Keeping track of O/O operating costs

If you do that math, you will see that he is trying for a 21% profit. If your costs were 1.55 CPM, take that times 0.79 and you get 1.96 CPM. Take 1.96 CPM less 1.55 CPM equals 0.41 CPM. Take 0.41 CPM divided by 1.96 CPM and you see that at 1.96 CPM with a cost of 1.55 CPM you have a profit of 0.41 CPM or 20.92 %.

 

Isn't a cost of 1.55 per mile awful high? I am in a lease purchase with a $602.16 per week truck payment and I only average about $1.53 per mile to the truck in revenue and my profit has been $.564 per mile since I started this lease on 3/17/11. That is after truck payment,fuel,insurance and .07 per mile to my maintenance account.

 

That depends on how you figure it. I figure 0.10 CPM for maintenance/repairs on truck and 0.14 CPM with trailer. My costs include a replacement cost, return on investment, wages and benefits and taxes and social security.

The balance, if any is business profit. This is how businessmen in other businesses figure it. Unfortunately most truck drivers don't figure replacement, ROI, wages, income taxes and social security and seldom allow enough for maintenance.

They just figure their net balance covers wages and taxes and forget the rest. It would be hard to run on most leases if owners figured their true cost of operation.

This is the reason it is so hard to get a truck loan, most don't run it like a business.