Cargo Van Advice

djsell

Seasoned Expediter
I have a question for the "seasoned" cargo van drivers. I am thinking of purchasing a used cargo van, I have a chance to bid on approx. 600 miles a night/5 nights a week. I'm trying to decide what rate/mile to use for the bid process. I know I will have to pay both employee and employer share of social security and medicare (15.3%), federal, state and local taxes, insurance on vehicle, fuel, tolls and van payment. Also, can I use fuel surcharge and if so, how does that work? It seems like the amount I would pay for social security is very high (assuming that is on the gross $$ amount before fuel, etc. deductions). I don't want to go in too high, but yet I want to be able to live. What is a reasonable $$ to use? Anyone have any tips to share with me?

Thanks and everyone be careful!!!
 

x06col

Veteran Expediter
Charter Member
Retired Expediter
US Army
Any bidding process is simply costs (including a swag for changing costs), plus whatever the human elements feel they need.

Jes wonder'in if you've decided whom is gonna run that dedicated mission when the driver don't show up?? Because they won't show up, sooner than later.
 

OntarioVanMan

Retired Expediter
Owner/Operator
Any bidding process is simply costs (including a swag for changing costs), plus whatever the human elements feel they need.

Jes wonder'in if you've decided whom is gonna run that dedicated mission when the driver don't show up?? Because they won't show up, sooner than later.

Funny you say that Col...when I used to manage some trucks When I was hiring, I went out and looked at their "means of transportation" If it was expensive...I'd hire that guy......I mean all things being equal...*LOL*
 

blizzard2014

Veteran Expediter
Driver
Djsell, there are a few things that need clarifying. If you hire a driver for you van, you do not need to pay them social security taxes etc. You will be hiring them as a nonemployee which means that whatever you pay them throughout the corse of a year wold be placed on a 1099, and then the driver would be responsible for filing his own taxes.

Also, when you bid on that rout you need to determine what your "break even" point is. Your break even point will depend on how your fuel mileage is, your insirance costs, driver pay, and the daily price of fuel...which is a variable expense. Once you get these numbers worked out you can figure out how much you need to charge the customer per mile in order to turn a reasonable profit.

Remember you are giving the customer a straight bid. That means that the fuel surcharge should be a part of your bid. You don't necessarily have to list the fuel surchargs as a separate expense. Once you have this down, you take your rate per mile and times it by the amount of paid miles the rout will be paying and you generate your total revenue and submit that as your bid for the route. Alas, do not forget to take into cosideration the deadhead miles and maintenance as well as expenses for costly breakdowns; because you will still have to figure out a way to get the freight to its destination even if your van is in the shop.

Now, you are going to have trouble generating a competitive bid because you only have one vehicle on the road. You do not have enough vehicles on the road making you money to evenly spread your fixed operating expenses which will make it harder for you to bid lower to get the contract. Once again, it mostly depends on what type of retuen on your investment you are trying to get.

You also have to take into consideration what the great OVM said about seeking good hard working drivers, because you will have to fill that drivers seat if anything happens to one of them. You can't be late or miss a day of work when you are running a dedicated route. Again, these are just some things to think about here.

Also, you need to get back to us with the type of van "diesel gasoline" you will be driving and whether or not you will pay cash for it and what your reasonable expectations of income potential is. I hope this helps you my friend.
 
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miguy1957

Expert Expediter
I have a question for the "seasoned" cargo van drivers. I am thinking of purchasing a used cargo van, I have a chance to bid on approx. 600 miles a night/5 nights a week. I'm trying to decide what rate/mile to use for the bid process. I know I will have to pay both employee and employer share of social security and medicare (15.3%), federal, state and local taxes, insurance on vehicle, fuel, tolls and van payment. Also, can I use fuel surcharge and if so, how does that work? It seems like the amount I would pay for social security is very high (assuming that is on the gross $$ amount before fuel, etc. deductions). I don't want to go in too high, but yet I want to be able to live. What is a reasonable $$ to use? Anyone have any tips to share with me?

Thanks and everyone be careful!!!



I guess my question is how is 1 driver in 1 van going to run 600 mi out, (aprox 12hrs) Turn around and get back to run the next run 5 days a week without sleeping?? Am I missing something???
________
DanitaHot cam
 
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fastman_1

Veteran Expediter
Owner/Operator
I would hope its 600 mile round trip, and you can't charge enough to hire a driver and make money too. I tried it once, company had 3 routes and I bid on 2 got them, only thing that saved me was the company lost the contract, and we all got the ax. I sold 1 van and worked the other.
 

Crazynuff

Veteran Expediter
Djsell, there are a few things that need clarifying. If you hire a driver for you van, you do not need to pay them social security taxes etc. You will be hiring them as a nonemployee which means that whatever you pay them throughout the corse of a year wold be placed on a 1099, and then the driver would be responsible for filing his own taxes. .

I really doubt IRS would accept classifying a driver on a dedicated route a nonemployee .
 
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