Looking to switch to O/O

Operating costs is what I'm trying to figure out. I know what my fixed costs are such as fuel, plates and insurance $1000.00 per month.

The repair/maint costs is what I'm mainly concerned about on a 2000 pete pulling 140,000 lbs.

 

Well, you have to figure in preventative maintenance, annual inspections, and figure a set amount each week or month to put into your maintenance account. You'll want to start with a chunk in your maintenance account, but that doesn't count towards your monthly costs. You should be able to get some figures from whoever will be doing your maintenance for those amounts.

Then you figure out a mileage rate per month to start with. Since you've been driving, you can pull the prior year's miles for something to work with. Total up all of your monthly costs including your maintenance, etc, divide it by the mileage, and that should give you a good working number to start with.

 

Some other costs to figure in will include taxes since you are self employed, IFTA, IRP, log books, physical, drug testing, tolls (if they apply), permits, postage, accountant . . . Those are just a few more of the things you need to take into account to get a true idea of what your true operating costs will be.

 

You need to get the FSC broken out from the rate and understand the basis behind it. For the company I drive for the FSC is designed to hold the fuel cost at $1.46 per gal, on loaded miles only, and you need to get 6 mpg. This week my FSC was about $.40 per loaded mile. My mpg has been in the mid 8's because of the bad weather, so an increase in the price of fuel increases my income.

Your insurance cost is very much higher than mine. these are my costs for all of 2010.
81 O/O COLLISION INSURANCE 876.72
83 O/O NONTRUCKING LIABILITY 300.04
86 O/O OCCUPATIONAL ACCIDENT 1,680.12

I bought a 2000 century freightliner in 2004 with 640k miles on it. I've done well with it. I think in your case I would be setting aside 12 to 14 cents per mile in the maintaince account.

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If you can manage your money, ie keep enough available to survive the once in a while $5k vacation for a week due to breakdown, then you can. If on the other hand you live right on the edge, you will go over!

good luck

Ken

 

Thanks for your feeback guys. Our rate is basically 2.05 per mile + FSC. They expect us to achieve 5mpg. We are always empty one way and paid the full rate both ways.

I have been told my some co-workers that this rate is on the high end in the industry, but when i do the math I question that. lol. Hauling 140,000 lbs is alot of wear on the truck and 5 mpg is not exactly stellar!