Hill Brothers: The latest info. request

Hey, Jim! Not sure I understand your reasoning for writing the above - go figure that I'm confused In my post, I did use the assumption that your costs were approx. the same, other than fuel - that is, I hope, obviously clear since there are waaaaay too many variables to make exact comparisons.

With that said, if we use $3.00/gal, you at 8 MPG & Stevieg at 6.5, that's a difference of approx. $0.09/mile - 2,450 X .09 = $220. This should be the difference in each of your "Net pay" other than differences in some deductions - truck payment, insurance, etc.

It is very clear that your costs are different!

L/O and O/O income with Hill Brothers is also "linear" - i.e. DH and Mileage Pay per Mile. I am very interested in what you define as the "expense curve", though. In my humble opinion, expenses such as fuel and maintenance, are "fixed" - i.e. the approx. same per Mile. The costs for Truck Payments, Insurance, Base Plates, etc. are "variable" - i.e. they change Per Mile based on how many miles you run.

Now, after 2,450 miles his fuel expense is still .462 (w/o FSC) and yours is .0. His income with 550 more miles at $0.90 is $495 and yours is 0. After FSC (I'm using $0.23 / mile - changes weekly), his additional "Net" is approx. $368. Subtracting your "Fuel Savings" from above, his "Net" difference should be approx. $148 more than yours.

It's not a lot more, but its approx. 11% more and he's reduced his "Costs/mile" for what I think of as "variable costs" - Truck Payment, Insurance, Base Plates, etc.

I'm trying to understand this business, because I'm in it and want to maximize my profits while doing it. I'd appreciate, as always, any constructive information.

 

Whether you're a "Company Driver" (cents/mile), a L/O, or O/O with a fixed cents/mile, then you can't change your incoming - your Gross will be "Linear". Your thought, Stevieg, of looking at a Company that provides access to variable rate loads is the only way! Risky - maybe. Doubt it, but you have to look inside, since it really boils down to what and how you want to do this.

Have fun, and be careful out there!

Al

 

tracking fuel mileage is important because it can be used to let you know if there is a problem with your truck. needs an overhead/injectors/charge air cooler.

this week I had to run hard down to shelbyville, tn to make on-time delivery. 70 in Missouri, 65 the rest of the way. but still got 7.22 on the ecm. coming out of Georgia i got an identical 7.22 running a lot easier. 60 mph. the only difference on the way down was i tried to stay off the cruise and had about 200 miles deadhead. both loads weighed 38,000. i was able to run slower because my logs and load didn't require it.

for the last 12 days my ecm has me at 7.09 for 4669 miles. I have been pretty much sitting today because another owner operator stole my load, without Hill Bros permission, out of a shipper in Calhoun, Ga. He just grabbed and left since his load canceled. No call to Hill or anything. Hill Bros was able to get me a load up to Plano, IL that I could drop anytime. But since they weren't going to have a load til Monday I will drop in the am when they I have a reload for me.

We will have to get together sometime and discuss this stuff. One recommendation that I haven't tried but have heard good things about is Fleet Air Filters. Its a lifetime air filter that can be cleaned then oiled. Cost is $342 with shipping. Mine is in the mail. And also Pittsburgh Power Mufflers. The cost on that is like $200. From what I have been told the mpg gain for both combined is about .5 Not bad considering the cost.

 

I guess what we are both saying is watch your mpg. fuel and your truck payments will be your biggest cost. and since your truck payment is fixed that won't change. your fuel costs can be a huge savings depending on your mpg and how much you pay per gallon. I just paid $2.62 down in Tennessee compared to the pump price of $2.89

 

Hey, Stevie!

Definitely agree about getting together to discuss. I love talking about this stuff, since there's always something new to learn!

Don't know anything about that "specific" air cleaner, but anything that lets the engine "breath easier" is better for mileage and the engine's life - BTW, that's also why I liked the comment about you using Synthetic Oil! I've heard/read really good things about Pittsburgh Mufflers. I've forgotten the Gentleman's name, but there are folks, I think somewhere in PA, that produce Glider Kits for Cat engines. It's completely redone engine with polished and balanced parts, etc. That along with a lower Ratio rear - 2.52 - and I believe Pittsburgh Mufflers and they're getting up to 10 MPG with even more HP. I'm not suggesting looking at one of those Kits, I'm just concurring with the direction that you have been going on to maximize your Fuel mileage.

