An 80/20 Split

spyder7723 · Jan 23, 2020

jamespmack said: ↑

I would have ran more or was able. Had a direct customer cost me 25% of the year. Not thier fault and not mine. Plus a 2 year old at home that I could stay home with easier than momma.

All in all, I didnt buy nothing new or do anything fun in 19, but we lived. That's still successful in this game.
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Spend every minute you can with that little girl. The loads will still be there when she is older and not craving your attention like she does now.

BADBOY007 · May 20, 2021

fortycalglock said: ↑

On an 80/20 you’ll pay bobtail and physical damage on your truck. They should pay the cargo and liability.
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Who pays the ifta,tags,HVUT, trailer

BADBOY007 · May 20, 2021

spyder7723 said: ↑

Hope this doesn't come off to harsh, but im a cold hard truth no sugar coating kind of guy. If you've never owned a truck and been responsible for picking profitable lots and negotiating rates all those years driving don't mean squat. The only thing driving experience does is teach you not to hit stuff and how to not tear a truck up. while that's very important it has little to do with the business side of operating a truck profitably.

The cold hard truth is you don't know Jack about making money with a truck. And that's ok, none of us did at first. But it's also the hardest thing to over come for a first time truck owner. The pride of thinking you know what you don't will only hold you back and extend the learning curve. The sooner you accept that the faster you will learn the things to make you profitable. Ok now that that's out of the way let's get to it.

I see a couple red flags in the things you mentioned.
1: you say you know the miles are there. That's company driver mentality. Lots of miles does not mean profit. In fact the reverse is often true. My most profitable weeks have been the weeks with the fewest miles ran.
2: some guys strictly get their own loads. Why? If the carrier has good paying direct freight why would some guys never haul it. That could be a sign that their direct freight is cheap. This leads into #3.
3. Their direct freight is household names everyone would recognize. That's not necessarily a good thing. Especially so with dry van and reefer freight. Those big household names are usually the cheapest paying loads. The big guys have decades of experience minimizing their costs and they are #### good at it. Trucking is just another cost of manufacturing to them and even less important than the packaging of their material. They have perfected how to minimize their trucking costs.
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So what dou think a 80/20 lease should pay meaning what would you expect the carrier to pay

RStewart · May 20, 2021

madmoneymike5 said: ↑

I am currently a company driver for this carrier. I know the miles are there because I've driven them. I have the owner's phone number on speed dial and he knows all ~100 of his drivers by name. He and everyone in the office are super focused on keeping turnover among drivers down. I've never experienced a carrier like this one. It's...weird! And nice at the same time.

Yes, a handful and they're household names—names you would recognize. But I can also go find my own loads if I want. Some of their leased drivers only pull loads they find themselves out of preference and the office is fine with that. Others do a mix, while others just take what is given to them.

All drivers and employees are on a bi-weekly pay schedule, but completed loads are included on the next paycheck. I don't have to wait for the customers to pay nor do I pay any fees for factoring, etc. I don't mind a bi-weekly paycheck. I'd take a monthly paycheck if I could because it simplifies my budgeting process. (I do zero-based budgeting which means that every time I get paid, I have to sit down and decide what to do with each and every dollar until I have zero dollars left to allocate. So the more frequent that process is, the more time I have to spend on my finances.)

Thanks for this. PTO and blower? Not sure what that is.

Looking at the responses so far, it's nice to know that the number being offered to me isn't absurd.
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Forget miles. You don't want miles anymore. You want max revenue on minimal miles.

jamespmack said: ↑

@ 20-25%

They should provide

Trailers
Insurance less bobtail
Ifta
Operating authority
Payment in less than 14 days

You should provide
Tractor
Bobtail insurance
License plate
2290
Add your trailer at .11 cents per mile. Van or standard flat. Specialty trailer more.

It can go either way on the trailer part. I prefer my own trailer.
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Truck owner pays physical damage insurance.

slow.rider · May 20, 2021

RStewart said: ↑

Forget miles. You don't want miles anymore. You want max revenue on minimal miles.
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Yup, percentage pay is a whole new world. Unlearn everything you've learned and start over.

Bigtruckdrivah · May 24, 2021

80/20 is good, but you need to see the lanes and rates to be sure.

Oscar the KW · May 24, 2021

madmoneymike5 said: ↑

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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Well, did you do it?

Brandonpdx · May 25, 2021

snowwy said: ↑

80/20 is a good deal.
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It's about average as far as I know.

Frankly the guy taking the 20% cut from every truck is the guy you want to be if easy money is what you're after. The other 80% doesn't go that far when fuel and other overhead is accounted for.

Brandonpdx · May 25, 2021

fortycalglock said: ↑

No FSC on brokered loads is only a few pennies difference per mile when you do the math. 20% is about what it takes to make an o/o worth it. The 10% deals always make you pay for your insurance and nickel and dime you to make up the rest. If you already work for the carrier now and they know you want to lease to them, ask to see what your truck would have made at 80%. Then subtract your estimated expenses and see if you like the margin. If you’re making .50 plus benefits now, then .75-.80 is a good labor cost basis depending on bennies. It would suck to take on the risk and stress of an o/o to net less than you do now.
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At the end of the year if you're only doing about as well or maybe slightly better then the company guys, it's a bad deal. Sell that thing and go back to driving a company truck on a W2 cause it ain't worth the financial liability, tax hassles, and psychological burden IMO.

snowwy · May 25, 2021

Brandonpdx said: ↑

It's about average as far as I know.

Frankly the guy taking the 20% cut from every truck is the guy you want to be if easy money is what you're after. The other 80% doesn't go that far when fuel and other overhead is accounted for.
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When you consider landstar is 65/35.

Unless that changed.

Others are 75/25.

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