Newbie with a Rate Question

Lots of things wrong here. You will do much better figuring 2400 - 2800 miles a week. All these promotional pieces are based on the top two percent of the drivers, during the busy time of the year, for a two-week period in a great economy. You and I will never see those conditions come together at the same time.

No offense to Onedayaway, if I remember correctly, he doesn't have taxes or drivers pay in there. I challenge anybody to show me a cost of operation of less than 1.30 - 1.70 CPM and I will give him or her a list of what they missed.

Wages, taxes, replacement and return on investment are all operating costs.

That old bull of showing you fuel cost at a dollar something a gallon is a marketing gimmick to appeal to the potential lease operator. While it is true, IMHO it is not relevant to anything.

The only way to do it is figure all your expenses divide by a low mileage projection and get a cost of operation in CPM. Then take all revenue such as freight and FSC and see what revenue per mile is. It then becomes a no brainer decision. If revenue exceeds cost run, otherwise park.

This could be 1.38 CPM (0.975 + ~0.40 FSC) as I interpret it or 0.75 CPM as Bulldog sees it. If it's the highest you can make above average drivers wages and get a slight return on investment. If you are going to be learning to drive and learning to run a business at the same time your chances of success are extremely low. Decide how much you can afford to lose and know how you will limit you loses. Have a backup plan or two and an exit strategy. If you only plan for success you have missed a big part of planning.

You should never lease to a company that pays by the mile. Always look for percentage leases. If you are paid by the mile more miles is the only way to make more money. With percentage leases you can change length of run, freight lanes or miles to increase revenue.

Now the big problem you have overlooked, no company will lease you on without experience. Most have the same or stricter experience requirements for lease operators as drivers. This leaves you the option of getting your own authority. And that adds a bunch more things to learn and reduces your odds of success with no experience. It also increases your insurance costs by $2,000 - $3,000 over an experienced driver. In addition, you will have a 500 - 700 air mile operating radius.

Don't get me wrong; everybody has a right to their dreams and a chance to make them come true. But I don't think a 20% chance of success is good enough to move on. I failed with my first truck and it was new. So my harshness comes from experience not just me running my mouth. If you understand the risks and the odds of success and still want to do it, then go for it.

If you are serious then read all these threads:

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/146942-how-to-become-an-owner-operator.html

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/147854-what-would-experienced-o-o-buy.html

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/125507-what-estimated-operating-costs-o-o.html

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/148340-keeping-track-o-o-operating-costs.html

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/134211-no-experience-but-getting-authority.html

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/134211-no-experience-but-getting-authority.html

Then read all the docked threads in the "Ask An Owner Operator" section.

Then read this thread to see what a mileage lease offers:

http://www.thetruckersreport.com/truckingindustryforum/ask-an-owner-operator/64679-my-numbers-o-o-leased-crete.html

 

They provide the liability insurance, That is normal and a requirement if you run under their authority. Usually you provide comprehinsive, collision and bobtail. Check into this.

 

And that is what all companies claim. This is fine as long as they didn't include the FSC as part of the revenue. It is still a hinky way to calculate costs because it just adds another variable to the equation.

I'll try to break it down:

My way

I get 1.50 CPM freight and 0.45 CPM for a load. My cost of operation is 1.78 CPM with all costs. So 1.95 CPM revenue - 1.78 CPM costs = 0.17 CPM profit.

Hinky Way

I get 1.50 CPM freight. My costs less fuel are 1.15 CPM. My My fuel cost is 0.63 CPM (3.91 per gallon at 6.2 MPG) - my FSC of 0.45 CPM (2.79 per gallon at 6.2 MPG) = 0.18 CPM (1.12 per gallon at 6.2 MPG) fuel cost. Now other costs are 1.15 CPM + fuel costs of 0.18 CPM = 1.23CPM. Revenue is 1.50 CPM - 1.23 CPM costs = 0.17 CPM profit.

Which method do you want to use while on the phone with a dispatcher or broker trying to decide if you want the load.

 

The big problem for you to drive will be no OTR experience and a new CDL. It is good you have a buddy who is making this work and can help. However, when I went under with my first truck I went into business because lots of my friends were making it so I knew I could. That didn't work out for me.

 

Yes Sir. Thanks for the wake up call. I hadn't checked it all day. I'm on it now.

 

Not trying to put you down but you may do ALOT better wrenching then driveing, good mechanics are hard to find and worth BIG$$ parts chargers are a dime a dozen. Even with a cdl and your friend's help , most company's will want a cdl school or so many monthe OTR exp. Good luck