be taking a hit for overhead cause sales are slow but weekends super bowls etc you know you're busy. Seems like a lot of people bought a truck when the demand was high and their operational cost is high that they feel they deserve more money cause they pay more money. You can still bet 4-5k a week if you want to go and get it. I have one dry can owner leased. His avg is 1.50 but paid off trailer and truck, he still brings in $3,200 avg a week after expenses and spends weekends at home. No flaming . That's the truth as you posted.

 

Cookies and milk at the shipper. I could get behind a new law requiring that. Pizza and wings on delivery.

 

How come your insurance is so low? What insurance company do you have?

 

Thank, thank, thank you.

It's like the math gene is removed from someone when they become an O/O. Ignore fixed costs, add all your personal expenses into your operating costs and rolling MT because "I ain't going to pay to haul that crap" when in reality it is a low profit load.

And my calculator says that $1 in revenue is $1 more in revenue than $0.

 

When was 7.5k so low? I have a driver that pays 5300 a year with progressive. 18 year exp driving and clean record for the most part.

 

Insurance is a difficult thing to compare. So many variables that come into play. For example, while a progressive policy may have all the same levels of coverage as a GW policy for less, you really are looking at different coverages just based on quality of company.

But in general I have to agree, I am hearing less and less hearing new O/O's getting quotes under $10k.

 

It is low for a 1.5 old authority