Cutting cost vs. increasing revenue

[lowrange]

That's kind of my point. What I am saying has nothing at all to do with tax law.

If, after you pay all your bills and "pay yourself" a fair wage to drive, you still have money left over, then you have shown to yourself that your trucking business has just turned a profit. If you have no money left after you pay your bills and pay yourself, you do not a have a trucking business, you have bought a job.

It's like Allan5oh said, it's largely a matter of semantics and it's been debated extensively here before. That debate could be repeated here now, but it's already been done. Besides financial issues, there are quality of life issues that are different between O/Os and company drivers. Everyone will have his own ideas about what those quality of life issues are and what they are worth.

Really, you can think of it both ways, and it's probably helpful to consider it from both angles, too. Just, when you're having a conversation, everyone needs to know which 'paradigm' is prevailing in that conversation.

Back to the subject of revenue, the O/O maximizes revenue with his one truck, and then what's next? Beginning to add trucks is one obvious route, are there any others? Let's say an IC gets a trailer and gets his own authority and even gets his own customers, that's pretty much the end of line, right? After that, if you want more money, it looks like you need a second truck.

Rutherford claims that ICs often do as well as guys with their own authority. Is there any magic formula for maximizing profit off a single truck?

[allan5oh]

I'm not pretending it's all roses. I make about $1.32 + FSC right now, but I had to buy a trailer and now I pay insurance. That's $1500 a month.



The trailer payments and insurance on my trailer are 750.00 a month. 500.00 a month on the trailer and 250.00 for the insurance and that insurance includes my truck too. What is your FSC? .20cpm? I averaged .23cpm more than that and I still don't think it is enough. Unless you run over 120k miles a year the .15cpm difference versus not having a trailer and dealing with it's headaches would be better.

Trailers are pretty low maintenance IMO.

overall the difference is 30 cpm, but then considering after cost it is 15 cpm or so. I pay insurance whether or not I own the trailer.

[allan5oh]

Is there any magic formula for maximizing profit off a single truck?

Yes. Haul the biggest ugliest freight you can find.

[lowrange]

Yes. Haul the biggest ugliest freight you can find.

Well then, what's bigger and uglier that 45,000lbs of snot (a tanker thing)!? I guess I'm there, then.

Nah, I'll probably do the best I can with one truck and leave it at that. Quite honestly, getting rich hasn't been a goal of mine for many, many years. After getting as much as I can out of one truck, growth for me will more likely entail repenting and getting closer to the Lord.

[GMAN]

You are much better off just having one truck unless you can go out and buy several. It is difficult to make a profit with a couple of trucks when you have drivers. Finding quality drivers is challenging. It is getting better with the economy, but drivers move around. That creates a challenge for the small operator as does a driver who doesn't take care of his equipment. If you decide to buy more than one truck you need to be realistic about your expectations.

[lowrange]

You are much better off just having one truck unless you can go out and buy several. It is difficult to make a profit with a couple of trucks when you have drivers. Finding quality drivers is challenging. It is getting better with the economy, but drivers move around. That creates a challenge for the small operator as does a driver who doesn't take care of his equipment. If you decide to buy more than one truck you need to be realistic about your expectations.

That's good to hear coming from someone who knows. I seem to be near the end of the line as far as what you can do in this profession. I have no intention of climbing the heavy hauler hierarchy. Tankers don't own their own trailers or operate in their own authority. And, for the van guys who do have their own trailers and authority, I'm not convinced they're doing better than the contractors- maybe, I guess. I'd like to hear more from the small fleet owners on the board and whether or not they think it's worth it.

[solo379]

I seem to be near the end of the line as far as what you can do in this profession.

Don't worry, judging on your previous posts, you still got long ways to go! And even when you are at the "end of the line", it's still an everyday challenge to stay there, trust me!
And i absolutely agree with Gman, about "second truck issue"....

