Profit Margin

[vtrover]

I recently posted a message in the forum relating to cost per mile(CPM). I asked what D unit owners were averageing for their CPM, but only received one response directly relating to the question(RichM).

Realizing the factors involved, new vs. used, equity, annual miles, insurance, and all the other fixed and variable costs, it's obvious the range will be widespread.

Assuming that every owner knows their actual operating costs, would anyone be willing to share this information?

Thanks,I have not signed the dotted line yet...

 

[davekc]

I think many don't really know what that number is. Many times this leads to a driver staying with a under performing carrier for too long. Or it may contribute to poor decision making when accepting loads.
As you mentioned, it is a hard number to arrive at for an average. You have mentioned several of them. Other factors depend on the amount of miles ran per month or freight types. For example; the person with a reefer,liftgate, and tag axle will have much higher CPM, but they should be running at a higher milage rate. It is tough to draw a specific average without additional information.
Same with profit. Cost for one truck may be completely different for another. Many have over paid for a new truck by 20k or 30k. That just by itself will effect your CPM. Remember, it is that cost plus the interest charge over the life of the loan. What kind of loan do you have? Is it simple interest or something else? See where I am going? Is a wage included? 8,000 miles per month is different than 20,000 miles per month
I would say a low of .40 CPM to $1.10 CPM. It is too wide of gap without additional specific information.
Not sure I helped you or not.
Davekc
owner
20 years

 

[vtrover]

Davekc
Thanks for your response to my inquiry on CPM. I understand it's a difficult question considering all the variables.

My post Feb.26 on the subject "Cost Per Mile" outlined information specific to the truck I'm considering. Cost per mile on the new truck is around .83 cents per mile, not including wages.

Our last truck, operating costs were about .50 CPM, averaged on the same amount of annual miles. The .33 CPM difference represents a substantial increase for new truck payment, insurance, etc. That's the part I'm not comfortable with.

Your estimate of .40 to 1.10 CPM makes me feel a little better, but how could anyone operate a truck at 1.10 CPM!

 

[davekc]

Your estimate of .40 to 1.10 CPM makes me feel a little better, but how could anyone operate a truck at 1.10 CPM!


Most cannot operate at that number. The ones that do usually end up losing their trucks. Not to mention houses and everything else. The bank or finance auctions always have repoed trucks.
One thing that may help you is OOIDA.
They have a spreadsheet that you can plug in your numbers to arrive at your CPM.
They are at www.ooida.com
I don't believe you have to be a member to use this service.
Davekc
owner
20 years