Steel Hauling pay for O/O

I just do not see how when you take what a truck ( tractor & trailer ) grosses a year, not to include driver, and divide that by the total number of miles driven during that same time, it comes out to a dollar a mile, or less.
I have a paid for unit, NO dead-heading ( I load at shippers and keep truck there ), perfect driving record for insurance, buy tires at good prices, have major work done by shop mechanic after hours at reaonable rates,no tolls, get 6.6 mpg, just run a tight ship in all aspects. Have for 40 years now.

I can not operate at a buck a mile operating costs. It takes more than that to turn my wheels.My gross receipts per hub mile run around $2.36.

 

Short haul rates out of the Chicago/Northern IN are not what the should be. Lots of people want to do exactly what you are thinking...run 100-200 mile loads and come back empty. It keeps the rates on these loads artificially low. Rates also stay low to MI, OH, IN and possibly WI because people can grab a reload back to the Chicago CZ. On short loads, forget about rates per mile. You need to focus on minimum charges, which should be in the vicinity of $650 + FSC for this area. That way you are creating a fair amount of daily revenue if you are only able to get one load per day.

 

I don't get this whole steel hauling fantasy some drivers have. Machinery, equipment, retail goods, and raw materials can and do pay better than steel in the lanes mentioned. When they don't, you can always haul steel and put up with "good ol' boy" bull and long waits and the same indifference door slammers put up with at shippers and receivers.

 

How do you break even if driver pay is zero? I don't get the logic of working for free equals a break even prospect. Only truck drivers think this way. If someone has a break even of $1.20 a mile and they want a 20% margin then $1.20 / .80 = $1.50 so that person needs to average $1.50 for every mile turned to get a 20% return. Remember that is what they have to average NOT a rate they should accept. This example is being generous cause I don't care how much you save on tires and fuel there is no one truck show out there that costs $1.25 or $1.50 to roll, not even close. Not counting every conceivable cost which includes supporting your household. Unless you work for free all the time. Razor thin margins work great when you have thousands of trucks economy of scale. When you are a one truck wonder running for cost or worse (as many of them are) is either slow and painful or quick poorhouse.

 

I agree with Coal's way of thinking. I would start by adding all operating costs. This would include fuel, tires, depreciation (cost of ownership), maintenance, accounting, possibly marketing, bad debt, etc...all costs involved with running your business. Just because your truck is paid off does not mean you should take this out of your cost structure. You should be setting this aside for replacement. Let's pretend this number comes out to 1.25/mi. Then I would add drivers wages. This could be a mileage rate, percentage, or salary, whatever makes sense to you. Let's use .50/mi. Now you should add in some sort of return for your business. No reason to tie up your capital if you are not making a return. Lets use 10%. This would put you somewhere in the 1.95 range, which you would need on all miles. Multiply this by 1.1 if you run empty 10% of the time and you are at 2.15/mi. This is what you would need per loaded mile to be profitable.

I don't normally price based on costs, but if you do...I would use something like this.

 

you probably need to read the whole thread first,im talking about cost per mile before driver wage and before profit.a 7mpg truck @$4 a gallon will cost 57cpm,15cpm maintenance,15cpm truck note and 13cpm to cover other expenses.if you run 125k miles a year that adds up to $18750 for maintenance.$18750 for the truck and $16250 for other expenses.thats exactly a dollar per mile cost to run the truck and i beleive those numbers are very reasonable for today trucking.if you running completly independent maybe another 15 to 20cpm to cover the trailer and the higher insurance cost.

 

You need to comprehend my post. I read the thread from when it first popped. You can't leave driver wages and household expenses out of the true cost to operate a one truck show. And profit either unless it's a hobby.

 

again i agree with you 100%,the reason i left those out is because these costs varie trendously depending on what region of the country you live and operate:a driver who lives in boston pays $1500 a month for rent while another driver who lives in south carolina pays only $700.a driver have 6 mouths to feed the other driver is single.also profit is another variable:you probably need 20% return on your investment and im happy with just 10%.
im not saying u r wrong im just saying your situation doesnt apply to everybody.if an o/o is pulling a company trailer,the company pays his tolls,ifta and permits and plates,give him a nice discount on fuel and parts,pays him for all miles,detention etc than $1.5 a mile doesnt sound too bad.

 

That's my situation I'm single very little expenses and I haul a companies trailer.

 

At BESL our drivers are averaged $3 last week and for the year we are at $2.78 plus the fuel surcharge. However they get paid by the load not mile. So that's based off a breakdown of Revenue VS miles per trip.