Solo's absolutely right. When figuring your true cost you must include either lease payments or depreciation, at least from an accounting and taxation perspective. If you're financing a truck, your costs are your depreciation plus interest expense. Your payments are irrelevant.

However, because everybody wants to treat their equipment cost and driver expense differently, it's just best to exclude those items when talking about operational costs for comparison. The other costs should spark a minimum of disagreement and make for a good comparison and guys can just plug in whatever driver/equipment costs they think they have after :roll:

 

But see here's the problem, using that method someone can be making money "on paper" yet the bank account keeps going down and down. The money going into that truck payment is locked into the truck. Your truck is not a liquid asset at all.

That's why I take truck payments at face value. Also, when the truck is paid off, now it has a ZERO operating expense. Yes it's still depreciating, but that's only meaningful for your net worth. The longer you keep it, the less meaningful depreciation is.

 

Alright I'll break it down for you guys:

National average fuel price: $3.10 (I get discounts)

$3.10 / 7.2 MPG = 43 CPM

Shop rental : $150/ month

$150 / 7000 miles = 2 CPM

Cell phone : $50 / month

$50 / 7000 = .7 CPM

45.7 CPM

What else ? Repairs/tires/maintenance probably runs about 7-8 CPM.

Brings me up to 53.7 CPM

Am I missing anything else? I plan on keeping the truck for 10+ more years, and it's paid off. Right now it might be worth 15k, so depreciation is meaningless to me. And if I wasn't such a lazy shit, those fixed costs would go down.

 

What else ? Repairs/tires/maintenance probably runs about 7-8 CPM.



That is a lot higher on some older trucks.Not that many trucks get 7.2mpg. You also forgot insurance,plates,permits,fuel tax,meals on the road.

 

Operating costs = cost directly related to running the truck. Cell phones and food may be necessary expenses while on the road, but they aren't required to move your truck down the road. While they should be budgeted for in your personal expenses, items such as these are not part of your truck operating costs.

 

Depends on how you take care of it.

Don't pay for that

See above

See above

Fuel tax is part of fuel expense, already accounted for

I don't consider this an operating expense, as I need to eat anyways.

 

Disagree on the first, agree on the second.

My cell phone is directly tied to my business. If I was not a truck driver, I wouldn't have a cell.

 

I would say my costs are about roughly 90 cents per mile including my truck payment.

BUT I get paid WAY more than you guys down south, as I average $1.60/mile + fuel supplement (currently about 16% of my gross) (total $1.86/mile), loaded or empty is the same rate for me. I average 15,000 miles/month, & in winter THAT is a very slow month, as I have had months as high as 18,000, my insurance & plates are flat rated at $1100/month, my fuel is my biggest cost, roughly $4.00/gallon (nearly $13,000/month with taxes... YIKES), my truck is new (2007), so repair costs are minimal (but, I do have a fund in which I put $1000/month into for emergencies), maintenance is about $700/month, I run the best tires I can, and am just ready to replace my drives (they have almost 300,000 miles on them and are getting pretty smooth!), but I budget to replace my tires after 1 1/2 years, so my take home is roughly 55% of what I earn.

And I only have to worry about my tractor, as I am leased on with a regional carrier & they worry about their trailers.

 

Understandable. In that case, you're right, you should definitely use it for your CPM calculations.

 

Perhaps you could be a little more specific as to the type of operation. If you are an owner operator who is leased to a carrier, your operational costs will be considerably different than someone who runs their own authority. Some carriers pay base plates, fuel taxes, etc., and may offer some discounts on fuel and shop rates if done in their facility.

If you are talking about someone who runs their authority, then the costs will be higher. If you run your authority, you pay for everything.