Truck Ownership

[Teflon]

These questions are for you experienced O/O out there.

I created a spreadsheet to get an idea what it would cost me per mile to
operate my own truck. Based on 120000 total miles driven per year(20% deadhead) and a $2000/mo. truck payment and using 9mpg fuel flow at $2.50/ gal. I came up with .87/mile operating cost. Does this sound High/Low to you? I am getting .52/mile as a driver. At companies like Panther that have per mile to truck at $1.20, what are the advantages of owning a truck?

 

[raceman]

Decrease your overhead, increase your rate and it will make much better sence.

It is very doable and very beneficial but you gotta get out of that box you built your spreadsheet in.

Best of luck with your decision.

Raceman
Dedicated O/O
OOIDA 741748

 

[nightcreacher]

87cpm in a d truck seems high to me,even if you were running team,either lower expenses or in increase mileage

 

[davekc]

I created a spreadsheet to get an idea what it would cost me per mile to
operate my own truck. Based on 120000 total miles driven per year(20% deadhead) and a $2000/mo. truck payment and using 9mpg fuel flow at $2.50/ gal. I came up with .87/mile operating cost. Does this sound High/Low to you? I am getting .52/mile as a driver. At companies like Panther that have per mile to truck at $1.20, what are the advantages of owning a truck?
===============================================
Sounds alittle high, but you also have to calculate your average FSC in addition to the 1.20 unless you are running without one.














Davekc
owner
22 years
PantherII
EO moderator

 

[Olko]

>These questions are for you experienced O/O out there.
>
>I created a spreadsheet to get an idea what it would cost me
>per mile to
>operate my own truck. Based on 120000 total miles driven per
>year(20% deadhead) and a $2000/mo. truck payment and using
>9mpg fuel flow at $2.50/ gal. I came up with .87/mile
>operating cost. Does this sound High/Low to you? I am
>getting .52/mile as a driver. At companies like Panther that
>have per mile to truck at $1.20, what are the advantages of
>owning a truck?

I didn't check your math to see if you might have already figured things like
Qualcom Charges (including installation)
Cell Phones
Pagers
Calling Cards
Truck Ins
Workers Comp Ins
Medical Ins
Tolls
Motels (if used or needed for breakdown)
Accountant
Fuel Taxes
Plates
Repairs and Maintenance
Inspections

All these things, as well as other things I didn't list all have to be calculated in to know the accurate cost per mile. Granted most of the items I listed fall under the term "fixed cost" but you must know the real figures for each. Obviously your fixed costs will go down on a per mile basis with the more miles you run, but if you just pull a round number like 100k paid miles per year, and you really only run 80k, that money will have to come from somewhere. The money you thought you would be paying yourself is the only place left.

Having accurate cost per mile figures is the ONLY way to know if that load offer is going to be profitable. Not knowing this figure can actually leave you losing real money (not just money on paper) on some loads.

The bottom line is, every driver it doesn't matter if they are a green newbie or seasoned pro needs accurate data to figure their true costs. This info needs to be continuosley updated as miles may change along with fuel prices and the charges for the fixed cost items.

I do remember our cpm was aprox .47 to .49 cents per mile, but that figure would be totally useless today.

Hope this helps
Kevin

Former "D" unit Driver and Owner Operator with my wife WendyCal.
Possible future Driver of a "C" or "D" unit with the same wife.

 

[Teflon]

Here are my figures. The Maintenance figure includes oil changes every 10,000 miles. The Repair figure includes a reserve for unexpected repairs. From the feedback so far (thanks for that) it seems my figures are on the high side. I want to be sure my estimates are not too low and get a big surprise if I decide to buy a truck.

