| As a company driver, what driving habits should I develop before buying my own truck? |
| 04-12-2020, (Subject: As a company driver, what driving habits should I develop before buying my own truck? ) Post: #19 | |||
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RE: As a company driver, what driving habits should I develop before buying my own truck? (04-12-2020 )JimT Wrote: Man, this is a perfect example of why these newer engines have so many problems and such a short service life. Inexperienced drivers who are NOT being taught No I appreciate the ramble. I have been driving on my own for about 2 months now and have $3,000 in savings. I plan to have $16,000 in savings by August when I am capable of leasing on here at 6 months. I’m looking at 3rd party leases and my payments would be $1,100-1,400 a month compared to $2,800 a month leasing on here. The only reason I have considered leasing on here is because my trainer was a lease operator and I already know how it works and he is about as brain dead as they come and he is successful and I’ve talked to other drivers that are successful as well. It doesn’t pay the same as leasing on elsewhere or getting my own authority but it’s a start, it’s something I’ve seen with my own eyes, and I’m just doing to make more money to save up for something better. I was considering a leased truck here but now that I think of it I won’t be staying leased on here for 3 years to complete the lease so it would be pointless. I drive slow. I drive at nights or early mornings as well to minimize delays and braking and unnecessary lane changes avoiding traffic. I will drive 58-59 empty but bump it up to about 62-63 loaded because 58-59 is right at 1200RPM and it’s just constantly giving a lot of throttle and boost to maintain that speed at 80K. | |||
| 04-12-2020, (Subject: As a company driver, what driving habits should I develop before buying my own truck? ) Post: #20 | |||
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| RE: As a company driver, what driving habits should I develop before buying my own truck? your still not learning....obviously got all these floppy eared rabbits and rainbows in your head thinking youll make it with less a year experience and buying your own equipment.... if you have a cummins it should only see 1200 RPMs when taking off from a stop and never again untill its come to a stop and its time to take off again. i find it funny you think that leasing your truck is just 1400 a month....lets just say the company atleast pays for cargo insurance you still have your trucks insurance of bobtail and liability lets just say thats....500 a month. now you have fuel lets say your lucky being a complete rookie to get 6.5MPG maybe squeek 7 thats still gona be a few more grand per month... OH wait then theres maintenace proper maintenance should be about 400-600 every other month for oil changes/grease unless your do the work yourself might save couple hundred but your lease company wont let you i gaurentee it. and then every 6mo you need a DOT inspection. then every year you have around 1000 for just truck plates and your going to pay for this with 1.00-1.35? freight i doubt it you will be forced to live in that truck on the road to keep your head above water. that 2800 company lease probably also creates a maintenance account and covers insurance and every other cost including IFTA filings also that trainer probably isnt as braindead as you think hes taking on trainees and probably getting a hefty bonus to do so as i would wrather burn my truck to the ground then share it with someone i dont know and i have to babysit. User's Signature: 2010 Lonestar - CM871 - 13sp - 3.70s, 2016 T680 - cm2350 - 13sp - 3.36s - skateboarder | |||
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| 04-12-2020, (Subject: As a company driver, what driving habits should I develop before buying my own truck? ) Post: #21 | |||
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| RE: As a company driver, what driving habits should I develop before buying my own Ok, this is long because I decided to throw out some numbers for you to consider. Don't think these numbers are in any way accurate or even typical (the rate per mile is probably higher than most people see). But they can give you a starting point to think about. Fiddle around, try different numbers. When in doubt, always budget high. Don't think I'm trying to scare you. I wish someone had laid things out for me like this before I jumped in to this game. Information always helps. Well, you sound like you want to learn how to do things right. Just don't make the mistakes that so many others make by jumping in to ownership too early. It's much different than being a company driver and it's not all fun. Not that I'm trying to dissuade you, just seen plenty of people get caught up in the desire to own their own truck before they even understand what that truly means. Also, if you have less than a year experience in this industry as a driver then you have a very limited understanding of how things really work. I would highly suggest you get some experience at 2-3 other companies. Big or small, you will start to see some of the diversity that makes up this industry. Dryvan, refer, flatbed, intermodal, heavy/specialized. These are all very different in so many ways. Even Local, Regional