So you want to "own " your own company

I could gross $5000.00 per week, every week. That's me running from NC to Ca and back. Of course I would be putting down 5000 miles or more to do that, so the $5000.00 figure per week means nothing unless you calculate into the equasion how many miles it takes you to make that amount. Miles count, or you will be broke soon.

 

You must know what it costs to run your equipment. The problem with breaking down costs by the day is that you don't run every day. It is more accurate to calculate by the mile. When you break down costs by the day and then take a couple of days off then it throws your costs off. If your costs are $100/day and you take a couple of days off then it raises your daily costs. Besides, your daily costs can vary according to where you run, type of freight, etc., For instance, you may run 500 miles today and 700 tomorrow. You will burn less fuel today than you will tomorrow. That throws everything off if you calculate by the day. It makes your daily costs variable and unpredictable. When you break costs down by the mile it is much easier to do your projections.

 

Definitely have to calculate your costs by the mile! You're paid by the mile, so you have to know your per mile costs to know if a load will give you a good profit, a profit or a loss.

 

That is wrong on so many levels. your per mile rate if needed is your final answer not the point where you start. As I stated before per mile is fickle.

The fewer miles you travel the higher your per mile break-even point becomes. The higher your miles on a load the lower that BEP is. By only using miles and not time your percentage of charging the incorrect per mile rate is around 85%.

Miles is important in parts of your calculation but if you take all your annual costs (Fixed, Operational, Fuel, and Load Specific) and add them all together it will be an answer but a useless one.

 

Thank you so much for pointing out the obvious. I think everyone here realizes that they need to charge a higher rate/mi for a 200 mile load that takes a day than a 600 mile load that also takes a day. Maybe before you blurt out "WRONG!" from now on when you see someone post about their rate/mi, consider for just a minute that might have already taken all this into consideration, and are using rate/mi as an abbreviation so they don't have to type out a paragraph explaining all the expenses they've taken into consideration every time they post.

 

You can repeat yourself all you want, but it doesn't make your method any better.

Your fuel and your driver's wage are your two biggest expenses, and they're both variable costs. A sitting truck generates fewer expenses than a running truck. If your truck generates $500 in a day by driving 400 miles, it probably lost money. If it generates $500 in a day by driving 10 miles across town, it made a profit.

Your method may work for you, and that's great, but there are lots of carriers that are doing just fine looking at per mile costs.

 

Then why do I have carriers that have been in business for 30 and 40 years hire me to help them determine what their hauling rate range need to be, and then when I complete the analysis and provide them with the formulas their profit margins increase by folds. Believe me or don't that is your choice. If you think your method is the best, by all means continue doing what you are doing, but you are leaving money on the table that should be going into your pocket.
Example: I took a 35 unit trucking company that was using a method similar to what you do, changed them to my system and increased their revenue by $910,000 per year. But if your not interested, no skin off my teeth. I'm here to help, but only if you want it.

I just came on here to see if any of the thinking has changed through the downturn or see if the micro carriers were still doing things the same way while expecting different results.

Well also to stir the pot a bit to get people thinking.

Fascinating, sad but fascinating. This per mile kool aid is really plentiful.

It doesn't make any difference how you are paid; per mile, per cwt, per day, per hour, the math is the same.

 

So which miles do you use to do this calculation?
A. shipper's miles
B. Odometer miles from Origin to destination
C. Destination to Destination miles
D. Other ( )

 

If you are calculating your cost for OTR long haul, you need to use the actual miles you put on the truck. It's basic accounting at its finest. Gone over this with an accountant who knows his biz and this biz. IF you are starting out, it's not to difficult to use past records as a company driver to get an estimate of your ANTICIPATED miles for getting some accurate estimates put together. Once you are actually rolling, you use your actual miles to calculate your costs of operation. Not that darn difficult, and it works quite well for most of the O/O's I know. And they are still making a profit, still in business, and still doing just fine.

Now if you are going to just do short hop stuff of less than 400 or so miles from you home base, you may need to use something different, but since I wouldn't be interested in anything like that, I don't really care about the method.

 

Ok gang, I'm in need of some advice and this could be a lengthy post, but id appreciate some input. I'm considering obtaining my own authority and going out on my own.

Let me give you a little background on myself. I've been a driver for 13 years, of which 10 have been spent hauling gas. 7 years ago I became a part-time trucker and a professional fireman. My schedule is 24 on and 48 off. Now, understand this, not all 24 hrs are "working" hours. I'm now paid to "be ready to work" and necessarily by "how much" I accomplish. My day starts at 7 am and ends the next morning at 7am. We train, maintain the truck and all equipment, and have station duties as well as community details. Now, I'm assigned to a truck that can make 15 runs in a tour, and then go 3 tours and not turn a wheel! Most days I can lay down at 9 pm and sleep all night long. The o/o I'm with now realizes that on some nights I may sleep all night, or I may be up fighting fire all night and not available to haul gas on my first day off.

So here's what I'm wondering. I've been researching buying my own truck and flatbed and going out on my own pulling general freight from a loadboard service on my days off from the FD. I can get a solid truck and trailer for about 40k. Insurance will run about $7500 a year, $1200 a year for consulting firm and obviously fuel will be my largest expense. I'll have about 4 months worth of cash set back for startup. I've been following these boards now for a year and have been able to find freight leaving within 100 miles everyday that I wanted it. What I'm thinking is not the long haul but rather the real short haul. The loads that run between 50 and 200 miles to unload. Then reload and return. I've been looking at 700-1000 a day gross(as long as everything goes ok). I happen to be in a great freight lane that has year round work. Plus how many of you out there like to fool with short haul?

Now, I don't have to worry about health insurance, or making my mortgage or any other personal bills with the "company money", because they're all handled with FD income, so all capital will go back into the business. Now I realize the industry is a difficult one. I have no hopes or aspirations of getting rich or famous I just want to try and set myself up slowly for my retirement and take a chance at having the oppertunity to have both careers in my life be successful. I'm 33 and can't retire from the fire service for at least 9 years. I've been making somebody else's truck payments for 13 years. Why can't I make my own now? I'm in a unique situation in which I get to have two careers I love. Could this work? Why or why not?


I truely appreciate any and all honest answers and criticisms. I spend 24 out of 72 hrs with the toughest sob's you'll ever meet, so no hard feelings. Thank you for your time...
Fireball