Cents per mile bottom line.....what did i miss?

W2 or 1099 for your driver also impacts the bottom line. I see Workman's Comp, so you are going W2 way, which is the right thing to do in your case. However, going W2 way, you also have to account for half of your driver's SS taxes in your expenses (around 7.5% in total of driver's salary if I am not mistaken).
Are you thinking of giving the driver any additional benefits like health ins?
And, have you thought about % pay model instead?
How did you reach 0.04 for Workman's Comp? It looks high.

 

What about health insurance. Your driver might not have it. But would you figure the cost in that pays for your coverage? Do you have health insurance through your wifes job? Even over maint. issues. Medical bills will take you down faster than any maintenance bill ever would.

 

If you're putting a driver in the truck, and planning to average $1.78/mile to the truck with your expenses at the $1.60/mile level, I don't see it working unless you have about $25K in liquid cash reserves. And even that is stretching it a bit. Just my 0.02

 

To be fair, this is a 'worst case scenario' proposition. He doesn't plan on averaging that, just what's the lowest he can before he can't make money. Hell, I drive about 2,100 miles a week, of which about 500 of those are empty and am still averaging $2.00-$2.20/mi AFTER taking the quick pays from my brokers. I did a worst case scenario as well, and what I expected to make. Can I do better? Sure, and will keep working at eliminating the deadhead and finding even higher priced freight. But for now, I'm not starving.

 

honestly....

learn the difference between a fixed overhead cost and a variable cost of goods sold and how to pay for them. You will end up totally screwing up the accounting if you run everything as a variable cost based off mileage.

 

Yea your missing fuel surcharge

 

Or is he just including it in the total rate?

 

FSC only will matter if you are attempting to bid on and secure a direct contract rate and you want to adjust for changing fuel prices.

If you are just running single loads or such (spot market) what difference is FSC going to make. It's all part of one price tag.


but to break down a fixed overhead to a variable price rate is wrong. you can't manage your cost or your income at that point. It's the same expense if you run 100 miles or 10000 miles a month. You can't assign it a cost per mile then.

 

You can't compare O/O rates and expenses to a company drive. There are so many decisions that are made that as an O/O you can say "huh, worth the extra hassle" or "I'll sit an extra day" or "I'll drive MT." Many of these decisions with a company driver go against the better rate and increase CPM.

Good example is NASTC fuel program. Last month it would have been easy for an O/O really planning fuel stops to average $.40/gal savings. But the program averaged around $.20/gal for the month. Then you have MPG. Company drivers with incentives to slow down don't.

Rate - pretty easy these days for an O/O to get $2/mile pulling a van. But at times you have to pull something that is less than desirable. Get a shorter haul load that you have to sit on for the weekend. The list goes on and on of things that you can do to get a better rate that will cause you to lose a mileage company driver.

If you can't make a company driver work for the rates you can get leasing to a mileage company then it is a huge risk. And that is advice based on someone coming in with no trucking experience. This just seems like he is looking for the rates and expenses to justify doing this.

 

my truck gets about 4.8 and i'm surviving.

next week is a holiday. i'll actually have a chance to get the problem looked at now.