Owner Op. or Company driver...Hmmmmm

nothing like skewing the numbers to push your agenda. Not to say the numbers are wrong but they are low where you want them to be. That mileage rate is worst case, I wouldn't run for that even though I could make a good living on it but then again I don't have state income tax and no truck payment so cut your truck payment figure in half and add it to the maint. fund.

You didn't include FSC.

 

I'v been there too, and lost em and drove company for 9 years swearing I'd never buy another truck. but we se where that ends up.

I told ya I find that rate to be rather low you are figuring in and you didn't include a fsc. Now what are you talking about, Lease operator, independant? You didn't list a fsc so I would think you are talking about independant but I don't know anyone with there own authority who would drive for anywhere near that rate you listed. So I would think you are talking about someone who buys a truck, no trailer and leases it to some company. Now I totaly agree there are some companies out there offering $.95 to owner ops but even they offer a fsc on top of that. And I agree I don't know how anyone could pay a truck payment and run for that rate.
Back when I had my trucks we had our own authority and we wouldn't run for les than $1 a mile, that was the early and mid nineties and fuel was something like $.82 gal.and shop rates were $40hr. Back then maintenance was our highest cost not fuel. I compleatly agree that I can not believe people are stil running for $1 a mile 10 years later.

 

I posted this at another site and thought it might be helpful here as well.

Many who are familiar with my posts already know I am opposed to Lease purchases and this may help others in "crunching the numbers" to decide wether its worth it or not.

You said you want to do "better" than what you are doing as a company driver. You think becoming a lease purchase driver will be the answer. Lets take a look at some rough figures translated into a cpm formulae.

I will attempt to give you some rough figures to see if you will do "better" or worse. I will use 50 weeks for the year assuming you will take a 2 week vacation.

Leasing a truck through the company you work for will usually cost you around 500 to 750 per WEEK (depends on the company but lets use the lowest payment of 500).

Now lets get a cpm cost. For a solo driver that drives 2500 pay miles with pay of .90 cpm plus a .35 cpm fuel surcharge equates to $1.25 per mile.
The truck payment equates to .20 cpm.

Now for your fuel cost. Assuming your truck gets 6.25 mpg at 2500 miles you will have had to purchase 400 gallons of fuel at an average national cost of $3.35 per gallon will cost you $1,340.00. This equates to .43 cpm for fuel costs.

Now you have 2 types of insurance necessary for an o/o or l/p which is collision coverage for your truck and bobtail insurance. This is a cost which varies widely based upon the truck, your experience, your mvr, and the company you select. For this example I will use 350.00 per month. This equates to 87.50 per week and will cost .028 cpm.

You will have to get workers comp insurance (depending on the state you may be elegible for occupational accident insurance which has a celing of 100,000.00 benefit) which has no limit and does cost more. This will cost about 125.00 per month or $31.25 per week. This is .01 cpm.

Now many companies will require you to se aside .08 cpm for a maintenance account which should be used for pm's , breakdowns, tires, etc.

Now lets look at medical insurance. Many will claim you don't need it but I disagree. You better have some insurance either for yourself or through your spouse. Having the medical costs factored into your business plan it becomes 100% deductible for the company side as opposed to paying for it yourself and only getting a portion of your premiums deducted. For a good insurance plan with prescription plan for a solo driver (non family in good health) will cost about $400.00 per month or $100.00 per week. This is .032 cpm.

Now you have road use taxes, fuel taxes, and 2290. The road and fuel taxes may be calculated and paid under your lease agreement but be sure to check if they charge it back to you. The 2290 is $550.00 per year alone. Each state has a different tax on the fuel and roads so I will just set aside .04 cpm for these. This should cover all your road, fuel, and 2290 taxes.

Now to figure out your benefits for the 2 weeks vacation. Lets assume you want 1000.00 for a week off. This will be a total of 2000.00 that you will have to set aside which equates to .0128 cpm.

Now being off for 2 weeks means no revenue for the truck so you should have built in the fixed expenses for the truck payments and insurances into your business plan. The costs for 2 weeks fixed expenses would be 1,437.50. this is .0092

So based upon these figures your cpm cost should be .762 per mile.

Now these figures assume the company you lease on to will pay for the plates, permits, and liability insurance (while under dispatch, laden and pulling their trailer).

Other expenses that can take a bite of you are scales, tolls, and lumpers. The company might cover these then again they may charge it back to you.

For the tax implications you are now an independant contractor and must pay your estimated quarterly tax. Your lease carrier will not do this for you. Remember too you now are on the hook for the full 15% tax for fica and medicare. As an employee your employer paid 7.5 % on your behalf andyou paid the other half.

Be leery of additional chargebacks such as trailer rental fees, qualcomm installation and usage charges, trip pak fees, Administrative charges for calculating your road use and fuel taxes.

So in summation you will have about .488 cpm to pay yourself from which you then calculate your tax burden. It would be a good idea to set aside money for a retirement account and replacement costs of the truck. I recommend .10 cpm for these. Half toward a new truck and half for retirement savings. This would drop you down to .388 cpm.

You should also be aware that any breakdowns or pm's will have to be taken care of by you or YOU will have to hire someone to do them. Ideally your maintenance account will cover this.

In the event you hire your friend to drive you will have to pay his workers comp, and calculate all his taxes including withholding and pay half of his social security. Of course with 2 guys on the truck your revenue will go up and operating costs over all will go down (after you have met your fixed costs that is).

1 more note is many of these lease deals have a clause in them for mileage and over usage penalties in the event you exceed a set amount of mileage per year. Much the same way a lease car has an allowance of 12000 miles per year your lease truck may have a 120,000 limit with a penalty assessed for each mile over that.


Now after all that if you are making more than .388 cpm and have paid benefits such as discounted medical, dental, vision, 401k with employer match, paid sick days and/or holidays then I think you will be making LESS in the long run overall AND have alot more head aches than a company driver does.

Lets not forget the truck you will be leasing is probably identical to the trucks the company drivers are driving too.

As for the average mpg of a truck I am lucky to get 5 mpg with 25000 lb loads out to CA and back to Pa. This will vary based upon terrain, weather, truck specs, and driving techniques.

I also did not list any loss for idle time or out of route miles which will drop your "profit" even further, nor did I list disability or life insurances which are traditionally paid by an employer and if you choose to include them your operating costs would go up even higher.

 

great JLK has a new friend. god help us all vbmenu_register("postmenu_338460", tru

 

I don't sugar coat anything. My situation may be different that yours and his is different than ours. I believe in letting people make there own decisions based on the information. They should all do there own research and find there own numbers and nobody should try to tell them the numbers. Everyone has there own agenda in it's my opinion that info from any person, regardless of who they are will be bent in the direction of there agenda. Whether they mean to do it or not. So if the person does there own research they have nobody to blame but themselves if they either don't do it or don't do it right.
You say I want to sugar coat it, I say you are trying to discourage people from doing it. It's the same thing your anti o/o buddy there does. I don't know why you do that, or why he does. Not really any of my concern. Mabey an owner operator stole your ol lady, beats me. Like I say everyone has an agenda.
I did my research for my market and my situation. I know my numbers very well but I don't go around posting them to try and influence others. I know full well that my numbers would work for very few other people.
And besides regardless of how bad the numbers may look there are some of us who it is more important to have some control of our own lives. Personally even at your numbers it's something I'd still find worth while. Other like yourself apparently are satisfied being an under appreciated and utterly replaceable driver. Whatever trips your trigger bud