For those of you who are thinking of getting into this business - contemplate this. Do not settle for 60% of load plus fuel surcharge if you are paying for the fuel. To generate enough income for yourself, you should not accept less than 65% plus fuel surcharge and half of the deadhead miles. This formula works whether you are driving a van, a straight truck or a tractor/trailer. For those of you with families to support, this is important. Also, beware of owners who will try to lease a truck to you. Remember that you will lose that down payment and all the other monies you have paid to that owner if you don't make it out here. Also remember that the owner who is leasing the truck to you is probably only paying around 5% interest to finance that truck while he will probably charge you around 12%. No only does he get the 40% load income, he also makes 7% on your payment for the lease. Additionally, a good owner will not charge you for advice. If you are not savvy, watch your fuel and make economically sound decisions, you will probably go under in less than a year. If deadhead miles exceed a 1-4 ratio to paid miles, then the run probably won't be that profitable unless it gets you back to a good run area.
income
- Thread starter Brody
- Start date
We been paying 75% for a few years now. www.fostertrucking.com
To say it's as simple as 65% is better than 60% may not be the case. You may well do better with 60% at a company that charges a higher rate and FSC. It's just not that cut and dry.
dieselphreak2K
Expert Expediter
60% was workin fine for me. It all depends on the company, where the owner lets you run, and how cheap you can live. I take it you were in this situation Brody, and you feel like you got cheated?
rfrogger120
Expert Expediter
what do you mean 1-4 ratio give an example----thank you
Brody, I have to disagree with your post here...apparantly you have had problems driving for an owner. That's apparant. But we have never financed a used truck for less than 12% interest and that's with good credit. Also, the owner is making repairs, has wear and tear costs on the vehicle not including if the driver is the taking care of the vehicle or not. Also on top of that we have registration, insurance and most important...liability. If you don't like driving for someone else my advice for you is save your money because you'll need $15,000 - $25,000 down (with good credit) and then you can find one of those finance deals for 5% interest. Best of luck.
what do you mean 1-4 ratio give an example----thank you
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I believe he is saying not to let your unpaid miles exceed 25 percent. Personally, I think 25 percent is too high.
I am assuming the colonels 75 percent is based on the gross run. It wouldn't be worth it if you were giving 75 percent, plus 100 percent of the fuel surcharge.
I would agree with Highway as there are numerous things that go into what percentage to use.
Older or bare bones trucks without the creature comforts or a generator could be done at that 65 percent. When you start putting generators on and are running trucks over $100,000, the dynamics start to change. Same line of thinking when you start doing TVAL or reefer trucks. Price tag on new ones is starting at $130,000 up to $180,000. It would be likely that one is going to want a fair return on thier investment when you get into those kinds of dollars. The owner is carrying all of the risk.
Packmule had a recent story of a $10,000 repair. That expense has to come from somewhere.
I don't lease purchase trucks and don't recommend it. I have never seen one go to term. As far as loans, 5 percent was obtainable last year, but I haven't seen anyone at that rate for commercial financing in awhile. Maybe a home equity? But who would consider that?
Usually when I see owners trying to recruit at 65 percent, it usually means an owner in financial trouble, older truck, or a smaller sleeper that he is trying to put a team in.
Of course there are those exceptions
Just my penny in the pond.
Davekc
owner
21 years
PantherII
EO moderator
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I believe he is saying not to let your unpaid miles exceed 25 percent. Personally, I think 25 percent is too high.
I am assuming the colonels 75 percent is based on the gross run. It wouldn't be worth it if you were giving 75 percent, plus 100 percent of the fuel surcharge.
I would agree with Highway as there are numerous things that go into what percentage to use.
Older or bare bones trucks without the creature comforts or a generator could be done at that 65 percent. When you start putting generators on and are running trucks over $100,000, the dynamics start to change. Same line of thinking when you start doing TVAL or reefer trucks. Price tag on new ones is starting at $130,000 up to $180,000. It would be likely that one is going to want a fair return on thier investment when you get into those kinds of dollars. The owner is carrying all of the risk.
Packmule had a recent story of a $10,000 repair. That expense has to come from somewhere.
I don't lease purchase trucks and don't recommend it. I have never seen one go to term. As far as loans, 5 percent was obtainable last year, but I haven't seen anyone at that rate for commercial financing in awhile. Maybe a home equity? But who would consider that?
Usually when I see owners trying to recruit at 65 percent, it usually means an owner in financial trouble, older truck, or a smaller sleeper that he is trying to put a team in.
Of course there are those exceptions
Just my penny in the pond.
Davekc
owner
21 years
PantherII
EO moderator
I guess i'm wondering why someone can't run for $1.50 per mile. If they don't have a "need for speed" and pay attention for other details that should be a very good living. Fuel with the right equipment should cost somewhere around $.30 per mile, equipment cost for an $80,000 truck should be $.16 assuming you take care of it, and, it runs what I consider a minimal half million miles. Interest on that another $.09. Maintenance, a crap shoot, say $.10. Other, liscense, and other things, say, $.05. Maybe you all can help me with other items, but, this is about what I look at. Seems to be about $.70 on the cost end. Even if you are making $1.20 a mile should leave $.50 for the household. Doing even 1800 miles a week should be $900, not real bad. And, before you start, I need you to understand that your food at home is not free, your entertainment at home isn't free, and all that. Don't give me crap about having enough set aside for another paid up truck, because the first one was not paid for when you started. However, now you have trade bait, and (some) extra set aside (hopefully). This business really can be fun, but, you have to be in the truck, and ready to service your customer.
