Owner Operators Failing

[jviola]

Hi all new guy here
Some want to know why new o/o's fail? Try cheep freight!!! If we don't stop taking cheep freight no one will make anything. If i don't take it you you say i can't make any money, If you keep taking it the price will go even lower and no one will make it. Know your operating cost and set your rate. I for one will let cheep freight sit and some times I'll have to take a load that is lower then my rate but still above my operating cost, so i have to eat an MRE that night i'll make it up next time but only if others stop taking cheep freight. Remember don't put everything you have into this, If thats what you have to do to start you may not make it if you have to put every dollar to your truck payment.If anyone knows a better insurance rate please let us know. Good luck new o/o's

[Bullwinkle]

Very good points.

If you are an owner operator, it is senseless to haul freight that is so cheap that are barely covering your fixed and variable costs, or in some cases, losing money.

Always consider a few things:

• Truck payment - even if you don't have a payment, figure on putting money back to pay for one at a later date. This must be an expense that you factor in, your truck won't last forever.
• Business profit - As an owner operator, your truck is your business, and you need to make sure your business is making a profit
• Personal profit - On top of your business profit, you need to pay yourself a salary. Make sure you are doing this, otherwise you are simply out on the road, funding your business, and not making any money.

[jviola]

Would any one like to share there operating cost with the newbe's to help with the big picture of trucking

[marekpol]

Wow, if you`re taking loads paying less than 1.89 a mile sooner or later will have a financial problems. I`m talking if you own a trailer(reefer) I don`t know about dry, flatbeds.

[DDHXSC]

Guys take advantage of these websites. Join the web-based service that let you bid on frieght or have set prices for loads. This way you can set your own price. A lot of these web-based services are free to join.

[pro1driver]

Quote:

Originally Posted by jviola Hi all new guy here Some want to know why new o/o's fail? Try cheep freight!!! If we don't stop taking cheep freight no one will make anything. If i don't take it you you say i can't make any money, If you keep taking it the price will go even lower and no one will make it. Know your operating cost and set your rate. I for one will let cheep freight sit and some times I'll have to take a load that is lower then my rate but still above my operating cost, so i have to eat an MRE that night i'll make it up next time but only if others stop taking cheep freight. Remember don't put everything you have into this, If thats what you have to do to start you may not make it if you have to put every dollar to your truck payment.If anyone knows a better insurance rate please let us know. Good luck new o/o's

its not only the cheap freight, or the expenses that are causing failures. its also the "incidentals" that are causing this too. like they o/o that needs a new gizmo for the cb radio, or that new piece of chrome for the truck, or that new tv,dvd,stereo for the sleeper, or that extra soda pop, or candy bar, or bag of potato chips.

the diligent o/o will watch the pennies first and foremost. like cutting down on idling, like routing himself the most direct way.

i think the failure's are from idiots that think about the "bells & whistles" before the important things first. only a small segment of o/o's are going out of business, these are the bottom feeders to even begin with. so good ridance. they think more about specing out a high powered truck than a truck "to get the job done".........

the "true" owner-operator is a business man first..........and foremost.......

[jicenogle72]

I get a little miffed when I hear about people bitching about cheap freight. Sure someone will lose money hauling it, but thats just it. I won't lose money by hauling it. I make a modest 1.20 a mile for every mile I turn in a regional refrigerated company. Adding in the fuel surcharge for loaded miles and I turn a nice profit. If all freight was high dollar then the prices of said product would be reflected at the consumer level. Thus you would pay more for products you yourself helped inflate.

[Bullwinkle]

How much pure profit are you earning per mile, at $1.20/mile? Truck payment figures into this, so if the truck is payed for, then the profit may look good, but at some point, a truck payment, or savings put back to purchase a truck, must come into play.

I ran the numbers before going back out on the road a year ago, and unless I can get $2.00/Mile, I was better off driving someone elses truck for .45/Mile, with paid medical insurance, paid life insurance, paid vacation, and absolutely none of the stress that goes along with running a business.

[Wyatt Earp]

Quote:

Originally Posted by jicenogle72 I get a little miffed when I hear about people bitching about cheap freight. Sure someone will lose money hauling it, but thats just it. I won't lose money by hauling it. I make a modest 1.20 a mile for every mile I turn in a regional refrigerated company. Adding in the fuel surcharge for loaded miles and I turn a nice profit. If all freight was high dollar then the prices of said product would be reflected at the consumer level. Thus you would pay more for products you yourself helped inflate.

Don't understand how you guys think you are making money with rates like this. Expenses are way more than that. I've been in the Trucking industry since "78" and the rates are cheap cheap cheap. If you get 5mpg and fuel is 4.00 = .80 per mile, driver pay .40 = $1.20 that is not counting any other expenses, I can figure more but it will go on and on

We already pay more. When i ask why the cost has gone up i am told that the cost of transportation has gone up. Where is it? i am not getting it, as a matter of fact i seem to be getting less.

[mr mopar]

I know that a lot of o/o,s do not like to do the math, but if you are going to make it in this business you had better start counting your pennies, so I will list some fixed and variable expenses and this is by no means all of the expenses. I will base this on a average of 2,200 miles per week for a total of 114,400 miles per year next we have truck payment of 1650.00 per month (this average with some higher, some lower). I will also include insurances, drivers pay , maintenance

THESE ARE FIXED COSTS

Miles per year 114,400
#1 Truck payment per year $19.800 =(17.3 cpm) cents per mile
#2 Truck insurance (for this I will value the truck at $50,000 this is just an avg.), $50,000@ 3.5% = $1,750.00 per year = (1.53 cpm).
#3 unladen insurance (bobtail) required by most states $650.00 per year = (0.0056 cpm)
#4 workman’s comp required by most states $400.00 per year =(0.0035 cpm).
# 5 2290,permits, tags $2.000.00 per year = ( 0.017 cpm)
# 6 truck maintenance $6864.00 = (0.06 cpm)
# 7 driver pay(YOU MUST PAY YOURSELF) $45,760 =(0.40 cpm) .
# 8 per deim out 260 days @ $35.00 per day = $9100.00 =(0.08 cpm).
So the fixed cost on items listed above is $0.73.9

THE VARIABLE COST IS MAINLY FUEL

# 1 The doe average for the week of 04-08-08 will be approximately $ 4.08 per gallon so 4.08 / 5.5 = (74.2 cpm)
please understand that are many more items that I have left out if you have your own authority, air cards, computers, phones, load board subscriptions, tolls and so on.

So cost per mile 0.73.9 + 0.74.2 = $148.1 per mile
If you own a trailer and $0.10 per mile

I know some of you will say my truck is paid for, but you are going to have to replace it sooner or later so it is always wise to factor a truck payment into you cost. YOU, WE MUST get out the company driver mentality of 90 cpm plus fuel. This is just averages some will be higher and some will be lower but this a good average.

[BANDIT]

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