Need experience to go with new CDL

We all had to suck it up and pay our dues......
$38-40k a year for a new company driver is not unreasonable.
Anything more than that is a stretch but can be done.....

What's wrong with school? - if you want to do this that badly, it's an investment that needs to be made for your future.
I went to school in 1989, albeit a crappy school - but I still went and back then I paid over $2k for a 4 week course...

It's not wasted time....trying to circumvent proper training is.

PS. Many O/O are leased to a carrier. They will usually NOT permit a rookie driver. So even if the O/O is willing it could be a challenge
to get that approved. If you found an Independent O/O - then it would be up to them and their own insurance.
My company would laugh at me if I even suggested the thought of a newbee. They want 3+yrs experience and a minimum of 200,000 miles before they will
even look at underwriting a policy. A newbee can cause so much financial damage it's not even funny....and these insurance companies
know that...Progressive so far is the only O/O company that would consider a newbee. A newbee policy on your own rig with no experience is about $10-12k/yr with a perfect MVR. Ouch...

 

I didn't mean to be too harsh but you are barking up the wrong tree! You are just like every new driver that comes to the industry. They all think that owner operators are making the big bucks. They all are clueless to the real cost of operation. Here is some information on profit from some research I did.

The average (net) profit margin for corporate America over the last 25 years is 8.3%. The airline industry has a (gross) profit margin of 5% and the software industry has a (gross) profit margin of 90%. In the airline industry the average (net) profit margin is 4%. The average (net) profit margin in the trucking industry is 4.8% and the oil industry is 8.2%.

Every bit of information I can find on trucking puts the average profit margin between 4% and 6% except for specialized hauling. Now granted a smart businessman with a single truck may have as much as 10% net profits. Now if you are running 110,000 miles at 1.80 CPM average that equates to $19,800. At 6% net it is $11,880.

Here is a typical owner operator cost of operation. The first is for a Lease/Purchase and the second is for an Owner/Operator with his authority operating as a carrier. The first one won't be able to get you on his insurance and the second will pay $3,000 - $4,000 additional plus be limited to an operating radius, which could take him from the most profitable lanes of operation.



Lease Purchase

DESCRIPTION....................YEAR.........MONTH.........WEEK........MILE.........%

Miles..........................................147,552.............12,296............3,074

REVENUE - 1.33 CPM - 100%

Revenue....................................196,244............16,354............4,088............1.33............100

FIXED COSTS - 0.34.5 CPM - 25.5%

Truck Payment..........................28,123.............2,344................586............0.18.............14
Trailer Rent..................................8,660.................722................180............0.05................4
Truck Insurance..........................4,200................350...................81............0.03................2
License & Permits.......................1,918................160...................40............0.01................1
Wrkmn Comp & Health Ins.......4,427................369...................92............0.03................2
Road Expenses............................4,427................369...................92............0.03................2
Phone Internet & Other.............2,361................197...................49............0.02................1

VARIABLE COSTS - 0.93.5 CPM - 70.5%

Fuel..............................................91,954.............7,663.............1,916..........0.62..............47
Repair/Maint Escrow................11,804................984.................246..........0.08................6
Driver Wages.............................33,494.............2,791................698..........0.23..............17
Fuel Taxes.....................................1,033..................86...................22...........0.01................1

TAXES - 0.05 CPM - 4%

Federal Tax..................................1,904.................159...................37..........0.01................1
Social Security............................4,710.................392...................91..........0.03................2
State Tax.........................................734...................61...................14..........0.01................1



With Authority

DESCRIPTION....................YEAR.........MONTH.........WEEK........MILE.........%

Miles..........................................110,400..............9,200............2,300

REVENUE - 1.78 CPM - 100%

Revenue....................................196,512............16,376............4,094............1.78............100

FIXED COSTS - 0.40 CPM - 23.5%

Truck Payment..........................15,490.............1,291................323............0.13...............8
Trailer Payment...........................6,496.................541................135............0.05...............3
Equipment Insurance.................8,000................667.................154............0.07..............4
License & Permits.......................3,312................276...................69.............0.03..............2
Wrkmn Comp & Health Ins.......5,520................460.................115............0.05...............3
Road Expenses............................5,520................460..................115............0.05...............3
Phone Internet & Other.............2,208................184...................46.............0.02...............1

