An 80/20 Split

Discussion in 'Ask An Owner Operator' started by madmoneymike5, Jan 21, 2020.

  1. madmoneymike5

    madmoneymike5 Medium Load Member

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    When I inquired with a small carrier about leasing on, they informed me that they take 20% of the load revenue and I get the rest. This'll be my first time leasing with a carrier.

    The first question that came to mind was, is that a typical split or would I be doing myself harm agreeing to that kind of split?

    Then I realized it probably depends on what you get with that 20%. In other words, what am I buying with 20% of the revenue--an amount, mind you, that is greater than my marginal/effective tax rate.

    I could list all the things they provide for that amount, but instead, I think it would be useful to know what you would expect to get for that kind of money.

    So, is 20% an absurd number, and if not, what would you mind to see from a carrier for that split? If it is an absurd number, what is a more reasonable amount?

    Thanks!
     
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  3. blairandgretchen

    blairandgretchen Road Train Member

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    Go ahead and list what they’re offering, who has the freight, trailer etc.

    80 isn’t bad, but others offer 90% if you’re just running under their numbers and on your own for everything else.
     
  4. Brandt

    Brandt Road Train Member

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    Landstar took 35% pulling their trailers
     
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  5. Bean Jr.

    Bean Jr. Road Train Member

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    My carrier is 75-25
     
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  6. snowwy

    snowwy Road Train Member

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    80/20 is a good deal.
     
  7. Long FLD

    Long FLD Road Train Member

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    Percentages aren’t important. How much you will average to the truck is what you should be looking at. 80% of 1.80 is 1.44 but 70% of 2.20 is 1.54 and so on.
     
  8. jamespmack

    jamespmack Road Train Member

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    80% of nothing, is still nothing.
     
  9. madmoneymike5

    madmoneymike5 Medium Load Member

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    I recorded the conversation between myself and the individual I had the meeting with about leasing. Unfortunately, for some reason, the microphone was muted about 2 minutes into the 30-minute conversation. I don't recall all the details, but I'll try to post what I can remember...
    • I pay for plates and permits.
    • I can use their shop for maintenance or repairs, or I can go elsewhere.
    • No charge for using their trailers.
    • Not forced dispatched. I can pick my loads from what they have or I can go to the load boards.
    • I pay for Qualcomm, EZ Pass, and PrePass.
    I know that's not much to go on, but it's all I can remember. I'll need to go have a second meeting with them. I wish my recording hadn't gone awry.
     
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  10. madmoneymike5

    madmoneymike5 Medium Load Member

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    Arlington, TX
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    I get to pick my loads and most of their existing customers are over 2,000-mile runs from the central US to the west coast. But they are also starting to branch out to the east coast as well. I will make sure my 80% is sufficient to cover my costs or else I won't run the load. Well, usually...unless I have to in order to get into a better freight lane. A $300 loss on a load to get to a $1500 profitable load in a better freight lane is better than the same loss while sitting in a bad freight lane. But that's a subject entirely for another day and thread.
     
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  11. madmoneymike5

    madmoneymike5 Medium Load Member

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    I'm confused. What are you really trying to say by that because I can't see why on earth you would think I would earn nothing or be willing to earn nothing?
     
  12. Long FLD

    Long FLD Road Train Member

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    I’d ask to see what their trucks are currently doing if you haven’t already. It will give you an idea of what’s there. Do they have any direct customers or will you be looking for all your own loads? Do you get paid next week for what you do this week? Stuff like that does have some value.

    I pull a food grade pneumatic for a small-ish company. I give up 27%. For that I get a trailer, pto and blower, weekly pay, $70 an hour labor rate in their shop, and they do all dispatching. We have dedicated customers on our outbound loads and our return loads all go to the same place.
     
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