Funny, I knew of a guy over there that was their biggest fleet owner. Fella out of Texas, had about 75 trucks, all Petes. One day the paper on all his trucks got called in by Schneider Finance. Seemed he wasn't making his payments. Trucks were shut down at OC's all over the country. He didn't even bother bringing his drivers home. Maybe he "retired." Rumor was his wife had money and that's how he got his start. Can't vouch for the truth to that one though.

I thought about leasing trucks on with Schneider. But after running with them myself for almost a year, the numbers just didn't add up. These were my numbers from that year.

Rev. $1.08/mile all miles

Fuel .39 2.52/gal 6.4 mpg
Ins .04
Maint .04
Misc .03 (cell phone, scales, etc.)

This was for a team so the truck actually runs a little more efficient than a solo would, less DH, fixed cost spread out more, etc. Plus, no workers' comp. Brand new truck so my maintenance is lower than someone running an older rig.

That was on 175,000 miles. So, in the interest of simplicity, let's say a solo could do that at .42/mile. My FICA liability would be a little over .03/mile. That gives us driver costs of .45/mile assuming no benefits. That leaves me with .13/mile to cover a truck payment and profit. That works out to $1895/month. So I'd have two options. Go with new equipment and have no profit...not a great business plan. Or go with older equipment. I'd have a lower monthly payment and insurance but higher maintenance costs. I'd also have to worry about when I was going to get hit by a major mechanical issue which could suck up that difference in payments at one shot.

For me, the margins just weren't there to justify the gamble. For those that make it work, I applaud them. However, I think there are a lot more who think they're making it work than there actually are.

 

EXACTLY!

 

jp207, I don't see how the numbers come out at Schneider. You could just about double what you are doing currently if you leased to a carrier who pays percentage or got your own authority.

 

Then why go into business? This I don't understand, if you're not willing to be proactive, and don't want any headaches then don't go into business. I think some people see the dollar signs (whether imaginary or not) and think if they open a business it's automatic, well it's not, it's a lot of work.

Even an outsider (me) looking in can see these numbers don't add up, but I think GMAN made the point also, that you can make double that. So why work CHEAPER than you have too?

jp207, I would take full advantage of the knowledge on this board and put it to work. Just try one truck at a percentage carrier for a year and look at the numbers, it can't hurt. That's another good piece of advice about business, try different things. First you have to put yourself in a position where you can try different things without much risk but you should do it. 8)

 

Rosty, a guy that would put his trucks at a 90cpm carrier is not a businessman. He just owns some trucks and gave them to a business man so he could profit. 90cpm contracts only work if the freight is drop/hook both ends and the driver can maximize his miles everyday. When I was an Ops Mgr, I wrote a 90cpm contract and the company was yielding 48% off of those owner operators, the o/o was working for 52% of gross! Had they gone percentage, they would have made a heap more$

 

I'm just reading and trying to learn so take this the way I intend it. Seasonal fluctuation in rates is tremendous. Cents per mile, the lease on company absorbs those fluctuations. Percentage sounds like it would be better if you could shut your business down Jan, Feb and Mar.

When you get paid cpm, it doesn't matter if they deadhead you 300 miles past tons of good freight to service one of their accounts. You've got to watch out for the company deadheading you liberally for free on percentage.

I have plenty to do sifting through loads to keep one truck rolling on percentage- it's a lot of work. Weight, destination and length of haul, that's all you've got to evaluate on cents per mile.

No, it looks like the numbers do not add up at Schneider. But if you are going to run a lot of trucks, cents per mile would seem to be infinitely easier if you can find someone paying a rate high enough- and I understand maybe you can't.

Agree or disagree?

 

Cam- From what I see, specialized trucks make more money leased on percentage (specialized= flatbed, tanks, reefers, hhg, expedite, carhaul). Then dock bumpers (regular dryvans) could make more money running drop and hook or team and maximize keeping the wheels turning. The dock bumper theory overall doesnot work. Thats why so many drivers and small lease carriers go from company to company. This is a huge factor in driver turnover. As a truck owner, ask yourself, which one pays me more and preserves my equipment (whether for resale value or life of the truck). Also specialized carriers can get a higher rate, but there is some dryvan freight out there paying specialized rates, but you wont get it from a broker.

 

The per mile carriers have one benefit, stability. You know what you're going to be paid and you know, with a good amount of certainty, how many miles you'll get. This can work for someone that keeps a close eye on their numbers and really keeps their costs low, i.e. running older equipment, not paying benefits, etc. The trade-off for that certainty is you give away all of your upside potential. You constantly have to work to keep your costs within a certain range because you have no way of raising your revenues. If you make it through a few years with no major issues you're in a better position but the reality of the situation is still the same. New trucks are going to cost $10,000-$15,000 more. Did SNI raise their rates? Has anyone seen the price increases coming from the tire manufacturers in the next few weeks? How about shop rates or part costs? Sure you get a fuel surcharge but that does nothing to help with the rising costs in other areas. So if the base rate doesn't keep up you have to find ways to cut costs even more. What if you find a great driver. How do you keep that guy after a few years when you can't afford to raise pay any further?

To really make it at these carriers you have to do business just like they do. Cut your costs to the bone and make it on slim margins. The difference is that they have such volume that they can ride out any rough times. A fleet owner will have a much harder time. All the guys I talked to that thought they were doing well with SNI only looked at it from a cash flow perspective. They had no idea what they're balance sheet or income statement looked like.

Having said all that, I think it's a good place to start...but I won't go into all that :lol:

 

Sorry folks, been away from the comp running the other side of my biz..

I have seen a couple good arguements for both sides...And yes as a fleet owner for SNI (Or any per mile carrier)..You do have to squeeze everything you can just like the carrier does, that is correct..I have to watch my maintenance costs closely..I do some of my own work (I have a truck coming home right now to fix an oil leak, which I will do myself)..I'm not scared to get my hands dirty on a truck...That helps..Cheapest labor I can find is $70/hr..It all helps..I can offer benefits to my drivers, again this is thru SNI's group plan..They pay 100% of the cost though. But yes, cut costs, cut costs...To the person who says I'm not a business man..You don't know my situation, my background...Are you running 2 businesses right now, both of which are putting food in my belly, a roof over my head and some extra change in my pocket at the end of the day?

It works for me becuase I am earning about 75% of my living income from this venture....Some weeks its 25% (like this week for example, becuase my other biz cleared $1200 this week, already)...Some weeks it's 100%..I make it work..I don't have all my eggs in one basket and I have a cash reserve for the day I get the phone call "Uhhh, there is a hole in side of the engine block, what do I do??"...Every single persons situation is different and this is a good example of this..

I may consider in the future going to Landstar or even since I am based out of FL doing produce out to Cali and back...But right now I'm staying where I am...Why fix what isn't broken??

Speaking of that...The sugar truck is doing quite well...