PAY

[wild bill]

Iv'e been lurking on CAD for about 8 months now, doing some research.
There is a lot of good info here but I am still trying to decide if I want
to get back into trucking. Iv'e looked at many different company's and
since I haven't been on the road for twenty years I have to start as a
Newb.
I'm 48 yrs. old and I have a chance to retire from my present job, and
the only other job I ever had was hauling cars back in the mid 80's. I
only drove for a short while, I was laid off from my present job at the
time.
But the reason I'm posting on this Forum is I have a chance to drive
for an Owner Operator, whom happens to be my Brother inlaw. His
offer is to pay me 50% of what the truck nets. He pulls for a small
Refer co. and owns his own Trailer. He gets paid by percentage which
77%.
I was wondering if some of you guys might give me your opinion on
his offer?
The truck and trailer are both paid for. It,s a 2002 Freigtliner Classic
XL with 1 Million miles on it. It has a Cat C15 engine. I only mention
this because if there are any mechanical problems it will surely reduce
the net income for the week. He did say if the engine went out he
would just replace it.
He says he grossed $250,000 last year. I would also appreciate your
opinion on that number, does it sound realistic to you?
Thanks in advance, Bill

[solo379]

He says he grossed $250,000 last year. I would also appreciate your
opinion on that number, does it sound realistic to you?

Why not! But that number alone, didn't mean sh$t!
It would help, if he could provide you with the actual miles he has run.
I'd also ask him to show 1099, or any other proof on that figure.

Yeah, i know, he is your brother in law, but from my experience, business didn't mix well, with the friends and the family! :sad:

Anyway, I've heard about 50/50 split after the fuel, but for all expenses for over million miles truck, his revenue, should be pretty high, to make it worthwhile for you!

Welcome to the forum! 8)

[rank]

..the only other job I ever had was hauling cars back in the mid 80's.

cha-ching!

His offer is to pay me 50% of what the truck nets <snip> He gets paid by percentage which is 77%.
I was wondering if some of you guys might give me your opinion on
his offer?

The key to this deal is what expenses he will be deducting to arrive at a net income. For example, with current fuel prices, I consider my cost per mile to be $1.24 + driver and calculate my "net" for each trip as follows:

Net Income = revenue - (all miles X 1.24 + driver)

so, if we take a round trip like one that I was trying to put together this morning.... $5,000 for 1375 miles Syracuse to Pickle Lake ON, then DH 625 miles for a Minneapolis to Toronto paying a ghastly $1300 on 1000 miles, it would go something like this.

His Cut = ($1300 + $5000) x .77 = $4851

Net To Truck = $4851 - ((1375 + 625 + 1000) x $1.24) = $1131.

Your Cut = $1131 x 50% = $565 for 3000 miles

Not very good. Ask him what "net" is.

He says he grossed $250,000 last year. I would also appreciate your opinion on that number, does it sound realistic to you?

Yep. Seems reasonable.

[RostyC]

I'd take a hard look at those numbers, even pull out some paperwork on some recent trips and start doing the math to see where you'd be money wise. Then I would compare that number to 25 to 30 % of gross, which is what most company driver percentage pay is just to see what the difference is.

Is he putting you on payroll? or 1099?

I also agree with Solo, be careful doing business with family.

[sodbuster]

The key to this deal is what expenses he will be deducting to arrive at a net income. For example, with current fuel prices, I consider my cost per mile to be $1.24 + driver and calculate my "net" for each trip as follows:

Net Income = revenue - (all miles X 1.24 + driver)

so, if we take a round trip like one that I was trying to put together this morning.... $5,000 for 1375 miles Syracuse to Pickle Lake ON, then DH 625 miles for a Minneapolis to Toronto paying a ghastly $1300 on 1000 miles, it would go something like this.

His Cut = ($1300 + $5000) x .77 = $4851

Net To Truck = $4851 - ((1375 + 625 + 1000) x $1.24) = $1131.

Your Cut = $1131 x 50% = $565 for 3000 miles

Not very good. Ask him what "net" is.

rank I am confused on your math.
should the formula look like this
Net To Truck = $4851 - ((1375 + 625 + 1000) x $1.24) = $1131
Net to truck = 4851- cost per mile of 1131= $3720
your cut = 3720 x %50= $1860

could explain 1.24+ driver is that adding a drivers pay to that 1.24???? :?

[wild bill]

Thanks for your opinions, they are much appreciated. It sounds like I
might be better off getting paid by the mile. He had offered to pay me
.40 cpm and I thought that was a good offer, then he said he was
thinking about it a little more and he thought 50% of the net would
come out about the same.
I'll have to ask him what his net is and decide then.
One more note. he runs mostly North East and goes South East once
in a while. He goes into NYC about two or three times a month. It's
been a long time since I drove a truck in NYC, is it still as fun as it
used to be?
LOL, Thanks Again :wink:

[no_worries]

Running mostly NE, I can't imagine he was turning big miles. If he's grossing $250,000 a year that's a serious average per mile for reefer freight...who's the company and are they doing LTL?

[wild bill]

no_worries, yes they do LTL, it's a small company only about thirty
trucks. He does two rounds a week from SE MI. and back. He's off
most weekends for a day and a half.
He showed me the paper work for the load he is taking to New
Jersey tomorrow morning. He will make $2.18 per mile for the trip
without fuel sur charge. He did say this will be one of the better
paying runs he's had in a while. He says he averages around $1.80
with fuel sur charge.
The name of the Company is TM Morley.

