Crude Oil Owner Operator- Profit & Loss Statement (Full Disclosure)

Discussion in 'Oilfield Trucking Forum' started by Rockdoctor, Nov 1, 2018.

  1. Rockdoctor

    Rockdoctor Medium Load Member

    OK, I'm between companies right now so this is probably the only time I can come out and disclose this type of detail without running afoul with some higher ups. DO NOT ASK ME WHICH COMPANY THIS WAS WITH !!! I am going way out on a limb here making this info public and opening myself up to all kinds of criticism. Also I can't provide a copy of the rate sheet, that would be a breach of my contract agreement.

    Please READ the info if you are interested. If you ask me a question and the info is already here I'm NOT going to repeat it. I am about to become VERY busy so if I do not reply right away I may be away from the computer. If you find this info helpful please hit the 'THANKS' button so I know I helped some people.

    THE OPERATION:
    This is a one truck operation hauling crude in South Texas running in the Eagle Ford the entire time. The truck is operated by me and another driver so it runs 24 HRS per day for 6 days then takes 2 days off. When the truck breaks down it is usually out of service for at least 7 days and this has happened several times this year.

    THE TRUCK & TRAILER:
    This truck was purchased up north and brought down to Texas so it had a few rust issues. It is a glider and it is ELD exempt BUT the carrier it was leased onto required an ELD be operated in the truck. The truck was paid for in cash therefore you will not see a truck payment as an expense in the statement below. The truck was purchased with 500K miles on it and there were numerous items which needed to be addressed. The engine had a major oil leak and needed an overhead ($8500). Other items have been slowly addressed over the last 10 months and I suspect going forward maintenance costs will drop significantly. Bobtail insurance is about $2500 per year. Plates are about $1K per year. The trailer, maintenance, and insurance on it are all covered by the carrier so you will not see that as an expense on the statement below, The truck averages 6.4 MPG.

    THE COMPANY STRUCTURE:
    I am the sole owner of the company and I have one employee. The employee brings home $1250 per week after all deductions and has free health insurance. Work supplies, safety equipment, boots, FR clothing, and cell phone bill are also free to the employee.

    THE INCOME:
    Income is lumpy as an O/O. The best month was $47K in revenue and the worst month was $8K in revenue. Low revenue month was due to 1) A slowdown in work 2) Truck broke down and was at the shop for 12 days 3) A vacation was taken that month. Examples of hauls I may do- 19 mile haul which pays about $190 and takes 2 HRs to turn; 46 mile haul which pays $270 and takes 4 hours to turn. Also I receive a fuel surcharge on these hauls. For the 46 mile haul at current fuels prices I would earn another $30 added to the $270 the load pays.

    THE EXPENSES:
    I would highly discourage anyone from taking this on if you don't have a cushion in the bank or a credit line to draw from. Here are some examples: 1) The month I only made $8K in revenue I had a $10K LOSS for that month. 2) As a company you are expected to make quarterly tax payments so one quarter I cut a check for $15K to the IRS 3) The truck broke down and since it takes so long to get work performed I tend to stack up the problems and then have them repaired all at once so one time I paid the shop $13K in one payment. If you are not good at putting back cash into a savings account when times are good you WILL fail.

    CONCLUSION:
    I've hauled crude for about 6 years as a company driver and one year as an O/O. There are perks to being an O/O. I can set my schedule, my start time, and I don't have to drop a load because my slip seat is back at the yard waiting on the truck. If I know there is a particular lease which is hard to get into or the pumper never leaves a full load in it, I can refuse the work (no forced dispatch). I get to leave my supplies and gear in my truck and I don't have to worry about a slip seat losing my tools or another company driver coming over to my rig to 'borrow' my fittings only to never return them. I don't have to worry about someone leaving me a flat tire or a broke rig to deal with at the start of my day.