Good post. Although I will admit, a new truck for $80,000 is becoming a rarity. One can go used but that brings another shift in numbers and reserves. Some would depend if it has a warranty and all that. Can one run at $1.50? Maybe. I would think it depends on how many unpaid miles you are running against that number. You and I operate on very little DH but for some I see posts at 25 to 30 percent. That will skew those numbers.
Davekc
owner
21 years
PantherII
EO moderator
Davekc
owner
21 years
PantherII
EO moderator
I feel a $80,000 truck is a working machine not a camping machine, don't feel you need much more than that, if, you want to move freight. I had a couple stick their nose up in the air toward my 110" double bunk condo, because it didn't have a sink and shower in it this week. Also, I have contractors drive 60-80 miles empty to a truck stop to sit in the lot. Not too bright but, they feel those are part of the requirement to be a driver. Must think the cell phone won't work somewhere else, or something. I don't know. But if they complain about revenue for ALL miles driven, I can easily show tax miles versus dispatched miles and it is a wake up call for them. It's interesting figgures don't lie, but liars do figgure. Not calling them liars, but, those elective miles most of the time are forgotten in the general scheme of things. Seems to be vogue to sit on asphalt at an idle, instead of finding a shade tree and rolling the windows down, or better yet, sitting under it. Or, if it's real hot, why not go to the local swimming pool for the duration. Idle, not in my vocabulary. I'd like to take a poll of how many drive 50+ miles to a truck stop, just to drive back 80 for a pickup. Probably scare us. Nuff typed this time.
There have been several good responses so far. To get 60% of the revenue plus 100% of the fuel surcharge with nothing invested is a fair return. I'd add that I believe the driver should get 100% of hand load/unload pay unless the owner happens to be at the same dock in another truck and helps with the job. I'll add to that I believe the carrier should forward 100% of lumper pay just the same as fsc, not keep 32% or whatever their percentage is, again unless a company employee is there and helps.
Keep in mind that without the owner's 100% investment in the truck you wouldn't be getting a 60% payout of what the truck earns. Out of that remaining 40% the owner is paying 100% of maintenance, insurance, repairs and other expenses as well.
I've discussed financing with someone in that business and was told the best rate available through the bank for someone with the top tier credit rating is 8.1%. The mention of the 7 point spread sounds like some sort of lease purchase arrangement, not a driver position. I would never never lease from the same company/source I was running for. That's an instant invitation to disaster.
There are some bad owners out there. They field poor equipment that's shoddily maintained. There are a lot of good owners out there as well. The good owners earn the 40% just as much as the drivers earn the 60%.
For deadhead I divide the paid miles by 5 to get the maximum deadhead acceptable. That means no more than 100 on a 500 paid mile run. That's a 16.7% ratio. Using the 1 to 4 ratio mentioned gives 20% deadhead which is ok but borderline in my opinion. As someone mentioned, it also depends on where you are and where you wind up. YMMV.
Leo Bricker, 73's K5LDB, OOIDA 677319
Owner, Panther trucks 4958, 5447
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
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Support the entire Constitution, not just the parts you like.
Keep in mind that without the owner's 100% investment in the truck you wouldn't be getting a 60% payout of what the truck earns. Out of that remaining 40% the owner is paying 100% of maintenance, insurance, repairs and other expenses as well.
I've discussed financing with someone in that business and was told the best rate available through the bank for someone with the top tier credit rating is 8.1%. The mention of the 7 point spread sounds like some sort of lease purchase arrangement, not a driver position. I would never never lease from the same company/source I was running for. That's an instant invitation to disaster.
There are some bad owners out there. They field poor equipment that's shoddily maintained. There are a lot of good owners out there as well. The good owners earn the 40% just as much as the drivers earn the 60%.
For deadhead I divide the paid miles by 5 to get the maximum deadhead acceptable. That means no more than 100 on a 500 paid mile run. That's a 16.7% ratio. Using the 1 to 4 ratio mentioned gives 20% deadhead which is ok but borderline in my opinion. As someone mentioned, it also depends on where you are and where you wind up. YMMV.
Leo Bricker, 73's K5LDB, OOIDA 677319
Owner, Panther trucks 4958, 5447
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.
Absolutely, drivers, and or contractors should get 100% for finger printing freight. NOT 100% of 60%, or, 60% or 60%. We've had folks that have made more unloading than hauling the freight. We charge a nickle a pound. The problem is, I feel, it's all about money. Not Service. Way too many owners, just don't understand, they don't have a clue except for reading the spreadsheet. Unfortunatly. And, it won't work that way.
A 110" double bunk sounds like a century cabover. The 110 represents the whole cab. It would seem harder to recruit a team with most of the others having above a 72 inch sleeper.
They probably thought you meant a 110 sleeper which would likely have a sink. In otherwords, a 110 cab and sleeper is much different than a 110" sleeper.
If you have the 110 cabover, it only has a 60 or 70 sleeper.
No place to really put a sink.
Davekc
owner
21 years
PantherII
EO moderator
They probably thought you meant a 110 sleeper which would likely have a sink. In otherwords, a 110 cab and sleeper is much different than a 110" sleeper.
If you have the 110 cabover, it only has a 60 or 70 sleeper.
No place to really put a sink.
Davekc
owner
21 years
PantherII
EO moderator
dieselphreak2K
Expert Expediter
I'm not sure a cabover 60" would do it as a team. With two of us in this 72" Bentz, we are out of room.