Whats of the point of being an owner-operator for .90 a mile.

I've had weeks that my fuel cost was more than a $1.00 per mile.

 

.90 cents per mile plus FSC may work for someone leased to a mega dry van carrier that picks up some of the back office costs, but for those of us that have to cover everything ourselves the operating costs can be well over $2.00 per mile. I operate a car hauler, and like Stan my costs for labor and fuel are more than $1 per mile. When you figure in everything else my numbers for last year (2014) were as follows:

Total Hub Miles 82,215
Gross Revenue $242,870.00
Net Profit $37,852.15 (this is after my salary and all labor/wage costs)

So as you can see my gross revenue per mile, all miles not just dispatched miles is $2.95 and my net profit is $0.46 per mile making my operating cost $2.49 a mile. Keep in mind, I pay myself a $1,000 a week salary plus fully fund my medical through the company and these numbers include as operating cost my maintenance and equipment replacement funds of 10% of gross each week. My actual maintenance costs went down last year as I bought a brand new trailer, the old one was starting to need too much fabrication work to keep it going but I did spend $7,000 on engine work on my tractor and even with that expenditure my total cost was down. Salary, fuel, and tolls are my biggest costs, I spend about $1,200 a week in fuel and another almost $200 in tolls alone. Another way I look at it is revenue per vehicle (since I am a car hauler). I moved 2671 cars at a gross of $90.93 per car, now some car haulers will say I am moving too cheap, but my average length of haul is only 95 miles and I run a full load one way and at least a partial the other way so it works for me.

I don't think I am doing bad for being home every night and in a hotel when I am not home, running almost all local (I only have NY, NJ, and PA on my IRP). I could be home nightly but chose to stay in a hotel sometimes because it is cheaper than deadheading 130 miles (65 from Newburgh auction to home and then back to get on the Thruway towards Albany). If I unload in Newburgh and have to go back upstate NY the next day, might as well stay in Newburgh and save the fuel, wear, and most importantly log book time.

Note, in interest of full disclosure and honest, accurate discussion, my operating numbers are for only the truck I operate, I am associated with a company that operates three other trucks with company drivers in them (I provide the drivers through a labor leasing agreement) and we share some costs such as shop, storage lot, parking, back office, marketing, accounting and such. This arrangement does allow me to keep some of my operating costs below average for other single truck operators with their own authority but not as low as a single truck operator leased to a mega carrier. I have broken out my share of those expenses and included them in my operating costs for an accurate accounting of my costs which allows me to decide from year to year if this is worth my time. Also, I have not included any shared expenses, revenue or other benefits garnered from my other company (training, labor leasing, and compliance consultants) as that would distort my numbers and make them invalid for comparison to other owner operators.

For now I think I am going to keep on keeping on, it works for me and I still enjoy operating my car hauler and driving everyday more than I enjoy my time in the office. Stay Safe.

Brian

 

I was fairly certain most days that when I set my company up, I checked the box that said For Profit, though many days I wondered.

 

I think you need to get the calculator out and try again. Even a leased on operator with an 8mpg truck and pays themselves bottom feeder wages and runs 150,000 miles a year wont be that if they included ALL costs to operate said truck. I have a feeling there are quite a few independent O/O with a >2.00 cost per mile. Lets see a breakdown of your numbers there, rodknocker.

 

My favorites are the one's who claim that $1.20 or some other ridiculous cheap number that is not anywhere close to covering a one truck show's real costs will tell you that means they can run at a $1.30 and profit. As long as their wife has a real job with bennies they can hobby truck all they want right?

 

Hey easy my wife has a good job with bennies. Lol

 

Coal, that reminds me about somebody... LOL

 

A lot of operators will mask their true costs by shifting expenses either to or from their personal accounting. What I mean is they will either pay for a pickup truck or something with business funds even though it is for personal use or pay business expenses out of their household monies. They also don't treat their operation as a true business and are happy with taking the table scraps that are left and calling that their profit yet they never even paid themselves a decent salary. You need to be able to pay yourself as a driver and an administrator plus make a profit. Don't forget to account for the "free" work you get from your wife or significant other, the time you spend as a mechanic, dispatcher, and so on. These are all costs, even if no money is actually spent because time is money! I run two distinctly separate enterprises so I can very accurately determine my true operating cost for each business which allows me to price myself competitively but still make a decent profit, my target being no less that 15% which I accomplished in auto transport this year but did not in my other business.

 

well I get ###### fuel economy because I drive fast and sometimes I haul heavy loads, I was offered a 306 mile round trip (from port of Newark to springfield,ma) overweight live unload for $650 I was laughing so hard at this poor guy face so I took a pencil and a piece of paper and broke it down this way.... 120 for tolls, 306/5=60(gallons of fuel burned) x 3( average fuel price)= 180, lets say another 50 for the maintenance fund and dealing with the ports that comes to a whopping 300 dollars in profit for dealing with i95 in ny and ct, all he said "i can give it to somebody else and they will do it gladly" so I said "give it to them i'm a businessman I got a car payment and a house mortgage and a family to feed and that's slave pay". I wont haul a load unless my profit is 1.50 or better

 

Well, y'all know how it is,

for every 10 o/O's that works smarter and not harder, there are 50 "o/O's" that will run harder and not smarter. Folks ALLWAYS say "if it don't make $ it don't make sense" and I reverse that and say the same by looking at all the work, time and money I'm putting into a move and if IT DOESNT MAKE SENSE it doesn't make $ lol.

and running for .90 a mi doesn't make sense especially when the typical .90 a mile position is a dispatch system, one that doesn't ever operate in the owners complete best interest. They don't care about re load times, re load locations, the weight of these loads, the delivery and pick up times, personal time, SLEEP/REST, and or common sense.

Had a da family member tell me to come over to dart and I had to laugh and I said naw, can't come over there, they don't pay enough for me LOL. He then looked surprised

like i said, for every 10 smart owners there are 50 "mile pushing over working common sense lacking non logistical sense making company driver mentality having vessels for hire"