How owner operators can be profitable

Please convert to US Dollars, and US miles, I think it would make the analysis more meaningful to the majority of readers.
Thanks!

 

The biggest part that is always forgotton and overlooked...

Pure Determination,Sacrifice,Common Sence and Extreme Hard Work..Many fail at this in the ''field'', after they close there laptops and put there ''blue print'' down.

 

Well there are other tricks to this I won't mention because it gets too complex and involved. However the idea isn't about saving every dime to put in your pocket, it is about making the truck work better in the long run with the finances. Some think it is an idiotic idea to replace tires say at 200,000 but the residual asset that is left over sometimes pays itself off in the long run, selling tires opposed to getting a core charge back if the tires are in good shape.

My goal is to limit downtime and to keep that truck running, PM is a big part of it but too many don't look at it that way, they think changing the oil and greasing the chassis is all that is needed until something breaks. Greasing the chassis on my trucks is done with a Groeneveld system, which has saved money in the long rung (took two years to pay itself off).

See here is the thing, wait time isn't an issue, my trucks specialize in different work, so a customer may be 800 miles away from a drop and getting back to that customer to pick their load up would be a waste of money, even if it is covered by the customer (sometimes it isn't). While it sounds like it can't be applied to normal trucking, it can be if managed right and it can be applied to deticated customers where return loads are frequent but not necessarily consistent. It all depends on how much someone wants to put an effort into making revenue, while I learned that even if you aim for the big bucks every load, you may be losing money or losing opportunities when you are inflexible.

 

Jeez, here I thought business was bringing us something wonderful.

His little breakdown I have been doing for a year now. Based on a spreadsheet I have been sharing for over the last year.

Loads shout be based I. Fixed overhead + variable expenses determined for how long you'll be under that load.

I'll elaborate on this later because it's easier from an actual computer.

Maintenance is it's own enemy and friend. How much is too much and how much is enough. But what IS critical is understanding mean service life of a component and realize some times it's really cheaper to schedule and plan that component replacement (ie turbo) BEFORE a catastrophic failure that takes out other components or additional down time expenses.

Cheaper to simply replace an $1500 turbo job or a $15000 engine from an impeller failure.

 

Maintenance is it's own enemy and friend. How much is too much and how much is enough. But what IS critical is understanding mean service life of a component and realize some times it's really cheaper to schedule and plan that component replacement (ie turbo) BEFORE a catastrophic failure that takes out other components or additional down time expenses.

Cheaper to simply replace an $1500 turbo job or a $15000 engine from an impeller failure.

Ahhh what MN? Did you suggest I randomly rip the turbo off based on a time used calculation? Regardless of condition? If i were flying an aircraft then maybe.....

What I do is watch my guages, run a severe duty maint schedule and inspect, inspect, inspect. I'm under that gal every weekend looking, I look at every load point and obviously every time I fuel........ so far so good.

JMO

 

Yes, I DID suggest that.

Mean life failure on all the literature that I have read suggest a turbo has a life expectancy of 750-850,000 miles. Low end is about 650,000 and highest I have ever seen is 900,000.

So anything PAST about 775,000, you really are living on borrowed time with that component. A turbo can fail at any point for any given time. But eventually, (ya know what a bell curve is?) the odds are, around 775,000 miles you'll need a turbo. It could fail any time on that bell curve, the higher it is, the more likely it is to occur.

You have 780,000 miles on the truck. You are sending it in for a week off to have a punch list of things to do to it. Annual inspection, brakes, LOF, the list goes on.

Do you spend the $700 for a turbo and the labor to install it on scheduled down time? Or keep running it and 3 months later you are down for 3 days in Greenbough Ala because that turbo failed at 813,000 miles?

You've now spent 700+labor, $40*3 for motel, lost wages for 3 days down on the road, $380 Fixed OH * 3 = $1140.

You just cost yourself TWICE what that turbo WOULD have cost you. Haven't even looked at the service position it cost you with the broker for a line down item underload.

Maintenance is one of those things that is a crapshoot. You can pay for it one way or the other. Some see it as, "Don't spend it until it MUST get replaced" (what you are saying) and others see it as, "Don't take the chances if it's past a reasonable life expectancy." (what I am saying)

Somewhere in the middle ground is "reasonable."

A turbo is a major issue for me. It's failure can take out the entire engine. Is that an acceptable risk for you when you KNOW that this component is really on borrowed time? $1500 vs $15,000+

 

Well yes it can be a two edge sword, but here is one of those complex things, how does one figure the threshold for the maintenance cost metric for an older (out of depreciation) truck?

This is the idea.