I am a local driver and get paid hourly, but the company I work for (Jacobson Transportation) pays their owner/operators $0.93 per mile.

Lets say (for the sake of argument) that the truck payment is $1300 a month, insurance is $12,000 a year (worst case senario), fuel is $4 a gallon (a very conservative number), your getting 6 mpg, and your running 12,000 miles a month...

Your gross income would be $11,160.

Fuel would run you about $8000, truck payment is $1300, insurance is $1000. Just those three expenses run you $10,300. Yes I know there are a lot more, but thets just focus on those three.

That leaves $860 a month gross.

My question is... thousands of people do this everyday... figuring in taxes, paying yourself, running costs, depreciation, and a dozen other things... how in the HELL do they make it???

I am very interested in purchasing a truck, but my calculator tells me that would be a major mistake... what am I missing? (Smart-asses need not reply)

 

Your forgetting the FSC..load / unload pay, plus whatever other accessories they may pay.

I still wouldn't run for that low a rate.

 

That .93cpm, would not include the Fuel Surcharge.

 

At .93 you wouldn't need to worry about taxes either. It would be easy for an accountant to squash 860 per month. I think 12k for ins. is high. As a rookie I'm being quoted 6-7k.

 

I pay 760/mo for insurance on my truck, workman's comp, and pl/pd. I'd expect an avg freight hauler to be less.

But, the OP has the right idea with where he's going with this...

 

Rigidsporty, the only way some of these owner operators make it is their fuel surcharge. Some carriers pass the entire fsc through to the owner operators, others do not. Some carriers also offer some sort of fuel discount program. Frankly, I don't see how most of them make it, either. I have looked at the numbers for years and most owner operators who work for mileage pay would make as much and often more if they drove a company truck. Mileage rates for owner operators have not changed, to any degree, in decades. If I were planning on buying a truck and leasing it to a carrier, I would look for one who pays percentage of the line haul rate. It is more equitable. You may or may not do better, depending on your business skills in managing your business. But the opportunity is there to do better. Running percentage is a bit more challenging than mileage. With percentage you have the opportunity to seek out the better paying loads and make more money. With mileage, it really doesn't make any difference where you run since the rate is the same.

 

your not missing as much as a lot of other drivers I have run into over the years. why ? because your looking, noticing & asking questions. as I did 10 years ago when I gotinto trucking as a o/o. everything was different then. however the basic principles still apply.

many truckers are like so many in home foreclosure... champagne taste on a beer budget, had to have a house, car & furnishing they could not afford because they saw so many other people doing it. they either felt insecure or let their common sense go. cause when it's all over, most all will tell you.. they knew better. when I first started, I bought an ole walmart cabover for $15,000 cash. it had 400,000 miles on it. I ran with 14 other o/o's. they all ridiculed me for not buying a hood.

although hoods of the same year with 600,000 miles were going for more than twice the price I paid for mine. but that was when fuel was low & freight was abundandt. it was not long after that that things started to change. by 2000-2001 I have watched all the regulars with the high priced chrome lose it all.

when things were going well, they though it would never end & lots of them bought things & financed things they could afford only if everything stayed the same. witch by history's lesson... never do.
I operated as if that day would be my last load & last paycheck ( so to speak)there are still great opportunities in trucking. you have to have a good plan & stick to it. do not reward yourself with high priced chrome out of insecurity. reward yourself with peace of mind, with is priceless.

figure out how & where you want to run before you decide what you want to buy. dont want to go over the road & be gone for3-6 weeks at a time?? then dont get a high priced truck that requires you to have to do so. when I pulled up to unload , I would make the same for that load as the guy in front of me with the high truck payment. though I did not have the bragging rights of a real nice looking truck. I had peace of mind. the nice trucks are fine, but just like a first car or even a first home .. it is or should be something you can afford & then trade up later on when your experiece & financial level increases.


my refernce here is refering to my particulair experience witch was & is in northern al area & pulling flatbed.

find what can & will work for you in trucing.. wish you the best of luck.

 

I dont have a clue what insurance will run, I just read on here once someone saying they were quoted that, so thats the number I used.

Jacobson says they pay 100% surcharge, but they dont say how much. What is the average?

 

It doesn't matter where you live, heavyhaulerss, it is sound advise. Don't go for the expensive truck. Start with something you can afford. It is a great feeling to have a paid off truck or one with a small payment. It helps you concentrate on making money and running your business rather than having to worry about making those big truck payments.

 

I am not sure about the type ins you would need or want. I can tell you I am leased to a co, that pays ins. I just pay bobtail ins. it has been this way ever since ive been in trucking. my ins on truck & trailer including bobtail is 73.00 a month thru groh ins in dover ohio. thats another plus about having a less expensive truck. less cost for ins. same principle as a car in that reguard.