Yet another lease question for OO's

I was reading a thread "An indepth look at various leases." about leasing options through a company such as C R England and others. I'm trying to figure out how its even possible to turn a profit. Below is a typpical lease in the thread.

$.90 per mile!! $800.00 per week for the lease!! Even if fuel is 1.25 per gallon and avg 6 miles per gallon, you would just break even running 2500 miles per week!

What am I missing in this eqaution? Where is the money at?

Why are you guys running for free?

This one is Hills Bros.

Type of lease: 4-year lease on new trucks; used trucks also 4 years but with lower payments.
Fuel programs: Comdata cards supplied for Pilots, TCH for Flying J. Hill Bros pays the DoE-listed fuel surcharge (FSC) for all dispatched miles, loaded or empty.
Equipment: Volvo 780s and some International ProStars, though only the Volvos are for lease I believe.
Cost of Lease: My 2007 Volvo is $474 a week to lease. Insurance, HUT and other deductions total approximately $325 a week, for a total of right at $800 averaged over a year. Note that some of the escrows like HUT have odd schedules so during a year it will be more or less each week. There are no mileage penalties or CPM you owe to run miles. There is a 5 CPM maint escrow deduction until that account reaches $5,000 at which time that is suspended.
Pay: Fuel surcharge (FSC) on all dispatched miles, loaded or empty, plus 90 cents per mile for loads of 350 or more miles. 93 CPM for loads between 150 and 349. 110 CPM for shorter loads. 1 CPM yearly longevity pay. 2 CPM quarterly safety/compliance pay. 1 CPM quarterly productivity pay (driving more than a certain number of miles in a quarter).

 

Excellent questions, and ones which I ponder myself.
I dont care if there are fuel discounts etc, .90 a mile is still .90 a mile regardless. I wouldn't run for that when fuel was under $1 a gallon, so why now?
Billy big rigger strikes again, as I honestly think these guys n gals just want to put stickers on the trucks, go a little faster, and claim to be "owner operators". No way they are making more $$ than 90% of the company drivers out there IMHO.

Martin

 

say your base rate is .90 per mile. add in the fuel surcharge, should be around .50 per mile right now so you guys are making basically 1.40 per mile.

Figure up your cost of operating, everyone should know what your expenses cost you per mile. example....Fuel = .60 per mile, truck payment = .30 cents per mile, insurance = .05 cpm, ect ect.

I am willing to bet that if you figure all this up you will see that your cost equals around 1.20 per mile before you make a profit to the truck. That means that your profit, with which you pay yourself is .20 cpm

So driver, tell me....how can you make a living on .20 cpm?

 

Easy in the case of CR England and the like.....they make them trainers .
I spoke to a Swift flatbedder years ago, he was asking me questions about an OD load I had on. He said he had been driving @6months, and was being asked about being a #### trainer already!
Blind leading the blind IMHO.

Martin

 

As with most lease purchase companies, you will profit less than the same company drivers, this is why these compaines push to get anyone to lease, you take most of the risk and make little less than they would have to pay a company driver.
These companies have this figured out, and prey on the ones that want their own truck. And a small percentage of lease drivers do get their trucks paid off but how much less have they made over the 4-5 year period vs. driving a company truck.

 

A really hard working lease operator might earn $0.10-$0.15 cents per mile more than their company counterparts at the same company. But what they don't know is by the end of the year they will have paid $7000-$10000 bare minimum on basic average maintenance, self employment taxes, social security, workman's comp, qualcomm rental etc etc. In the end may earn actually less than their counterpart.

Some of the pros are that they can take hometime as much and often as they can afford, don't have to submit their truck to the nasty company mechanics and can be a little pickier with the loads and lanes.

 

I am in a lease purchase. This week I ran 2547 paid miles and my revenue to the truck was $3800.50

$3800.50 revenue
$602.16. Truck payment
$1222.41 fuel
$35.58 plates and permits
$5.00 transflow
$6.23 bobtail ins
$52.80 phys damage ins
$13.65 Month of November prepass
$178.29 maintenance account .07 per mile
$28.02 occ/acc ins
$2.70 com data fees

After everything taken out I took home $1643.66 which is .645 per mile. The most my company pays company drivers is .45 per mile so what would I be better off doing?

Before anybody says anything about making more because of recruiting you can scratch that now because I have not recruited anybody in 5 months so I am getting no extra pay for that anymore. I get paid the same thing anybody who hires on gets now when they start.

 

Your wrong actually, I nearly doubled my pay by buying my own truck, and I drive for one of the so called, mega-carriers.

And no I don't go fast at all, I actually drive just a little less than 60 mph most if not all the time. And its my choice, my decision how fast I choose to drive. By driving slow, I get great MPG, and with my companies fuel surcharge, it usually covers the total cost of the fuel I purchase.

So yes, even hypothecally .90/loaded mi all goes to me. I then deduct my other expenses out of that, trk pymt mesc stuff, insurance, etc, and the rest is mine, about twice what I made as a company driver for the same company.

So far, I have met a lot of very upbeat and positive people either on a LP or buying a trk and leasing it on to a company. Some don't make it, yes some companies don't pay as well, don't have the freight or miles, or else something else went wrong.

Who is to say?

We're all different out here, for each and every driver, there is a completely different story to tell.

 

Wow, I see a couple of minor differences, my pre-pass is $20/wk but I don't pay for plates/permits, and I don't have a settlement handly to compare the rest. But you may mention how out of your net revenue, your the one responsible to put enough money away to pay your quarterly taxes, and oh yes, my accountant/bookkeeper fee is $15/wk, but as you know, its an deduction as well..

nice post by the way, you really put a lot into it. great job!

 

I pay $13.65 once per month for Prepass this just happened to be the week it came out. I don't use an accounting service through my carrier but they do offer it but I have used the same one out of Denver before and I don't like them. I use an accountant at home that charges me about $400 a year to file for me.