Input on starting new fleet

I think your numbers are a bit optimistic on revenue. Even if you have your own authority, by the time you pay brokers , collect money, pay for nay collections companies etc, your profit per mil may be less. You also need to factor in out of route miles. A load with a 600 mile dispatch might actually be 660 since most people dispatch city to city, not door to door. Now you may drive up to 100 miles deadhead regularly, sometimes more, sometimes less. on a 600 mile run that's 14% now on a 300 mile run that's a whopping 25%. So IMO your profit per mile is optimistic. I'd say factor in 1.40 per mile and if you make more, great. Now i'm assuming your pulling van, I didn't see you mention if you were fulling flat bed or something.

Now, lets make some assumptions:

2500 miles per week, 50 weeks a year (1 week vacation, 1 week for maintenance through out the year)
125000 miles per year (now to make this goal, your drivers have to be turning ad burning)

.20/mile, $500/week, truck payment (New truck, 5 year payments)
.06/mile, $150/week, trailer payment (New Van, 5 year payments)
.20/mile maintenance (DPF cleaning, tires etc)
.62/mile Fuel @ 6mpg 3.75/gallon
.40/mile Driver

Total expense: 1.42 per mile OUCH.

Now in this model you wont turn a profit until the trucks are paid off. But that's ok if you have the capital. In 5 years you will be making .26 per mile or about 32,500/truck untill you need to replace it which is probably 8-10 years. Now we can shave a few cents off the expenses. If you dont have many DPF problems, maintencee could be less then 10 cent per mile (.08 profit now). If you can get average fuel econ up to 7mpg thats .09 per mile for a total of .17 profit. (you now see how majorly important fuel economy is, so buy high mpg trucks)

Id say in your first 5 years you would make -0.02 - 0.17/mile. Anything that increases fuel econ is major. Super singles, air tabs, fass fuel system, PP mufflers, micro blue etc. All this cost money though.

Now why is your back office costing 40,000 a month? I mean if the business is big enough it could, but start small untill you understand the industry. Dont go out and buy 100 trucks when you dont have drivers, loads or anything else ready. 8 figures is at least 10,000,000. You could burn 1.25 mil on only 10 trucks. If you put fel saving upgrades on them you could burn another .25 mill. I'd start with a 10 truck fleet that you run yourself so you get to know the industry before going "all in"

 

Keep in mind, most trucker exaggerate what they make on the forums. Even if gross is 1.85 it might not be once you pay some one to go get your money they owe you and pay the broker commission. Your certainly not going to get that as a norm on longer haul.

 

Good luck OP. I would definitely try to buy an existing carrier and fine tune it in your situation. Something to keep in mind is that truckers are a rare breed (thankfully). There are quite a few posters on this forum that portray they have factual experienced based knowledge when in fact their knowledge is nothing more than opinion, usually regurgitated from some other nitwit.

 

No mention on your plans on how you will get the customers to bring in that revenue.
Where would you set up shop? It's tough enough selling as I do for a company started in 1934, let alone a start-up.
Would you be the salesperson? If you are good with sales, start with a small brokerage co. to learn the business while also representing
other carriers independently as a sales agent.

 

Im an independent owner-operator..I do fairly well,(1 truck,1 trailer)..I looked into expanding..But after all the intangibles, Its not worth the effort.
I use freight brokers 80% of all my hauls. I dont like the way they negotiate on certain lanes...But i certainly know how to squeeze every drop of water out of a wet towel.

Ive been driving since 1989........If you CANNOT put a minimum of $20,000 in your savings account. (YES THAT MEANS PURE PROFIT), Everty 6 months....Its not worth your time to run a trucking company.

As a 1 truck independent......You are spending more hours in this busioness than most others. your time should be IMPORTANT to you..And your rates better reflect that

Yes..My home,Cars and livelihood are at a comfortable level for me now....Hard work and smart trucking got me here.......It feels good when you have all assets under control and YOU as a trucker,Can hit the street knowing you are in control.

 

Total expense: 1.42 per mile OUCH. Better be getting a min of $1.80 per mile freight and even then thats you bare min you can pull for and scrape any type of profit

 

Not that a O/O Right HERE!!! EXACTLY what I'm working on. Stay Safe Driver!!.

 

My late brother in law was an accountant for a large carrier...

He once told me there are only 2 ways to make money as an owner.

You either own 1 truck or 100 trucks.. anything in between is a losing proposition...

 

@tow: that's pretty much what I gathered from my analysis as well, because back office costs are too high until you get about 100 trucks.

To answer someone's question about my back office costs, this is the staff I thought of hiring to start: general manager, secretary, two dispatchers, business development manager/sales rep, trainer/head of safety, and an IT systems person. This seems reasonable.

You guys are fantastic for providing such constructive feedback.

 

Don't forget a transportation accountant and lawyer, both are probably something you outsource, but gotta factor the cost in...