 

I am not disagreeing with you at all, I am just asking you to consider looking at your costs the same way as your Income - i.e. Cost per Mile. Because your Income is CPM, then looking at your Costs this way converts them from "fixed" to "variable". Another way of looking at these "variable" costs are that once the Week is over, they come back whereas "fixed" costs are with you every mile you run!

As an example: Let's say your Truck Payment and other assoc. costs (base plate, insurance, etc.) are $700 per week. Now, what are your Cost's per Mile if you run 2450 or 3000 miles per week? $0.286 vs. $0.233 - a difference of approx. $0.05 per mile!

Now, as far as costs such as Fuel (MPG, not Cost at the Pump), Maintenance, Tires, etc. you can see how these are more in the area of "fixed" costs. Yes, they can vary, but in relationship to Cost per Mile, typically not very much. Maintenance and Tires have average Mile Points on when they need to get done and their Costs can be fairly anticipated - i.e. New Steers at 80,000 miles with a cost of $600 - $0.007 per mile (change the mileage interval or price, and you'll see a fairly insignificant difference in CPM). Once you have established your MPG, it will stay fairly steady over the long haul, unless you make some type of physical change - i.e. Super Singles, Muffler, Air Cleaner, etc. - but, when your new MPG is established, it will again remain fairly stable.

Using your most recent 7.09 MPG, that's a difference of approx. $0.04 CPM. That's a big difference that's nice to take advantage of when possible.

Regards,
Al

 

The reason fixed costs are called "fixed costs" is that the number never changes. fuel costs are always variable in that various factors affect them. mpg, price per gallon, weather. If you 3000 miles a week and burn 500 gallons of fuel 1 week and 450 the next then the cost of fuel per mile goes down. When JR says that he is using $.13 a mile for fuel that is an average for the year. The reason a lot of drivers track their expenses based on a per mile basis is they need to know those numbers so they know how much to charge their customers when they book a load. If the rate on a load is $1.00 mile and their cost to drive the truck is $.50. they then know exactly how much they can make on the load. Since we are on a mileage pay basis i already know how much I maker per mile so all I need to do is figure income and subtract expenses. Its still nice to know how much you make per mile.

 

I believe you are referring to Kevin Rutherford. He has a midnight show on satellite radio and a weekend show from 4pm to 7pm.

As for the gliderkits I believe you are referring to Fitzgerald's in Crossville TN.

Pittsburgh Power is the outfit that offers the special mufflers, power box, crank shaft dampener, etc.

Other recommended products seem to be the OPS1 oil purification system which keeps the oil clean and can extend oil changes practically indefinitely (based upon regular oil sampling that is).

 

You nailed it - thank you! I've not heard his show, but I've read a few articles in some of the Trade Mag's

And again! I confused the Power with Muffler, but now that I see it in writing, I agree that is the Company I was incorrectly referring to.

 

Actually, the difference is likely that the numbers you are comparing aren't the actual ones. For example, while my truck does report just under 8 MPG via the computer my actual fuel purchase divided by miles (and adjusted for FSC) shows about 13.1 CPM fuel cost which is something along the lines of 9.5 MPG I think (given that 20 CPM adjusted is 6 MPG assuming no idle or OOR).

There are a bunch of different ways to look at it, and yes you are right that any fixed cost divided by a varying number of miles can be treated as variable.

While the income is linear, it is the expense side that varies and, in my experience, has an up-shaped curve towards the end of the graph representing more miles. Since all drivers are limited by the HOS there comes a point where I run out of hours and my miles stop for a time. Someone looking to increase income drives faster to get more miles which increases total income but also increases expense at a faster rate. Some drivers routinely drive 70-75 or whatever the speed limit allows and take as many miles as they can get, but when you break down the profit and loss it shows them working for not much more than a company driver and receiving none of the benefits.

One example was an (anonymous) driver who in calendar year 2009 grossed more than I did by driving 148,000 dispatched miles vs. my 124,000. He took home $51,000, I took home $71,000. He (or she) elected to drive 24,000 miles more during the year and take $20,000 less income as a result. I pointed out to the person in charge of the o/o and l/o program that this driver made about 34.5 CPM net with no benefits, considerably less than a company driver with the same truck would make.

Hope this helps,

Jim