Costs as a Percentage of Revenues

[pjjjjj]

Does anyone happen to know these numbers for themselves?
For example, 'for me, insurance works out to ?% of gross revenue over the course of a year', or 'fuel works out to ?%' or.. whatever.
Are there 'industry averages' for these costs in relation to revenue?
Before we got into this, we were led to believe that truck payment, fuel, and insurance would/should be about 40% of gross revenues (for a solo).
Of course, the higher price of fuel would skew those numbers.
Just wondering if there is a yardstick anywhere, with which to measure one's own numbers, to see how one is doing in relation to industry averages.
For example, in the food service industry, an owner has a general idea of how much his foodcosts should be in relation to his sales, and if his own numbers are way off, he knows some finetuning is needed; if his labour is way off, he knows he can cut back on staff, etc.
Is there anything like that for this industry?

 

[terryandrene]

I would think that the variences of equipment in expediting is so great, and there would be so many statistical outliars, that an average of the whole would be of little value to an individual.

For example, there are a large number of people that are satisfied with a $50,000 used truck with a small sleeper and there are many with $200,000+ trucks with all the bells and whistles. Each of these folks pay the same for fuel, so fuel CPM varies greatly. So many folks idle a lot and others have APU's and idle little. Insurance percentages would likely be comparable regardless of premium cost.

Revenues vary considerably. Some are percentage based expediters and others are fixed rate. Some deadhead disproportionate to others. Some use backhaul services, most do not. Some occasionally operate part exclusive use expedte and other occasionaly haul multiple LTL loads. I could go on but the point is made.

I think that you'd be better off keeping your own statistics, weekly, monthly quarterly or from year to year. If you keep tweaking your own mode of operation, to get the best mileage you can, get the best insurance you can, perhaps even changing your deductables, you could improve your own percentages.

 

[greg334]

I never thought of it as a percentage of gross because of the variable of dh miles plays into the equation. I can see a breakdown after the year end.

I know my operating cost, which is based on all miles on a monthly average which I use to determine profitability.

 

[pjjjjj]

I would think that the variences of equipment in expediting is so great, and there would be so many statistical outliars, that an average of the whole would be of little value to an individual.

Yes I hear ya! I was thinking with fuel and insurance at least, the numbers might be more of a number to be used as a yardstick.. the truck payment percentage would be useless information, as well as repairs.. one might have a high truck payment and no repairs, and one might have no payment and high repairs.
I spent the weekend entering all the stuff into my accounting prog, not quite finished.. but I was actually surprised at how close the fuel percentage of revenue was for each month. And that got me wondering if there were yardstick numbers available somewhere, for *everything*.
If there were such numbers available somewhere, as a general guideline, even though the variables can be great depending on circumstances, it would be really helpful for newbies and those thinking of entering the industry and wondering what their potential net income could be based on the revenues they're being told to expect.
For example, we were led to believe that generally, i)truck payment; ii)fuel; and iii)insurance; would cost about 40% of gross revenue. Those numbers of course would be skewed by the increase in fuel, and as I understand it, there is a big variation in what carriers charge for insurance, depending on their fleet rates, and a person's own driving history, and of course, the truck payment is a useless piece of information, like you said.
I was just thinking/hoping that if there were such numbers available somewhere, based on say, profitable expediters, one would have something to measure up to, for better profitability.

But.. no such luck, huh?

 

[greg334]

You know that you can take the OOIDA spreadsheet and modify it to show percentages. It would be really easy to modify it for your purpose.

 

[ATeam]

American Truck Business Services offers their clients industry comparisons that could help answer the questions you ask, IF you were an owner-operator running a big rig of some sort. They create industry benchmarks from their database. Their information comes from the thousands of owner-operators they serve.

But note the big IF above. Expediting is a tiny segment of the larger trucking industry, and while ATBS serves some expediters, I don't believe the number is large enough to provide a meaningful statistical base from which comparisons can be made.

Terry's answer is the right answer.

That said, seeking the same answers you seek, I would love nothing better than to meet you (or any other expediter that keeps a spreadsheet) on the road some day, sit down with our spreadsheets and go over them line by line; taking a full afternoon to do so. I believe such an exercise would give both of us new ways to think about old topics and gain insights from one another.

 

[Paul56]

That said, seeking the same answers you seek, I would love nothing better than to meet you (or any other expediter that keeps a spreadsheet) on the road some day, sit down with our spreadsheets and go over them line by line; taking a full afternoon to do so. I believe such an exercise would give both of us new ways to think about old topics and gain insights from one another.

Just do what I did... marry an accountant who grew up with the trucking business.

 

[pjjjjj]

That said, seeking the same answers you seek, I would love nothing better than to meet you (or any other expediter that keeps a spreadsheet) on the road some day, sit down with our spreadsheets and go over them line by line; taking a full afternoon to do so. I believe such an exercise would give both of us new ways to think about old topics and gain insights from one another.

Sounds great! Unfortunately I'm not able to become a 'team' yet with husb, but I'm sure he'd love to meet you sometime if you're ever in the same area! Thanks for the offer.. tonite he is in Ontario.. let us know if you're around MI, OH area, he seems to go there quite a bit.

 

[nightcreacher]

truck accounting isnt rocket science,you have your fixed costs,your variable costs and what you pay yourself as a driver,or team..Bottom line,is there a profit or not?.To help your bottom line,you can modify your expenses.If that doesnt help,then the only other thing left is change your income.Less deadhead,more loaded miles,less time off,but as in any business,your trying to have a profit equal to 1/3rd of your investment.If your able to obtain this,then your business will flourish.Now lets talk in a different area,Everyone needs a tax shelter,cause no one wants to pay taxes.many professionl people have outside businesses,such as horse farms, that operate on paper as a loss,thats there tax shelter.A hobby that they can get the government to pay for by paying less taxes.As a truck driver working for a company,you have very little right offs,so you have 2 choices,you can do as the professional man,meaning Doctor,or Lawyer,that make a lot more money than you,so this would not be a great area to get into,or as a driver you can buy a truck,the truck is not suppose to show a profit,its your tax shelter,it helps youe keep more of your wages as your not paying those taxes you hate so much.But remember,you must show a profit once every 5 years,doesnt have to be much of a profit,just a profit.If you were a teamster,and you had your truck leased to a teamster company,you would be on a 2 check system,your drivers check as a union driver,and the truck check,that truck check will always be at a loss on paper,if you have watched your P's and Q's,Clear as mud,it does work,unless your truck profit gets so high,that you cant show a loss,then your tax structure is going to be high

 

[greg334]

Steve,
I have asked this question before and never got a straight answer.

What can an accountant who specializes in Trucks do specifically in comparison to one who does not?

 

[nightcreacher]

there are many trucking laws that the average account wont take time to look at.There are write offs you can imagine,sometime it scares me t o sign the bottom line,but its all good.Ive been audited,and passed everytime,twice,of course accountant went with me. Another way of putting this,you dont go to a medical doctor for a toothe ache