    There are also many downfalls to being an O/O. On my days off I still have work to do, sometimes lots. Maybe I need to do accounting, go purchase supplies, coordinate a repair, grease the truck, get an oil change or a truck wash and sit around for hours trying to get that accomplished when I would rather be home watching NFL. Maybe I had a bad settlement so now I have to rob Peter to pay Paul, stress out and evaluate my bills for the week. Basically I have to run a business and I don't get to hand the keys off to the next driver at the yard and head home to relax on my days off.

    Anyway, I'm not telling you to go for it and become an O/O or to stay on as a company driver. My point today is simple- to provide you with the most information so YOU can make the BEST decision for YOURSELF.
    -------------------------------------------------------------------

    JAN-OCT 2018 Profit and Loss Statement

    INCOME
    Revenue $329,417.94
    Total $329,417.94

    EXPENSES
    Accounting $1,200.73 (payroll and accountant, tax software)
    Communication $3,265.43 (cell phone, wifi, cable TV service)
    Fuel $46,302.66
    Insurance $16,948.00 (workers comp, bobtail, employee health)
    Maintenance $40,360.93 (oil changes, tires, repairs)
    Office $663.91 (postage, supplies)
    Rent/Lease $1,250.00 (storage unit for business)
    Supplies $2,523.01 (safety items, tools & items to perform work)
    Tax/License $1,063.25 (base plate, 2290 tax)
    Tolls/Parking $96.00
    Travel $10,698.94 (business trip expenses)
    Uniforms $800.00
    Wages $60,221.30 (one employee)
    Total $185,394.16

    SUMMARY
    Income $329,417.94
    Expense $185,394.16
    Total $144,023.78
     
    Last edited: Nov 1, 2018
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  3. Makeajump

    Makeajump Medium Load Member

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    Apr 19, 2014
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    Thanks for sharing this information with us. That gives me a real world snapshot of an O/O crude hauling operation. Very informative post. Thanks!
     
    KwBulk18 and surf_avenue Thank this.
  4. Rockdoctor

    Rockdoctor Medium Load Member

    Glad to see you found it helpful. When I was in CDL school I had an instructor who had been in trucking for over 30 years. He said, "You DO NOT want to buy a truck!" He told us when something goes wrong you want to hand the keys to the company and say, "Here you go, something is wrong with your truck" then go home and relax, LOL!

    It's been harder than I expected but I needed to challenge myself so currently I am happy with my decision. I also have a new outlook on what these companies face when they turn us drivers loose in their trucks., haha!
     
    Dave_in_AZ and Lepton1 Thank this.
  5. Rockdoctor

    Rockdoctor Medium Load Member

    Since we just had Halloween, here are a few SPOOKY stories about the O/O side of the crude business...

    - There was a guy who left one company as a driver to join another company as an O/O. He didn't buy his truck but instead leased his truck and trailer from the company. He was getting some huge settlement checks every other week, but he didn't put back any money for maintenance or taxes. Then the company had a couple of major accidents, one even occurred inside the primary offloading facility! The company lost their right to enter the facility and just about overnight could not fulfill their contract and lost that work too. So now the O/O with a leased truck and trailer still had that same payment to make each month but very little work. You can imagine how that ended for the guy!!

    - There was a guy who was at a company with company drivers and O/O. He was being paid one rate to haul from a particular lease BUT the O/O was getting so much more in his mind. He became anxious and ran out with very little money and financed a truck so he could become an O/O and get the better rate. He put just about everything he had in the bank down on that truck. It came time to go and get his plates for the rig. Guess what, he didn't anticipate just getting a plate can cost over $1K and he forgot to finance his sales tax so at the time he was getting the plate he also owed around another $2.5K on top of the $1K. Then he dropped his rig off to get a wet kit installed. Well, the company looked it over and said he needed some other things worked on before they would approve it. Next thing he knows he owes the company he leased on to about $8K! It also took 2 weeks for the company to complete the work and this guy was not bringing in any income the whole time, ouch!

