Two years seems to be the magic number with these insurance companies. I am currently talking with one insurance company who requires 3 years experience. That isn't a problem with my current drivers or myself. Some have dropped their rates but I have been told that they plan on raising them in the 4th quarter of this year. They planned to do it last quarter or the first quarter of this year but didn't due to the economy. I suppose someone forgot to tell my insurance company.

 

I was paying Progressive $900 a month for liability with a 500 mile radius of Dallas. It was just impossible. I was averaging about $2500-$3000 after fuel per week, but when the fuel went over $4, and the rates went to the $1.25 range, I leased on. I second guessed myself a few times, but it looks as though the rates didn't come back up.

I'm actually making a little less now, but I don't have to cash flow anything or chase any money. I actually did better when the fuel was around $4.80, although I couldn't idle my truck much. Now the fuel is such a smaller part, compared to the mileage rate, idling is no big deal.

The most money I've made, in the two years I've been doing this, is the money I've saved by listening to you guys. I know things could have gone much worse, and I'm thankful to have survived. At one point I thought about throwing in the towel, but after all I'd gone through to get where I am, I just couldn't.

Despite the bad economy, I can see light at the end of the tunnel.

slacker

 

$900/month is a high insurance premium, slacker. The high cost of insurance coupled with the cheap freight rates have driven many independents to lease their trucks on to another carrier. I don't know if one is really better than the other right now. You may not be much better off leasing other than saving the cost of insurance. That in itself can put more money in your pocket. With the down payment you paid you are probably saving more than $10,000/year by leasing on to another carrier.

 

So with the $1/ mile back haul your average per loaded mile on the rounder is $1.62. Deduct a little for dead head....$1.45 for all miles.

In the OP you said 3,000 miles a week I think. So you're paid on 1,500 loaded miles right? 1,500 x $2.25 = $3,375 weekly revenue? 3,000 all miles x $1/mile cost = $375 a week pre tax. Looks like you would need a back haul to make it work unless I'm missing something.

 

Rank, My weekly revenue would by 1,500 X 2.25 plus 1,500 X 1.00 (minimum) = $4875, minus fuel (3000/ 6.75= 444 X 2.00 = $1000 worst case) and fixed expenses. That would leave $3875 after fuel. I missed something on your $1 mile cost. My costs are not that high yet, although I haven't bought a California legal reefer either. Please explain. You are correct, I need a backhaul regarless.

Please elaborate further.

What I was hoping for was 1,500 loaded at 2.25, and 1,500 loaded at 1.00 minimum, but I still don't think it is a better deal than my lease, given the other expenses, ie insurance, reefer fuel, higher fuel costs, liability, etc. etc.

My truck gets about 6.75 heavy, and 8.75 empty, but even taking that into consideration, I 'm going to wait until the rates come up so I can get something decent both ways.

Thanks for the input.

slacker

 

2.25 loaded well, a buck a mile loaded on the way back, and no calculation for deadhead between the loads is what I missed. If you can find a better backhaul, you might be doing pretty good. My fuel costs going 75mpg in a T600 with 3.70's is less than 45cpm.

Now might not be the perfect time, but its the recipe for something good. $2.25 loaded EVEN with fuel at $1/mi (Summer '08') you were still making money. That doesn't mean I justify running for $1.00 a mile.

Do some research on backhauls. Maybe drop and hook with a 2nd trailer and a 2nd shipper under your authority? I think they key piece to your puzzle is out there.

 

I would check around on insurance. You should be able to find a more competitive rate than you were paying, especially since you now have 2 years experience. If you can get a lower rate on insurance and can make at least as much running your authority as leasing (after paying insurance costs) then you may be able to make it work. At least the opportunity is there. From a timing standpoint this would be a good time with produce season just a few weeks away. I would sit down and look at the numbers. Be honest with yourself. If you go out on your own you will also need to consider the cost of buying a trailer and if you pull a reefer there will also be additional fuel expense.

 

You gotta strike when the Irons hot,there have been tricklings here and there of freight opening,if it were me I would do it whats the worst that could happen?:thumbsup:

 

$900 per month with 500 mile radius insurance -- ouch! I didn't realize Progressive was that high. I guess that was before you had the experience you have now?

For what my opinion's worth (which may not be much), if you can get your insurance cost down considerably, I'd be inclined to take the deal.

I've seen it posted on this board many times that the insurance companies base their rates on the amount of time you've had your CDL rather than actual work experience. Does anyone know if it's that's true? Do they not ask about driving experience, just the date you received your CDL? Is that true for Progressive?

 

You are exactly correct, it's time on your CDL not necessarily miles or experience. I guess they have no easy way of measuring the latter. My rates dropped from $14000 to $8000 just by the passing of the 2 year mark.

The current insurance rate I've been quoted is $8000 for 48 states, which includes bobtail, physical damage, and cargo for refrigerated.

I don't know if you guys have paid attention to reefer prices right now, but with this June 09 enforcement date in Cali, the price of 04 and up reefers has increased considerably.

We'll see what spring and summer does for the rates and the industry itself. I figure this stimulus money has got to start leaking out into the trucking industry at some point.

Thanks for the great advice,

slacker