Average revenue needed to survive.

I have to agree with Bill on this. I often do agree with what he says.

I've always looked for an avg per mile revenue for ALL miles in any given time frame, the longer the time frame the better....the miles come right off the odometer. When you start looking at it that way, the difference in deadheading out at 0.00 vs coming out of a bad area with a "less" profitable load is obvious. It will also make you think more about unpaid miles. A lot of people will deadhead 200 miles to pick up a higher dollar load when they could have taken the "good" paying load down the street and came out with the same profit per mile. There is and always has been a lot of ego involved in getting the high revenue per mile. If you can show a high avg revenue per mile for a year, and enough miles to generate a good profit...then you got it down.

Fuel costs are down by what? 25, 30 cpm? Competition is going to force that money out of the rates.

Always, alway compare fuel prices without the ifta.

I don't agree that driver pay, replacement costs, even health insurance are part of your truck costs. Fuel, maintenance, insurance, tags, etc plus ammortized equipment costs is what it costs to operate the truck, what you get over that is your profit to be used on the affore mentioned expenses as you see fit. Adding all of those things together is fine to determine the per mile rate you would like to achieve, but when you are in a dead freight area, you better know what it actually costs to operate your TRUCK. You can take a little less on the profit, it won't kill ya and you can make it up on the avg with good rates later.

 

Seconded. My cost per mile leased to Mercer is a LOT less than 80 cents.

 

I think that the way an owner operator pays themselves plays a part in what they consider cheap freight. If you pay yourself a percentage of revenue your threshold is higher on a per load basis than if you pay yourself a fixed salary where each load's contribution margin to your salary expense isn't of as much importance as total revenue over a longer period than just that one load.

 

Pay for an owner operator is simply profit. I don't care how you slice it, pay yourself percentage, cpm or what have you at the end of the day whatever is left after expenses is profit.

 

The whole "operating cost" side is a huge issue for me right now. Far too many don't even have an estimated maintenance expense let alone a thought out, understand it so they can explain and defend it (even if you don't agree, better that they understand what they are doing).
Am over inflated cost of operation for someone that is booking their own freight and/or running on percentage can be a profit killer. Some of the most profitable people I know run into awful markets. But they know their numbers.

One call earlier this week I had an owner rattle off his numbers like you had asked him his SSN and birthdate. He even explained what the base line was (how many weeks a year he ran, what the miles per week number was, etc.). He had them down to the point that he told me what he needed to average for the week to pay his personal expenses and what the rate was to go into any market and come out with a load and make his number.

What was interesting was that his number into a bad market wasn't a lot more than many people say their cost is. Not that they could explain it, just a number.

And while this person has his numbers cold, he focuses on profit with a goal of hitting his minimum weekly profit by Wednesday.

 

Im just starting to read this thread... but msg #7 made me lose my breakfast.

 

Just had a phone interview with Long Haul Trucking. Sweet!

 

There is no way the op of this article is making 80000 per year leasing a truck for 1000 per week and earning 1.30. I also noticed he kept on adding conditions to his numbera after people called him out on his bs story.

The best he could do is about 1000 a week barring no major truck repair and maybe 40000 if guy works about 50 weeks out of 52 weeks in a year. There is no way he is doing that.

I also figured there are agents of big companies or brokers trying to argue the ridiculous notion that 80 cents per mile is the true operating cost of a vehicle with a trailer. Non sense.

 

I own my trailer, and my operating cost is well below 80 cpm.

 

No tractor/Trailer payments?

I hope to put away .15 for maintenance, .10 for future tractor purchase/good down payment, and .05 for future trailer down payment.