[TK THE TRUCKER]

The name of the Company is TM Morley.

I think they forgot to finish their website.

[solo379]

He goes into NYC about two or three times a month. It's
been a long time since I drove a truck in NYC, is it still as fun as it
used to be?

It's sure is all that, and some more!
But i bet, that's where money come from!
8)

[rank]

could explain 1.24+ driver is that adding a drivers pay to that 1.24????

Yep. I deducted driver pay from my cost per mile in this example because we were talking about percentage. My cpm including driver is ~1.60.

[rank]

Sodbuster,

In my example, the owner of the truck got paid $4851 but it cost him $3720, leaving him with a net profit of $1131, which he splits 50/50 with the driver.

[LOAD IT]

could explain 1.24+ driver is that adding a drivers pay to that 1.24????

Yep. I deducted driver pay from my cost per mile in this example because we were talking about percentage. My cpm including driver is ~1.60.

Rank, could you post the breakdown to get to $1.24/mile cost before driver pay? I would like to compare to my formula and see what changes I may need to make. You can pm it if you like.

[rank]

Sure. These are Canadian dollars so deduct approx 5% for US.

TRUCKS
'01 T2000 KW = $115,000 bought in '02 and ammortized over 5 years = $23,000/yr
'01 Sterling = $60,000 bought in '03 and ammortized over 5 years = $12,000/yr
'98 T800 KW = $20,000 bought in '07 and ammortized over 3 years = $7,000/yr
'95 T600 KW = $80,000 bought in '96 fully ammortized = N/C
TOTAL TRUCK COST = $42,000/yr

TRAILERS
'96 Scheltema double drop = $50,000 bought new and ammortized over 10 years is fully ammortized = N/C
'95 Reitnouer Al step deck = $25,000 bought in '97 and ammortized over 10 years is (almost) fully ammortized = $2,500
'99 Reid double drop = $50,000 bought new and ammortized over 10 years = $5,000/yr
'99 Lode King combo step = $10,000 bought in '06 and ammortized over 10 years = $1,000 (what a steal!)
'07 Wilson combo step = $43,000 bought new and ammortized over 10 years = $4,300/yr
TOTAL TRAILER COST = $12,800/yr

Liability Ins = $40,000/year
Cargo Ins = $6,000/year
IRP = $4,000/year
IFTA = $1,500/year
Maitenance = $55,000/year
Cell Phone = $4,800/year
Tolls not included
Fines not included
Employment ins drivers not included
WSIB for drivers not included
Benefits for drivers not included
Pension plan for drivers not included
load boards not included
internet not included
cost of 7,000 sq ft 3 truck garage not included

TOTAL YEARLY FIXED COSTS = $117,00/2006 mileage of 210,000 = $.56/mile

Fuel = .52/mile summer and .65 winter ($3.63/CDN gal and 7 mpg....winter is approx $4.20/gal and 6 mpg = .65/mile)

CPM SUMMER = .56 + .52 = $1.08 + driver
CPM WINTER = .56 + .65 = $1.21 + driver

A guy with 1 truck can make it I suppose, but when you add trucks, you become less efficient (utilization of equipment goes down and employees break stuff, you hav to pay drivers) and therefore cpm goes way up.

It's a tough racket.

Truck
2001 Western Star - Paid for
Truck Cost = $0.0
Trailer
2005 Great Dane Flatbed - Paid for
Trailer Cost = $0.0


Liability Ins = $6,200/year
Cargo Ins = $900/year
IRP = $1,200/year
IFTA = $36/year
Maitenance = $5,000/year
Cell Phone = $432/year
Tolls = $1,200
Fines = NONE!!!
load boards not included
internet not included


TOTAL YEARLY FIXED COSTS = $14,968/1 year mileage of 110,000 = $.14/mile

CPM SUMMER = .14 + .50 = $.64 + driver
CPM WINTER = .14 + .60 = $.74 + driver

[ncnewbie]

Wheweee! With those kind of numbers one could afford to take off a week a month and still live large! Where can I get one of those trucks with nothin owed on it??

Wheweee! With those kind of numbers one could afford to take off a week a month and still live large! Where can I get one of those trucks with nothin owed on it??

lol.....Work 9 to 5 your whole life, save some of your money then blow it all on a red truck.

[rank]

here we go again.

Truck..Paid for..Truck Cost = $0.0

BS

Trailer
2005 Great Dane Flatbed - Paid for
Trailer Cost = $0.0

BS

Maitenance = $5,000/year

BS.

All of our equipment is paid for in full too. Doesn't mean it's free.
You should be ashamed for implying that the cost is not there.

Second, you've been spouting off again lately about how easy it is to make a living trucking and forgetting to mention that you have no family at home. Having a family at home increases your costs, and lowers your earning potential....not to mention the stress and the guilt.

By all means, people, if you are semi retired divorcee with grown up kids and a big nest egg to blow on your childhood dream, go trucking for a couple of years to see the country.

I paid cash for my truck.

I paid cash for my trailer.

My maintenance costs were less than $5,000 for the past year.

I never said anything about family. Sounds like you got a bug up your azz.

[solo379]

Using "Steve's" math, my CPM is just $0.51cpm
Using "common sense" math, it's $0.80cpm
Somehow, i feel more comfortable, with the second number! :wink: