Gentlemen, please help me solve this

DAVEST LLC · Jun 20, 2023

Gliding ProStar said: ↑

The easiest thing to calculate is your fuel cost per mile. How many miles per gallon does your truck get? Don't use what shows in the trip computer or the instrument cluster. Pen and paper here. How much fuel does the truck hold when full? Say it's 250 gallons. Next, how many miles can you drive on 250 gallons before you are empty and need fuel. Let's says it's a 6.0mpg truck.
250 gallons x 6.0mpg is 1500 miles. 250 gallons at your current fuel price of let's say $3.75 per gallon = $937.50

At these prices and fuel mileage it cost you $937.50 to run 1500 miles.

$937.50 ÷ 1500 = $.625 cents per mile

The more expensive the fuel the more to operate per mile. The better the fuel mileage the cheaper it cost to operate.

Now, how much are your fixed cost? Insurance, retirement, PrePass, any monthly fees that stay the same, etc.?

Next, monthly miles average so far for the year. Let's call is 10,000 miles per month average. FIXED COST ÷ MONTHLY MILES = FIXED COST PER MILE. Let's say your fixed cost are
$2,500 ÷ 10,000 = $0.25 cents per mile

Next, maintenance. New tractors can cost more to maintain than older tractors. On my older, non-emissions equipment I could operate them at $0.07-0.15 cents per mile depending on what I had to spend to maintain them. Newer, modern emissions equipped trucks can cost as much as $0.25 per mile or more if they become shop queens. Look at your monthly maintenance receipts for the year, total up each month and divide it by your monthly miles for each corresponding month. Engine replacement will add quite a bit to your monthly maintenance cost so it will take a while for the monthly average to come down after you recuperate from that large dollar expense. Let's say you spend $.20 per mile and average 10,000 miles per month which equals $2,000 per month towards maintenance. This needs to include anything you spend on the truck or trailer. Lights, wipers, tires, engine, brakes, air line fittings, etc. Tally up each month and divide it by that months miles.

Then, are you a sole proprietor or an LLC taxed as an S-Corp? Do you pay yourself a weekly or monthly wage? If so, how much? Is it the same every month or do you vary the dollar amount based on net revenue?

Let's say you pay yourself $1,000 per week x 52 weeks = $52,000 and you average 10,000 miles per month which will be 120,000 miles for the year so $52,000 ÷ 120,000 = $0.43 cents per mile.

Add it all up using my numbers and math...

Fuel - 120,000 miles x $0.625 per mile
$75,000.00 for fuel

Fixed Cost -120,000 miles x $0.25 cpm
$30,000.00 in fixed cost

Maintenance-120,000 miles x $0.20 cpm
$24,000.00 in maintenance cost

Driver Wages-120,000 miles x $0.43cpm
$52,000.00 in driver wages

Using the numbers I provided as an average and guesstimated the total cost to operate is...

$181,000.00 for 120,000 miles per year.

Now, knowing what your fuel cost per mile can aid you in seeing that a problem may exist when your fuel mileage goes down and the dollar amount starts to rise. If you have a 6.0mpg truck but over the last few months it has gone down to 4.7mpg or 5.2mpg you can start to look at WHY. Is it winter and you are burning a ton of winter blend fuel in the cold northern states? Are you idling a ton at night to stay warm or cold using the AC without an APU or bunk heater? Have all of your loads been 45,000lbs. in the box running I-70 through the mountains? Or has nothing really changed and you've been running the same lanes and same weights and getting fuel at your favorite cheap stops? If not much has changed in your operation then you know something else is causing the loss of fuel economy and it's time to figure out why before it breaks the bank.

Hope this helps. Not everyone can catch on. Not everyone is a savvy businessman but with some basic math and some input from you and you can figure out what it cost to operate a truck, a flower shop, automotive repair shop or a bicycle shop. Put in the work now so you can reap the rewards and before something goes south you can see the numbers to help prevent financial ruin and bankruptcy because an engine lets go twice in one year. Use the math and your own numbers.
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You are magnificent taking your time to write all this out, I adore you sir, truly the experience is enormous, thank you very much for explaining all this, I have been an owner operator since 2017 and I just go out there and pick loads without knowing how to put all this calculations together but now that rates are bad, I find it necessary to calculate. Thank you sir God bless you.

Eddiec · Jun 20, 2023

https://www.dat.com/load-boards

DAVEST LLC · Jun 20, 2023

Eddiec said: ↑

https://www.dat.com/load-boards
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Thanks boss do you think I should change me subscription to a higher one that let me see spot rate?

Gliding ProStar · Jun 20, 2023

DAVEST LLC said: ↑

Thanks boss do you think I should change me subscription to a higher one that let me see spot rate?[/QUOTE

If your subscription doesn't allow you to see the spot market rates and trends I would upgrade if possible so you can see the trending rates in an area/region. Any information you you can add to your arsenal of decision making abilities is a bonus. Use the tool until you learn to see the trends and rates yourself and with your customers and then stop paying the extra money.

I have always considered myself a very good salesman with a phone and nothing but time on my side.

I'd be going to a new area or low rate area and I would use my Google-foo to find local companies and then call every single one on my 11hr driving clock and see if someone had something I could make money with on my trailer.
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DAVEST LLC · Jun 20, 2023

Thanks

Stringb8n · Jun 20, 2023

If you have hazmat endorsement it may not be as bad for others who don't have it. But, at the same time hazmat doesn't mean its going to pay a buck more per mile than anything else either.

DAVEST LLC · Jun 20, 2023

Metalicious said: ↑

If you have hazmat endorsement it may not be as bad for others who don't have it. But, at the same time hazmat doesn't mean its going to pay a buck more per mile than anything else either.
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Thank you Boss I love this forum with people that has your kind of thoughts. I just got my letter for background check and i have been studing for the test, i will give it a shot on Friday. I appreciate your contribution sir God bless

Mnmover99 · Jun 21, 2023

Your company also has to have the extra insurance and programs in place to haul Haz Mat. Just getting the Haz Mat on your CDL is not enough. Big fines to break those rules.

Snailexpress · Jun 21, 2023

Mnmover99 said: ↑

Subscribe to a higher cost option on the load board. It will show loads available in the area you are unloading at.
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Load board is for fools. If I post 1 load 10 times it will show you 10 loads. Haven't you seen mega brokers posting load from every city in 200 miles radius?

DAVEST LLC · Jun 21, 2023

Snailexpress said: ↑

Load board is for fools. If I post 1 load 10 times it will show you 10 loads. Haven't you seen mega brokers posting load from every city in 200 miles radius?
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Its true that they post load to some city and ill think its easy 20miles deadhead and later discover its 180miles deadhead and i don't understandwhythey do that

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