    - There was a guy who went to a company which mainly operates with O/O. This guy was a diesel mechanic in the military so he had a huge advantage over most O/O. But he leased on to a crappy company and he did a lease/purchase agreement. The company was always getting his settlements wrong, never in his favor. They would leave off loads he had performed and once even put another O/O's entire fuel bill for 2 weeks on his settlement which resulted in him getting a negative settlement! He eventually got fed up with all the extra hassle of being an O/O and went to work for another company as a company driver.

    - There was a guy who was at a company with company drivers and O/O. He went out and put everything he had saved down on a truck. The truck cost over $40K and he has slowly discovered the truck is a PURE LEMON! The truck breaks down literally twice a month and always seems to have something new popping up. So now this guy is on the hook for a lemon, he is dumping money for repairs into the truck every other week, AND he is missing out on income because he is sitting at home with no truck to drive. Oh, and his truck has a reputation for being unreliable so the carrier he is leased on to will not give him the best runs out of fear the work won't get completed. He was supposed to make a couple of income tax payments to the IRS by now but doesn't have the cash, so when April rolls around there will be penalties and interest waiting. OUCH!!


    I don't want to sound like I'm being so negative therefore I will wrap it up on a positive note...

    - There was a guy who was at a company with company drivers and O/O. He had saved up about $50K and wanted to become an O/O for the same company he worked at as a driver. He found a decent truck and this guy is very mechanically inclined so he spent a little over half of the $50K to purchase the truck outright and had money left in the bank. But I be ######, just about the time he became an O/O and got rolling, the company lost a lot of their work to a competitor. He was able to skate by for a few months and was actually making less than he was as a company driver but eventually leased on to another carrier doing crude oil and now he is KILLING IT at the new company, sometimes doing over $1500 per day gross!
     
    Last edited: Nov 2, 2018
    Dh46, Dave_in_AZ, Rodeorowdy and 4 others Thank this.
  6. Skypilotj

    Skypilotj Light Load Member

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    Oct 4, 2017
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    Can you name the companies above? I'm really wanting to be O/O and don't want to make the same mistakes.
     
    cprems Thanks this.
  7. SoTxTrucker

    SoTxTrucker Bobtail Member

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    Jan 6, 2013
    0
    Thank you so much Rockdoctor…..this information really helps with informed and educated decisions.

    I hope the last O/O story is yours...killing it!
     
    Rockdoctor Thanks this.
  8. Rockdoctor

    Rockdoctor Medium Load Member

    I will tell you the company who wrecked it up inside the offload facility was Bridger. Anyone who worked in Houston is well aware of that story, LOL! The facility had a train inside which would push crude rail tankers around. One day a guy got impatient and tried to beat the train as it was backing up and moving forward shuffling the tanks around and then BOOM!

    The company that could never get the pay right was Gibson. I heard nightmare stories about guys trying to get paid. Maybe others had better luck with them. They also had a reputation for being wishy-washy. They would get rid of their company drivers and go all in on O/O then bring company drivers back. Eventually they got rid of everyone who wasn't in West TX. Then they abruptly decided to try and bring everyone back.

    The other places are not bad to work for, the issues usually popped up due to the O/O not being well capitalized. That is the big lesson to take away from this thread. Don't rush in because you think you are missing out. Make sure you have some spare capital as a cushion and keep some money to the side for taxes and maintenance.
     
  9. Rockdoctor

    Rockdoctor Medium Load Member

    No problem, glad it helps out.

    I"ve done OK you can see I'm up $144K thru OCT but that story about the guy killing it isn't me. I'm not very mechanically inclined, LOL!!!
     
  10. daf

    daf Light Load Member

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    Dec 19, 2011
    Ks
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    Thank so for sharing. Currently a company crude oil Buyer for Rose Rock.
     
    Rockdoctor Thanks this.
  11. Crude Truckin'

    Crude Truckin' Alien Spacecraft

    1,688
    4,112
    Oct 22, 2016
    North Dakota, Eh?
    0
    You just go buy the oil for the driver? Or you haul it too?
     
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