[GMAN]

I am fortunate that I don't have big equipment payments. When the economy is down you can make money hauling cheaper freight as long as you don't have to pay a driver. I would suggest you buy at least 3-5 trucks as quickly as you can economically do so. There are several reasons why I would suggest this action. First is driver turnover. It isn't always easy to find a qualified driver to put in your truck. If you only have 2 trucks and lose one driver then your income drops 50%. If you have 5 trucks and one sits then 20% of your income drops. Economies of scale can also help you on things such as fuel discounts. You may not qualify for deep discounts but some truck stops such as Flying J will give you a discount on monthly fuel purchases. It is much easier to qualify for those discounts with 5 trucks than 2. You may also qualify for discounts on parts at stores such as Fleetpride or even some dealers. When you buy more than one truck it is difficult to drive yourself. Unless you are a good manager and like to dispatch you may not want to get into buying trucks.

[lowrange]

Don't worry, judging on your previous posts, you still got long ways to go! And even when you are at the "end of the line", it's still an everyday challenge to stay there, trust me!
And i absolutely agree with Gman, about "second truck issue"....

I don't mean knowledge in the profession, not at all. I'm talking about earnings, owner operators make just so much. Oh, I know about Brian in the oil fields, BanditsCousin hauling specialty freight, etc., etc., there are certain gigs that only a few will get that pay large, but I'm not living my life to position myself to be one of the chosen, and to do whatever it takes to keep such a coveted position.

For instance, let's say you had a goal to make $200,000 net profit before taxes doing something, and many Americans make that much, you couldn't do it with one truck. Take Rutherford, the guy must make millions, or at least that's where he's headed, he didn't get there by simply staying within the box. With the things he knows and the abilities he has, there are so many ways for him to make money he has to choose which pitches to swing at. Apparently, large companies have offered him executive positions to come onboard and lead them in the things he's teaching. He didn't want that, he wanted radio for whatever reason. Now, he's releasing a constant stream of products from teaching DVDs to Signature trucks.

I couldn't do all of that, but I've got family who are doing well in real estate. I'm just saying there are many possibilities in life, but you're going to do just so much with a single truck. I'm personally not inclined to buy more trucks and manage drivers, so, I don't see a lot of growth potential for me unless it's in some other field. As I've said before, the money with one truck may be sufficient for me, and the time alone in the cab to listen to books, to think and to pray may be my best opportunity for growth- just not necessarily financial.

[lowrange]

I am fortunate that I don't have big equipment payments. When the economy is down you can make money hauling cheaper freight as long as you don't have to pay a driver. I would suggest you buy at least 3-5 trucks as quickly as you can economically do so. There are several reasons why I would suggest this action. First is driver turnover. It isn't always easy to find a qualified driver to put in your truck. If you only have 2 trucks and lose one driver then your income drops 50%. If you have 5 trucks and one sits then 20% of your income drops. Economies of scale can also help you on things such as fuel discounts. You may not qualify for deep discounts but some truck stops such as Flying J will give you a discount on monthly fuel purchases. It is much easier to qualify for those discounts with 5 trucks than 2. You may also qualify for discounts on parts at stores such as Fleetpride or even some dealers. When you buy more than one truck it is difficult to drive yourself. Unless you are a good manager and like to dispatch you may not want to get into buying trucks.

Are your trucks sitting right now, Gman?

See, I've often longed for a place big enough to park a truck and a trailer, but I don't have it. I definitely don't have a place big enough to park a small fleet and have my own shop. Add to that all the paperwork. I don't have a spouse at home to handle a lot of that, and I'm not organized enough to keep my own truck on the road and do all of that, too- fuel taxes, hiring drivers, making payroll, finding loads...Man, it's so much! Is anyone able to do that without at least a spouse working full-time anchoring things at home? Nah, I'm not in a position to expand. But, it's still interesting to hear from those of you who have and how you've done it.

