Fair Percentage to Run Under Someone's Authority?

You need to figure out what all you will pay for and what all they will pay for. Whether it’s forced dispatch or not. That will make a big difference in what percentage. If you are paying literally everything you shouldn’t pay over 65%. If they are paying everything you shouldn’t pay less then 80%.

I pay for everything but plate, bobtail, collision, and fuel, and also pay by the mile all hub miles loaded or empty. However, I’m also forced dispatch and run them exactly like my company drivers. Most owner ops don’t like forced dispatch though. But, if I’m paying literally everything including trailer, tolls, ifta, prepass, liability, ELD, load planners, fronting the money to pay them before I get paid, etc then I can’t have them taking off whenever they want because the overhead is significant.

 

Thanks man. My pay isn’t the highest in the world but guys can make a decent living at it for sure. Last year I was paying 1.75 all miles and avg about 2500 miles per week. Right now we’re at 1.50/mi and doing about 2400 miles.

I read about people being leased to these megas getting 1.25 to 1.30 and still have deductions and it blows my mind. They pass up my offer to flock to them just because they are a mega. I think it’s the same mentality as wanting to pull for Amazon just because they are Amazon.

 

I have a question ( raises hand ). Weren't you in agreement on another thread it costs like $1.60 mile to operate the truck?

 

Yeah, that was for someone who has their own authority and runs their entire program and equipment themselves.. Not for someone who owns a truck and pays for fuel, plate, and bobtail. My guy (I only have one O/O) has been with me for 4 yrs so he must be doing ok. He likes not having the high overhead and using our fuel card then just getting it out of his check. He gets his load info knocks it out, gets his next one knocks it out, etc.

Edit: I do agree it would be very difficult for him to put someone in his truck and pay them say 70k per year and make a whole lot of money on top. He did gross 200k exactly last year though and without paying deductions but fuel that’s not bad I don’t think.

 

As far as cost to run a single truck with a new authority. I don't know that you're going to find expenses much higher than mine. New truck and trailer payment, $2k month insurance, etc. My fixed expenses are right at $6200 month, not including salary to myself and my average cost to run the truck with fuel (averaging $5,100 month), fixed costs, maintenance, repairs, not including salary is right at $1 per mile with an average of 12,000 miles per month so far.

So paying yourself a decent wage at .60 mile and you're right at that $1.60

 

It’s my opinion that you shouldn’t base off 12,000 miles per month. That’s not sustainable in the long term. So maybe go off 10,000 per month and that’ll move your per mile numbers accordingly.

I actually base off $2/mi as break even but I also have a yard, building, office people, etc. However, it’s also part of what I learned from Steve Jobs which is called the reality distortion field. If you believe your numbers are $2/mi vs say 1.75/mi. Your going to achieve higher numbers because if you don’t you will go broke. It’s a way of tricking your mind into achieving the unachievable.

 

Im simply basing my miles off of the actual average Ive been running over the last three months. Dropping down to 10k miles per month drops the fuel expense by about .08 as well as maintenance interval costs. Without getting into the calculator, it would be about $1.10 per mile not including salary at 10k per month. It's been pretty easy for me to average those mileage numbers so far.

More than dollar per mile, I have a weekly and monthly gross/net target and break that down to a per day average over 24 days per month.