Cost of Operations
Based on 115000 Revenue Miles per year
16% non revenue miles = 133900 miles driven

Fixed Cost Annual Cents/mile

Lease Pmt. $15,600.00 $0.120
Fuel Tax $900.00 $0.007
Truck Payment $31,200.00 0.23
Insurance $2,720.00 0.02
Occupational Insurance $2,054.00 0.015
C-Link 1,820.00 0.014
Coliision-Comp $2,352.00 0.018
Licenses $1,572.00 0.012
Accounting $540.00 0.004
Total Fixed Cost $58,758.00 $0.440

Variable Cost

Fuel -$2.60 per gal-9MPG Avg. $36,646.00 0.274
Tires $3,504.00 0.026
Maintenance $4,656.00 0.035
Repair $5,616.00 0.042
Truck Wash $696.00 0.005
Telephone $2,400.00 0.018
Lodging $780.00 0.006
Meals $5,160.00 0.039
tolls $1,272.00 0.009
Taxes $1,764.00 0.013
Misc. $600.00 0.004
Total Variable Cost $63,094.00 0.471


Annual Cents/mile

Total Fixed Cost -$58,758.00 .44
Total Variable Cost -$63,094.00 .47
Total Operating Cost $121,852.00 .91

 

[terryandrene]

Being a devils advocate here and not trying to nitpick because I don't have the same operation as you, but here are a couple of places I think you are a bit high.

Repairs.

I'm assuming you have a warranty in effect since you are buying the truck so are your maint costs an estimate for after the warranty expires and the cost is on you? I also thing you shouldn't include the repair fund as a cost of doing business because, theoreticaly, you can carry that over from year-to-year.

What are you leasing that you would not if you were not using the truck as a business? Is that $15,000 necessary?

Will you operate the truck after the loan is paid and what is the anticipated life of the truck and the scrap or resale value that can be deducted from your muti-year total average.


Telephone seems too high for business use only; back off the personal use portion.

Meals for yourself are not a cost of doing business. In fact, you can take the transportation workers standard meal allownace of $52 a day (x.75) as a tax deduction. That's likely more than you'd actualy spend on food. I'd back that variable cost out of your figures.

 

[davekc]

Terry beat me to it. I don't understand the truck leasing and truck payment listing?

Also on repairs, tires is high if this is a straight truck. You may replace steers once a year, but your drives will last awhile. With tires at 200 to 400 dollars a piece, $3500 sounds high for the year.

Your on the right track, just need to fine tune some things. You came to the right place.










Davekc
owner
22 years
PantherII
EO moderator

 

[Teflon]

Thanks for the comments drivers....you have been a great help.

 

[raceman]

They hit the high spots. I will tell you I am running a straight and have spent just over $900 in the last three years on tires. I just bought top of the line GoodYears as steers. You will in know way need $3500 for tires.

To tell you a very current figure and this is for everything as I recently obtained my own authority,so it includes full insurance and cargo insurance. I work off of .54 to .60.
Raceman
Dedicated O/O
OOIDA 741748

 

[bigjoep89]

Concrete truck driver 15 years
Concrete sales mgr, 13 years.
Expediter 1.5 years.

Teflon. I will not go into the complete formula I used but our D unit we owned and operated in 2005. We figured a cost of .86 per mile. Back to part two of your question, I am like you I really don’t know if it is better to buy or own your own truck. I have been thinking this way. If I want to control all aspects of my business I would buy a basic truck that would do all that is expected from our leased carrier. If I were going to drive for someone I would only drive the most comfortable truck I could get with all the accessories as I know they are out there.
God bless our military and vets.

 

[Teflon]

BigJoe.....I agree 100%.

 

[Broompilot]

I agree with Dave regarding tires, my expierence so far has been $3,500 over two years with some change left for front end alignment and tire balancing thus in two years my costs are going to be almost to the penny the $3,500.

As for the two thousand a month in finance, payments, lease etc... This in my opinion and to those I have seen come and go on this site, is going to be your breaking point. What I mean is this business will not carry that kinda note payment with all of the other unexpected expenses or unexpected down turn in revenue to keep up with that high of a payment.

Please do not become another gone by the wayside, save a larger down payment before diving in. Life has a way of happening, and unexpected events is part of it. One can plan all they want but when things go bad its usually in three's, if you do not have a saftey net (500) a month in your pocket not the banks you can make a pretty nice net over the course of a year or two.