[GMAN]

One truck is sitting. I am trying to find a driver. Another is sitting more than I would prefer. I won't run my trucks for less than it costs to operate and make a profit. There are loads this morning for as little as $1/mile or less. Some poor guy will likely take them eventually. Some seem to fly off the boards about as quickly as they are posted. Some people with whom I deal don't always post their loads, but even those are cheap compared to what we have been accustomed to seeing. Some people have a choice of taking a load that pays little or no profit or sitting. Personally, I prefer sitting if I can't make something on a load.

[GMAN]

Are your trucks sitting right now, Gman?

See, I've often longed for a place big enough to park a truck and a trailer, but I don't have it. I definitely don't have a place big enough to park a small fleet and have my own shop. Add to that all the paperwork. I don't have a spouse at home to handle a lot of that, and I'm not organized enough to keep my own truck on the road and do all of that, too- fuel taxes, hiring drivers, making payroll, finding loads...Man, it's so much! Is anyone able to do that without at least a spouse working full-time anchoring things at home? Nah, I'm not in a position to expand. But, it's still interesting to hear from those of you who have and how you've done it.

It helps to have a spouse help with the paperwork and to hunt and book loads. Finding decent paying loads is a full time job in itself. I know a number of owners who got rid of their authority and lease to another carrier just to get rid of the paperwork. Some people make as much or more leasing to a carrier as they would running their own authority. You need to be very organized to run this type of business. In fact, any business requires a certain amount of organizational ability. It should not make any difference which way you decide to go. It is less stressful for some to lease rather than run their authority. Just do what makes you most comfortable. Whichever way you can enjoy what you are doing and make a good living is the way to go.

[lowrange]

It helps to have a spouse help with the paperwork and to hunt and book loads. Finding decent paying loads is a full time job in itself. I know a number of owners who got rid of their authority and lease to another carrier just to get rid of the paperwork. Some people make as much or more leasing to a carrier as they would running their own authority. You need to be very organized to run this type of business. In fact, any business requires a certain amount of organizational ability. It should not make any difference which way you decide to go. It is less stressful for some to lease rather than run their authority. Just do what makes you most comfortable. Whichever way you can enjoy what you are doing and make a good living is the way to go.

I appreciate it, that's what I thought. I don't know how many O/Os I've met whose wives evidently know more about their numbers than they do. As long as I'm operating a truck, I won't try to put on another. The subject is 'increasing revenue', and it looks like we've gone over a lot of the options.

So, even in today's climate, you're trying to keep all your trucks running?

[solo379]

I'm talking about earnings, owner operators make just so much.

Yes! But the main question, you should ask yourself;-Am i comfortable with it? If answer is "Yes", that solves the problem. If "No", than go ahead, explore the opportunities. Just remember,-There is no such thing, as a free lunch.

[lowrange]

Yes! But the main question, you should ask yourself;-Am i comfortable with it? If answer is "Yes", that solves the problem. If "No", than go ahead, explore the opportunities. Just remember,-There is no such thing, as a free lunch.

I was hoping I could come live with you and sleep on your couch...

[solo379]

I was hoping I could come live with you and sleep on your couch...

Anytime! But didn't i just told you about "free lunch"?

[lowrange]

Anytime! But didn't i just told you about "free lunch"?

Doesn't sound like much of a vacation, Solo. I'll pass.

Hey, are you back to work yet?

[solo379]

Doesn't sound like much of a vacation, Solo. I'll pass.

Hey, are you back to work yet?

Not yet, couple more weeks, may be....

[allan5oh]

Not yet, couple more weeks, may be....

Is that your morning breakfast, before doing 700 miles in a day?

Wouldn't trust you on my six that's for sure!

LOL, just kidding good buddy.

[lowrange]

Is that your morning breakfast, before doing 700 miles in a day?

Wouldn't trust you on my six that's for sure!

LOL, just kidding good buddy.

He isn't doing jack.


Debonair, Solo, looks like a good life! What kind of cigar is that?