Math, the bottom line

[BIG D]

I spoke to a FEDEX CC recruiter and he stated that a 22' straight truck, team operated, available 90% accepting 60% of the loads would make $145,671. I plan on owning the truck and using independent drivers. The following is for the scrutiny of the masses.

monthly Rev: 12139
monthly Var cost. 10000 mile avg:
Fuel-3000.00 @ 3.00 a gal Veh gets 10MPG
Maint-350.00 @.035 a mile

TOTAL: 3350.00

monthly fixed:

Truck payment-1727.00 Financed 65000 @12.5 for 48 months
Insur-300.00
COM-DATA-130.00
Base plate-66.60 (800.00/12)

TOTAL:2223.6

OVERALL EXP:5573.6

OWNER GROSSES 40% 4855.60........DRIVERS GROSSES 60% 7283.40
PAYS FOR MAINT................... ....DRIVERS PAYS FOR FUEL
AND FIXED EXP NETS 2282.00...........................NETS 4283.40

For the experts out there is this realistic and is this a competitive wage for a driving team. I have thick skin so please do not hold back!

 

[Tennesseahawk]

First thing that hit me was 90% in service. Is that what you intend on having your drivers do? Because not too many ppl want to be out 27 days of the month. At $4283, that comes to $500 per driver per week. If I were a team, I'd have to do way more than 10,000 miles/month... especially being 90% in service.

One other thing... are we talking a D-unit here? The revenue seems low for the miles. Maybe the miles would be lower in reality.

 

[BIG D]

Yes a "D" unit. The mileage was a swag on my part. I couldn't get the recruiter pinned down on how he computated the revenue. An estimate on what a truck would make at 75% avail and 75% acceptance is probably a better target. Thanks

 

[ATeam]

More power to you if you can find and keep drivers who stay in service 90% of the time. On the surface, it sounds doable. After all, there are 365 days in the year. 90% of that is 328.5, leaving 36.5 days a year off. Wow! over a full month prt year off and 90% in-service would still get you regognized as a top performer!

If only it were so.

Some of your time off is to sit in a dealer's waiting room or hotel as you wait three days for parts for your broke-down truck to arrive. Some is to catch up on sleep and laundry and grocery shopping and maybe a haircut after running yourself ragged for two or three weeks. Some of the so-called off time is spent not at home but driving there. Once a driver gets home, that's when the true off-time starts in the driver's mind. There are the planned trips home for scheduled family events and holidays. There will also be the unplanned trips home for emergency family events or other important business that can only be completed at home. And there is the temptation to take unplanned time off when the freight takes you close to home or an interesting tourist attraction.

It is not the case that out of service time is free time. More than one at-home driver has joked with us that they have to get back out on the road so they can rest up.

Note the recent comments about the FedEx Four Star award banquet. There, FedEx recognizes its TOP performers each year. The in-service time for four-star eligibility is significnatly less than 90%...and that's for the best drivers in the fleet.

There are some drivers out there that keep themselves in service 90% of the time. If they are sensible with the other aspects of the expediting business, most will not drive a fleet owner's truck for long. They will buy a truck of their own and keep the fleet owner's profits for themselves.

While math is very, very important, there is more to expediting than the numbers. Fleet owners are burdened with a whole lot of interperaonal work and character judging to do when selecting and retaining drivers. Most applicants will tell you what they think you want to hear. The fleet owner's challenge is to identify the prospective drivers who are actually ready, willing, and able to do what they say they will do.

Regarding the annual production number you mentioned, this may help. In our first year, our acceptance rate was about 77% (actually 76% in one truck and 78% in another in that time period). Our in-service rate was about 90.5% (actually 90% in one truck and 91% in another in that time period). While the numbers fluctuated month-to-month and quarter to quarter, the 77% and 90.5% are full-year figures.

When we discussed potential income with our prospective fleet owner, we asked if we could gross (to the truck) $150,000. He told us that if we did less than that in the White-Glove, reefer-equipped truck he was running, he'd have to consider letting us go. That was great news to us. It told us $150,000 a year was feasable. As things turned out, it was indeed feasable and we did better than that.

When crunching your numbers, it is important to note that you are talking about a dry-box truck, not a reefer-equipped White-Glove equpped unit. That said, I believe a good team can do $140,000 plus in a dry-box D-unit.