VARIABLE COSTS - 1.16 CPM - 64.5%

Fuel..............................................69,269.............5,772.............1,443..........0.63..............35
Repair/Maint Escrow................15,456.............1,288.................322..........0.14................8
Driver Wages.............................41,952.............3,496................874..........0.38..............21
Fuel Taxes.....................................1,104..................92...................23...........0.01................1

TAXES - 0.12 CPM - 6.5%

Federal Tax..................................5,285.................440................102..........0.05................3
Social Security............................5,580.................465................107..........0.05................3
State Tax......................................2,201................183...................42..........0.02................1

PROFIT - 0.10 CPM - 5.5%

Return on Investment...............7,600................633.................158..........0.07................4
Profit..............................................3,266................272...................68..........0.03................2


So obviously the first operation is out because of insurance and the fact that he is running himself and his equipment into the ground just to make payments and a living.

Let's look at the second operation. Let's say we run 55,200 more miles because you drive them. My cost of operation drops 0.08 CPM for a total of $14,000 in additional profit of which I spend about $6,000 to pay for insurance and additional rookie repairs.

That leaves 0.38 CPM ($20,976) to pay you for the miles you drive. It leaves me with enough to pay your taxes (employer's share), workmen's comp and health insurance.

Now you will spend at least $5,000 on the road for living expenses. This leaves you about $16,000 or the equivalent of an $8.00 per hour job. It leaves me wearing my truck out at 1.5 times the normal rate and I have $8,000 additional profit to show for it. I did get the money in escrow to cover repairs for the additional miles.

So who wins here? I lose 6 months of equipment use because of additional miles for which I am compensated $1333.00 per month. That is about $500.00 per month less than my equipment payment or replacement cost. You get less take home pay than Wal-Mart pays. How long do you think two drivers that aren't getting proper compensation for their efforts will get along?

 

Personally, and this is just my opinion, I think you are making a huge mistake. This little short cut you are taking is going to bite you so hard. Do a search on this site because someone just posted about how he did this and now he is up poo poo creek. He is now asking us advice on how to correct his mistake. Do yourself a favor and take this advice now instead of later.

Just to clarify, you already have an O.O that is going to do this for you? I ask this cause .35 a mile for training with an O.O is awfully outrageously high! Realistically it should look more like .17 - .22 a mile. If he can insure you.

 

Drug screens are non transferable.

I must say, I admire your drive and motivation. Please remember that everyone here is trying to help you and provide good, positive advice. Sorry it bursts your bubble though. I know that feeling!

 

Great post Big John, those are numbers I have been wanting to see as I am, not now or even in the next 1-2 yrs thinking about going owner/op so i was looking for some numbers as far as how to come up wth operating expense. Don't know what yet possibly containers, there is no shortage of that around here, or some local flattbed work.I have talked a few times to a guy I see around that does this and he seems to do ok, but I haven't asked him about much in particular. He does have a cool looking yellow Pete long nose day cab with a flatbed spread axle trailer that has yellow fenders on the drives and trailer axels, you can't miss him coming.

 

i see a lot of this must go to school to get cdl stuff.. i have never ben to school.. got my class b 10 years ago.. pepsi hired me on as a side bay driver. about 1.5 years ago and I got my class A on the job. now im a bulk/transport driver for pepsi. i dont know if OTR co. would pick me up our not.. but im not looking to do OTR anyhow. i dont know if its good pay compared to over the road but i make 1000-1200 a week. as high as 1350. in 1 weeks pay. m-f 4:30 to 5ish 1 sat a mo.

 

That's about double what alot of these otr make.........

 

really wow did not know that. so then way do you need to go to the big schools to do OTR then. i don't relay get it. our did i just luck out on getting hired on to Pepsi.? but the side bay work to get my time in did just about kill me lol but now i do love it.. some times i think it would be cool to be OTR and make the big bucks.. but i gees thay don't really make the big bucks then

 

Things were different 10yrs ago and they WILL be even more different soon.
Classroom time will be a requirement of CDL...it's coming.