Costs involved in being an O/O?

I'm leased to Crete Carrier. I bought my truck, a 2006 Freightliner Century, through their used equipment sales program in late July of this year. It's an old company truck, equipped with Tri-Pac APU. It had about 450k miles on it when I bought it. It also got a new charge air cooler, air compressor governor, radiator, hoses, tires (recaps on the drives), and steer axle brakes, among other odds and ends, just before I bought it. I get one free brake relining (shoes only - drums and S-cams extra, if needed) anytime in the first 2 years.

The sales price of my truck was $36,700, financed at 8% (not bad for a first time buyer - better than my credit union could offer). I put $500 down on the truck (wanted to keep plenty of money in reserve, that's why I didn't go with a bigger than necessary downstroke). My payments are $1180.60/month for 34 months.

I went with the whole package Crete offers for insurance, plates, etc. - it was just easier for me paperwork-wise. My finance agreement with Capitol Casualty states that as long as the truck is financed through them, I have to be leased to Crete. I plan to refinance in a year or so, if I can find a comparable or better deal on the interest. Not because I *plan* to leave Crete, but so that I'm free to make a jump if I should find somewhere with a better combination of compensation and discounts. I average about 6.3-6.5 mpg and my fuel discount generally runs $0.25-$0.30 below the cash price on the sign out front of the truckstop, if I use Crete's suggested fueling solution. My net fuel cost out of pocket, after fuel surcharge reimbursement, is $0.189/mile so far. I am free to buy fuel wherever I want - but the discounts generally aren't nearly as good if I stray from their recommended solution. That's probably why they recommend them

With Crete, I generally pick up the supplies and parts that are available from company terminals, at company terminals. That's because Crete will sell me parts at their cost. I paid $5.11 for a Davco fuel filter last week, about $12 for a gallon of Shell Rotella T, and so forth. If I call ahead, they will order me pretty much any part I want and sell it to me at their cost.

Crete pays for the extended warranty from Detroit, good to 725,000 miles.

I could have probably gotten a slightly better deal if I looked around hard enough, but I think I got a pretty good deal overall as it is, and spent almost no time doing it.

I use the services of Mark Swanson, CPA. I submit a cash sheet via his website once per month, and he accesses my settlement info at Crete electronically. I get a monthly P/L statement, showing me all sorts of nifty info like net profit this month and YTD, net fuel cost, maintenance costs per mile, etc.

Check out a thread here, started by jdrentzjr - he's another O/O leased to Crete, who bought his 2006 International 9400i new through Crete's purchase program. He's also a friend of mine (made his acquaintance here, ran into him a couple times at truckstops and terminals, and we talk on the phone from time to time). He has *REALLY* helped me out with advice on a myriad of topics. He's also posted his monthly numbers for quite a while here. I think the thread he started is called "My numbers as a Crete O/O" or some such.

I'm not trying to recruit you to Crete, it's just the only carrier I've got any experience at all with as an O/O. I think their deal is close to being typical of many carriers, though perhaps a bit sweeter than most - but I'm biased, thanks in part to a situation that happened in September when Crete spent about $3,000 they didn't legally have to, on a truck they didn't own, because it was the right thing to do.

 

Really?

I ain't to far from ya & I have no restrictions. I can run my water 24/7 and as long as I pay the monthly bill I don't get bothered.

 

The link below will take you to a thread I've got that shows all my revenue, expenses, & a breakdown of what everything costs me per mile.

http://www.thetruckersreport.com/tr...010-numbers-leased-mercer-transportation.html

 

I'm not sure about Dade county, but a year or two ago, Walker and Catoosa counties had big outdoor water use bans and burn bans. I haven't kept up with it since last summer, but since we're short on rainfall for the year I assumed they still had outdoor water use bans. I could be (and probably am) wrong on that.

In any case, it's a huge pain in the butt to wash a Century with condo sleeper and actually get it clean. I'm just too lazy to do that, and so I go over to the Choo-Choo truck wash in Ringgold, or to a truck wash just down the street from our Ottawa terminal.

 

My "non-trucking liability" insurance, as explained to me by the insurance agent, covers me if I'm not under dispatch and have no trailer attached.

Whenever I have a trailer attached, or am bobtailing under dispatch (such as bobtailing from a receiver who has no empty trailers, to pick up a loaded trailer at a shipper whose trailer pool is overpopulated), I'm covered by Crete's insurance, and they're self-insured.

That's my reading of the paperwork I have here, at least. In any case, I'm fairly certain I'm covered regardless - they kind of require proof of that at the big carriers, to cover their assets

 

How is that truck wash? I've never used them. But here the lady talking to herself on the CB all the time.

 

They're pretty quick. If you stay on top of them they do a good job, pretty much like all truck washes.

I never miss an opportunity to let the folks there know just how annoying their CB advertising can be. It'd be nice if they would limit it to just saying something like "Choo-Choo truck wash at exit 345. Come on down to channel 14 for rates." every 15 minutes or so.

 

There's also the Wash-n-Weigh over off Broad Street, IIRC

To get there from Wildwood, get on I-24 East, take the Broad Street exit and bear left for south. That actually dumps you off on Williams Street. Turn right as soon as you can, onto 25th Street. Cross Broad Street, and they're at the next corner on the right. Reasonably priced, and they have a CAT scale

 

Thx guys. I had the opportunity to buy a couple of trucks with APU's. I've heard good and bad about them. I know a lot of places won't let you idle but will let you run an APU. I really didn't think it would make much difference in fuel mileage. I like to sleep without the truck running anyway. All the noise keeps me up at night. I just hate sleeping next to a reefer. I will circle the parking lot and look for other spots to park to stay away from them.

I'm sure my next truck will have an APU. I've found a couple of Volvo's with APU's for around $19,000 and I can get an ex Wal-Mart truck for $25,000 or less.

Do they save that much money on fuel? A couple of guys have told me they are prone to breaking a lot. One guy i saw in a Freightliner shop said his had broke almost everytime he ran it. He was in the shop that day getting it rewired because it wouldn't start. Seems like the expenses of getting them worked on could over ride the fuel savings and truck's engine wear from idling.

 

I read your post on your expenses vs profit Redd. I have questions about it. Not saying your wrong. You have a lot more experience being and O/O than me. With that said. Why did you list truck depreciation in the cost column? I know it depreciates but you get to depreciate the cost of your truck on your tax return. Thus it should even it out. I have been told by my accountant that the full price of the vehicle is depreciated out over 3 years in my case.

Actually it should not be a cost at all. You get to depreciate the total cost of the vehicle. Then if you sell it after depreciation, it should be pure profit because you have depreciated the total cost of purchase.

I see how a person can go into the hole being an O/O. I spent $19,000 cash for my truck and I have spent another $4000 or so on it just within the first couple of months of running it.

My average gross profit BEFORE I have factored in the truck expenses has been $850 a week. My gross after expenses is negative or very close to it so far. I've basically been working for free. I'm changing companies because of that reason. I'm hoping my truck will not need so many repairs from now on. For a little while at least and I hope to make more revenue with this new company too.