Profitable # $1.30 cpm avg - 2k miles a week! - Disprove It!

While your numbers look ok you will need to increase your rate per mile or your miles ran per week. Since much of your cost is fixed expense every mile you run after that puts more money per mile in your pocket. I usually found that about 2500 miles was break even to a company driver, after 2500 is when I could generate the revenue I needed to be happy. My O/O's are still making money, Only one has quit in the last 7 months they got out of trucking all together. Incidentlly my rate per mile has trended downward for about 6 months untill the last 2 weeks, we are at about 1.46 plus fuel surcharge. Thats a mix of about 70% customer freight and 30% broker freight.

 

GDC,

While I am only a student, I would think the minimum of miles you need to break even is 3000. At 1.30 a mile it comes out to $3900 and that is before taxes get taken out, fuel pay, insurance, etc. I would like to hear MM's view on this and see what what his needs are. I would like to see Pharm, JasonTheRock views as well. These members are all o/o's.

KH

 

medical will cost you at least $800 a month for two people unless you are in a group plan

figure about $1500 a quarter for tax =3000

$24000 a year with 2 people will qualify you for food stamps and medicaid

 

I won't dispute your numbers. Although I should.

But I will point out the distinct "quality" of life issues you have brought out.

I can make $30k a year working 8 hours a day 5 days a week. And not work near as hard as you did.

But, if it's what you want to do. It makes all the differance in the world.

 

I am researching the details of potentially becoming an O/O and, have run into the following significant headwinds:

1.) Without a year of recent (within the past 3 years) OTR experience no major company will agree to extend you a lease. Consequently, your on your own to find freight to haul.

2.) The only major broker (that I have found) that is willing to work with a potential new O/O such as myself is CH Robinson. Several dispathcers at CHR have ballpark rates of $1.10 - $1.20 / mile as typical in the market today. As a carrier for CHR you need to provide both a tractor and trailer.

3,) A reasonable assumption of miles / week is 2000 - 2300.

Let's look at some numbers:

1.) I have a quote for $45,000 for a 2005 tractor with 394,000 miles and, a 2006 53' dry van trailer. With 0 down, financed for 48 months # 4.8%,the monthly nut is $1032. Add to this the cost of truck, trailer and cargo insurance, $542/mo., health care insurance = $780/mo. and, license & permits = $183/mo. At 100,000 miles / yr, this fixed cost / mile would $0.304. Let's add the driver's wages to this figure. At $40,000 / year the cost of having a driver is $0.40 / mile. Adding these two fixed costs together ($0.304 + $0.40) shows a total fixed cost of $0.704 / mile.

2.) On the variable cost side, the biggest component is fuel. At 6.5 mpg and $2.50 diesel, the cost / mile is $0.385. Adding this cost to the total fixed cost ($0.704 / mi) brings the cost of operation up to $1.089 / mile.

This $1.089 / mile does not take into consideration any costs for routine maintenace, tires, equipment repairs, tolls, lumpers, scales, meals, lodging or, taxes. Using conservative industry estimates these costs would add somewhere around $0.20 / mile. That brings the total cost of operation to right at $1.30 / mile.

Anybody know where I can get freight paying an average of $1.30 / mile so I can realize a dream?

 

Probably right, if looking at a typical 80/20 plan. I have a Blue Cross / Blue Shield HSA plan that only costs $394 a month ($5 Million lifetime payout, $5500 annual deductable with no copay requirements)... I am 52, smoker, no issues, wife is 49, takes thyroid medication. I contribute $400 a month into a health savings account that continues to grow like a 401K and can use it how I like after age 62 1/2, just like 401K or IRA. The best thing is the tax advantages.... with a traditional plan, you cannot deduct any out of pocket until you reach 7.5% of your adjusted gross income. With an HSA, you deduct everything you contribute to the savings account and the premiums. There is no out of pocket like with a traditional plan. You pay for all out of pocket from the savings account. Therefore.... everything is deductable without having to meet a threshhold, and what you don't spend out the savings account, continues to grow with interest or can be invested just like a 401K, depending on where you have the savings account established with. Heck, my monthly premium payments are lower than when I was in a similar BC/BS plan with a carrier as a company driver.

Regarding getting in a group for any insurance, one of the best places to look for good rates with good insurance choices is your local Farm Bureau (all states have Farm Bureau organizations). You do not have to be a farmer to be a member. They usually have very competative rates with high quality insurance carriers. Also, you could discuss options with an independent insurance agent who has a broad choice of insurers they deal with. I did that and got a very, very good plan at a darn good rate.

 

If u want to run 2k miles a week I want to know what your going to do the other 5 Days that week

 

Granddaddy, your profile says you have been a trucker for 14 years. Aren't you already making MORE than .30 per mile wherever you are now?

Unless this move is more about your freedom than about the money. I'm sure you have earned that right as well.

 

MM is right, what about the other miles?. What I notice about o/o's is that they run hard during the season with their drivers. Then during the slow season they run easy to medium so they have a decent paycheck.

KH