I've been surfing this board for a few months now, and would like to jump in and post something for consideration. I'll keep it as short as I can, I'm thinking about going for it with my own authority (2 of us together actually) and need to purchase a truck. Here are my rough figures or business plan if you want to call it. I think if you don't know what it's costing you to operate, you're screwed from the get go, which is why I've laid it out like this. The "Company Investment" is a $ amount that we've agreed to try and put away for future expansion and is totally optional at this point. I understand there will be some deadhead miles, but I'm hoping the better paying loads will average that loss out.

ASSUMPTIONS:

2500 MILES/WK AVG
FUEL--$2.50/GAL
FUEL ECONOMY--5.5MI/GAL
LINE HAUL RATE--$1.20/MILE

EXPENSE COST PER MILE
TRUCK PAYMENT (743/MTH) 0.074
TRAILER LEASE (300/MTH+MAINT) 0.05
FUEL 0.45
TRUCK MAINTENANCE 0.1
INSURANCE (8000/YR-W/2500 DOWN) 0.04
LOAD BOARDS 0.01
FACTORING(@ 3% OF INVOICE) 0.036
INTERNET 0.01
TOLLS 0.016
FUEL TAX 0.002
HIGHWAY USE TAX 0.004
BASE PLATE 0.012
COMPANY INVESTMENT (5% OF GROSS) 0.06

OPERATING COST PER MILE 0.864
LINE HAUL RATE 1.2

PROFIT PER MILE 0.336

WEEKLY GROSS 840


Three Questions:

Do these numbers look reasonable?

Have I missed anything?

Alot of guys I talk to are scared of the VED12 & the Cummins ISX engines. WHY? The truck I'm looking at has the ISX.

I know freight is down right now, and I feel I've been conservative on my estimates, but would like some opinions from others if I may ask. I've been a company driver for about 2years, but this ain't the same animal.............and truthfully its less per week than I'm making now, but I pull automotive and my route is going away in October with no new prospects from my current company.......

Any and all opinions are welcome for consideration as to aid me when I make my final decision.


Warmest regards to All,

Tadpolly66

 

I think you're operating expenses are pretty reasonable, I think you will find it hard to avg. 2,500 miles a week though at this time. Also from what most are saying I'm not too sure you will get to $1.20 a mile off the load boards pulling a van on an avg.

I would rather lease to a company with established customers, but that is just my personal preference.

 

This is the next scenario I will be looking at, I think you may(and I stress may) approach $1.20/mile with some companies that pass the surcharge to you, plus your expenses are a little less, as well as the possibility of more miles. This was suggested by one of my close friends as a way to kinda " get my feet wet" on the O/O side, especially in this economy.

TY for the reply.

Stay tuned......

 

It would have to be a place where I was guranteed some great hometime (nightly) for me to lease on for $1.20. I did $1.93 and $1.88 for all miles traveled the last 2 years. I pull chemical tanker, and that is something you should consider to get into something specialized either over dimensional, step deck ltl, or something that not everyone and there Grandmother isn't doing (dry vans).

 

Your fuel costs seem a bit low. As a single truck O/O, you're not going to have the luxury of major fuel discounts. I'm currently seeing cash prices hovering around the $2.70 per gallon mark, and rising. You also have no employee wages in your calculations, nor are you factoring in any quarterly tax payments. So your "profit" really isn't.

 

I like the way that you have broken things down. There are a few items which I think are off. Your insurance should be $0.08/mile rather than $0.04 if your premium is $8,000. You may check on your base plate and permits costs. I pay $1,600/year just for the base plate. You will also pay $39/yr for UCR, $550/yr for 2290 (Heavy Highway Use Tax), and there are a couple of other states such as New York or New Mexico where you need to pay an annual tax or buy their permit. I would count on spending between $1,800-2,000 for base plates, permits, UCR, etc., Your factoring fee is probably in range if you plan on doing recourse factoring. In fact, you may be a bit high for recourse. However, in doing recourse factoring you need to consider that you may have some charge offs during the year. If you go with a non recourse factor then you could be looking at somewhere between 5-8%. I would not pay more than 5%. Some people may pay early for a cash discount so that you won't need to worry about factors for those accounts. Lastly, you need to remember to pay yourself if you are the driver. There should be enough profit to pay yourself as you would a driver and still have a profit. In today's business climate, the main thing you need to do is survive. That means running for a profit. One thing that I particularly like in your figures is the low equipment payment. I would check on the trailer lease or rental. Trailers usually rent for a little higher rate than you are noting. If you have a company who will rent you a trailer for what you noted then that is great.

 

Unless you've got the truck picked out already, I think your truck payment might be a little low compared to an average. But then again, it depends on the equipment and financing.

The other numbers look good, but to come out on top with 33cpm and change, it's less than a lot of company drivers make.

At least you're realistic in your projections.

 

-2500 miles week in and week out seems high. It's tough to dispatch yourself and run lotsa miles and get a good per mile rate. You can have 1 or two but not all 3.
-5.5 mpg in the summer maybe. Might want to budget less in the winter if you're running up north.
-Got a bunk heater and A/C? Idling can cost you ~$25 a day.
-Don't buy a 2008 ISX. Trust me on that.
-$1.20 seems high.
-You really need to factor in some DH....at least 10% if it's a van and more of it's something else.
-You really need to factor in some OOR miles. Your actual mileage will be ~15% higher than your "paid" miles.
-What about health insurance? If you get hurt you lose your equipment.
-You going to eat in the truck every meal? Could cost $20/day minimum to eat.

 

GMAN, I gotta say, there isn't a whole lot in this world I would back down from but a brain fight with you over something in the trucking industry wouldn't interest me in the least. I know you have been in this buisness a whole lot longer than me but your reasonings and opinions blow me out of the water sometimes. I think it's pretty cool the number of people you have helped out here. Just my .02 worth.

 

You might want to make a few phone calls for insurance mine was cheaper than that for first year authority. You also might want to factor in a few overweight tickets, something I'm learning first hand about. If you're going to run the north east a lot you'll need more toll money, MD just raised all the tolls, Harbor tunnel just went from $8 to $12.

I don't want to sound harsh but I wouldn't touch those numbers with a ten foot pole. I also wouldn't try to start off just running load boards, I've read on another board where people are seeing .73 a mile and someone posted .20 a mile.

Try to network a little and make a connection with a reputable broker that will work with you, they are out there. It will take some of the pressure off of you starting out.