Indeed, the FedEx Custom Critical revenue sheet (real name: "Annuual Revenue Averages") says average revenue for 2004-2005 for a team-driven 22' cargo box D-unit was $145,791. Average acceptance was 62%. Average availability (in-service) was 73%.

Crunching the numbers as you are, you should obtain a revenue sheet if you do not already have one. FedEx publishes this document each year. It is available free from a FedEx recruiter. The document includes fleet averages for miles per year, average per mile loaded, average total miles, and more.

While the averages can be educational, expediting is a people business. It is far less predictable than math alone might lead one to believe.

 

[jaminjim]

Having spent more than a few years in od green, a question came to mind. I did not see where you are stationed, and how long you will be there. Might make it hard to manage from one of those far away places. Or are you locked in until ETS.

 

[BIG D]

Thanks Phil,

Very informative. I am surprised the recruiter I spoke to did not mention the annuual revenue averages spread sheet. I'll definately call to get a copy. Since your in the white glove program I would like to get your opinion on what another O/O said about the program. "I would not recommend investing in a reefer equipped truck and dedicating yourself to the white glove program for the following reasons: FEDEX CC has the ability of holding you at a location to wait for the next load. Inside deliveries increase from 1% to 80%. the revenue is much greater however, so is the time waiting for the next load." He went on to say, "Buy a dry box "D" unit equip it with everything you need for white glove, i.e. lift gate, pallet jack, dolly, etc.., and let dispatch know of your truck's configuration. Bottom Line... If your waiting for your next load in Atlanta and a white glove non-reefer load pops up, without a white glove team nearby, you'll get the load and the extra revenue that goes along with it."

Fact or fiction??

Thanks

 

[ATeam]

>Thanks Phil,
>
>Very informative. I am surprised the recruiter I spoke to
>did not mention the annuual revenue averages spread sheet.
>I'll definately call to get a copy. Since your in the white
>glove program I would like to get your opinion on what
>another O/O said about the program. "I would not recommend
>investing in a reefer equipped truck and dedicating yourself
>to the white glove program for the following reasons: FEDEX
>CC has the ability of holding you at a location to wait for
>the next load. Inside deliveries increase from 1% to 80%.
>the revenue is much greater however, so is the time waiting
>for the next load." He went on to say, "Buy a dry box "D"
>unit equip it with everything you need for white glove, i.e.
>lift gate, pallet jack, dolly, etc.., and let dispatch know
>of your truck's configuration. Bottom Line... If your
>waiting for your next load in Atlanta and a white glove
>non-reefer load pops up, without a white glove team nearby,
>you'll get the load and the extra revenue that goes along
>with it."
>
>Fact or fiction??
>
>Thanks

The above is essentially correct except the part about FedEx CC having the ability to hold you at a location to wait for the next load. There is something called the "White Glove lock which is widely misunderstood. Dispatch will often "lock" a WG truck. The idea is to keep the WG-equipped truck available for WG loads. The lock can be removed at the driver's request.

We've never had a problem getting the lock removed. A simple request does the trick. That said, the only time we ask to have the lock removed is if we've been sitting longer than a day or two. The lock does not mean surface expedite will not call you. It only means surface expedite must check with White Glove dispatchers before offering you a non-WG load.

While inside deliveries increase, I would not say as high as 80%. But you can count on doing them if you are WG-qualified. It would take some bookwork to go back and produce a percentage from our experience. A very-general guess would be 10% to 20%.

Your friend is correct saying WG loads will be dispatched to non-WG trucks if no WG truck is available, though, WG dispatch usually takes a close look at the driver's record before doing that.

Also note that within WG, driver and truck quilifications vary a fair amount. The big difference with trucks is reefer-equipped or not. Among reefer trucks, it's T-Val qualified or not. With drivers it is the clearances and training you have or not (government-issued, company-issued as in approved to haul art work, trained to haul certain kinds of HAZMAT other trucks never see). A cleared team will do much better than an uncleared team in the same truck, simply because the cleared team will see and likely accept more load offers.

In WG, the truck is only part of the story. Driver qualifications, work ethic and business skills (especially interpersonal skills with very particular and demanding customers) also enter in. That elevates a fleet owner's recruiting challenge. Every additional driver qualification reduces the available pool of them.