I’d like to hear some Independent O/O opinions on this article.

Huh? How does paying a driver not equate to business expenses? I’m not going to pay myself (or a driver) nothing. It’s an expense for the business.

Even the article in question says driver wages are up 15.5% and are a major factor in operational costs.

Maybe we aren’t understanding each other.

 

I hate to see guys go out of business but if you can't run lean get the hell out asap. You can throw tons of money at a failing business and lose it all over time or get out from under it and do something else. Trucking will still be here when you finish licking your wounds and want to give it another spin.

 

You have said 2 things

1. Including driver pay
2. You reference paying all your family's bills.

So the problem is that calling 2.53 a mile "operating expense" given what youve said, means your buisness made 2.53 ALL miles, and your buisness therefore makes 0 profit.

You can say that your driver pay is 150,000 a year at 1.25 a mile (120k miles) giving 1.28 in all other operating costs, but realistically your driver pay is probably about 50 to 75 cpm, leaving true operating costs at 1.78-2.03/mile

You can disagree with me and runningman all you want, but .50 to .75/mile is probably a realistic driver wage you could pay to someone else.

The advantage of seeing it this way is you get to see when the buisness turns a profit.

Just using all the money you have coming in and calling it your operating costs+driver pay obscures reality. Did you just pay 15000 out of pocket for your daughters braces? Its a personal expense, NOT an operating expense

 

I appreciate the response but it’s a misunderstanding. I paid myself around 75k Which equates to around 79 CPM over my 94.5k miles. I’m not including personal expenses so not sure where you’re getting that from. Maybe the “all imaginable expenses” making people think personal expenses but it means business expenses. I’ll edit the post. Edit: guess I can’t edit it anymore.

Here is a breakdown of last year that I’m basing this number off of, hopefully it clears up any confusion. 239k expenses / 94.5k miles = 2.53 CPM. The only “personal expense” is driver pay since it’s myself lol.

Gross Revenue
$343,406.03
Total Expenses (Incl Driver Pay)
$(238,962.27)
All-In Miles
94486

 

Thats where the confusion comes from.


Looking at that, not bad, after expenses youre up 100k (yes, less taxes etc), regardless of the expense amount, thats pretty decent.

My only question then is why are your expenses so high? If its a new truck and trailer payments, maybe thats the answer, but if so, that should be rapidly drawn down as you pay them off, leaving significantly less in operating expenses.

Personally, i have low overhead on equipment because its all older. (YES i know, equipment maintenance is higher (maybe))

Expenses for 2022 as i look at things are at 2/mi, but that included 8 brand new trailer tires, a new differential, transmission, 2 relatively major breakdowns motor mount bolt snap and trailer disc caliper issues)

Add to that that i only did 70k miles, had a ton of downtime, and bought a house and moved with all the stress that entails after being in one place for 9 years.

This is to say,
a. Operating costs should have been lower due to more miles, and
b. I was house hunting at the peak of the market, with interest rates going up, i wasnt all that focused on maximising my buisness revenue/margins
C. If i amortize the tires, differential, transmission, that would drop operating costs quite a chunk, not to mention (a) lost time/miles

 

What you don't understand is there's a LOT of owner operators out here that depend on their wife to have a good job with benefits and retirement. So they run cheap and have fun because of that but they would argue the point and claim they don't move cheap freight blah, blah, blah. If they were on their own covering those business/household expenses they'd end up folding. Yeah a 1 truck operator better be able to cover household along with business expenses otherwise they're just working for free or paying for the work.