and OTR have very large differences and can seem like night and day compared to each other. Simply driving the truck is only a small part of the overall job. Remember, leasing a truck in any form is a type of ownership. Companies might make it seem easy and painless or "risk free" but ownership is ownership. There is always risk. Even the most well cared for engine can have a catastrophic failure AT ANY TIME. Warranty sounds like a great solution but it doesn't always cover what you need and it rarely ever covers your loss of income. One other thing that I found useful when I was getting in to business was this tidbit about budgeting: A driver typically earns about 25% of the total revenue from a load. Some companies that are really well managed get that number up to about 30% and some of the mega-fleet may get that number even higher. But as an owner-operator you can expect to fall in to the 25% range. That means, roughly 25% of what the customer pays to move that load will be the driver's income. Fuel will probably run somewhere in the 25% range. Another 25% will probably come off the top as the Carrier's percentage. That leaves about 25% for ALL other expenses, including maintenance and taxes. Now, lets think about that in cents per mile (since that's what the industry is obsessed with). Lets say you're making $.50/mi as a company driver. To achieve the same income you would need to have roughly $2/mi freight. Your carrier will get about $.50/mi right off the top. Your fuel costs would need to be less than $.50/mi (which is roughly 6mpg with fuel prices at $3/gal). Of course better fuel mileage will result in more profit, but there are many factors that result in your fuel costs, including maintenance and market prices, so you have to budget for a high cost. Ideally maintenance costs would only run you about $.15/mi but until you get a truck running perfectly you're more likely to see $.25/mi or more. Unless you have very regular and consistent miles every week/month then many of your costs will be hard to estimate as a cost per mile. Take your truck payment for example. Either weekly or monthly payments. Lets go with the big number you mentioned, $2800 / month. That's about $700 / week. If you run 3,000 miles per week at $2/mi then, after carrier % and fuel estimate, you get $4500. Now subtract another $500 for settlement deductions (this amount will vary with each carrier) and maybe another $500 for some sort of escrow (again, this will vary, or be nonexistent). That brings you down to about $3500 / week. Fuel is handled differently depending on your carrier, but the cost doesn't change. Again, budget high at $.50/mi and you're looking at $1500 / week. Now you have about $2000 left. Subtract your truck payment of $700 / week and you're left with about $1300. Put aside $.25 / mile toward all future maintenance costs and that's another $750. Now you're down to $750 / week for your personal bills, savings and taxes. Now, let's say taxes run you about 11% of your gross income... That could end up being as much at $495 / week! Hopefully that number is higher than you end up paying, but this is just an estimated budget based on very rough numbers for income and expense. Now, imagine if your truck payment was half at only 1400/month... or maybe you're maintenance expenses were more than $750 a week... or your mileage or RPM were different. Oh, don't forget to budget for time off. There's no such thing as PTO unless you save up in advance. Let's say you take 2 weeks vacation and an average of 10 standard holidays (that's 2 five day work weeks). Now add at least 1 work day per month for basic scheduled maintenance. That's another 12 days, we'll round that up to 15 days or 3 additional work weeks. So, you're only going to work a maximum of 45 weeks per year (assuming you don't have any unplanned downtime). Soooooo, if you manage the numbers mentioned above you will have something like this for the year: 3,000 miles per week @ $2 / mi = $6,000 / week 3,000 miles / week x 45 weeks = 135,000 mi / year If your contract says you get about 75% of that (or less!) = $4,500 / week Gross income is $4,500 / week x 45 weeks = $202,500 / year Your fuel cost is $.50/mi: 3,000 mi/week x .50/mi x 45 weeks = $67,500 / year in fuel costs Basic Lube/Oil/Filter PM (10,000 mi interval because of a 6mpg fuel) @ $400/service = about $5400 / year Overall maintenance costs @ $.25 / mi is $33,750 / year (135,000 mi) $33,750 - $5,400 = $28,350 in non-PM maintenance OR Overall maintenance costs @ $.15 / mi is $20,250 / year (135,000 mi) Tractor Payment @ $2800 / month = $33,600 / year Income Taxes (total) estimated @ 11% of gross revenue = $22,275 Gross income = $202,500 Settlement Deductions = - $3,000 Fuel = - $67,500 Maintenance = - $33,750 Tractor Payment = - $33,600 Taxes (Income) = - $22,275 ------------------------------------- Total Personal Income before taxes = $64,650 Total Personal Income after taxes = $42,375 Oh, did you want health insurance too? Well, THAT'S gonna change things! That is super simplified and what I would consider as a best case scenario, based on running maximum miles at a generous rate per mile. At the end of the day, best case, you end up with roughly the same amount of money as an experienced company driver (at least that's what local company drivers average up here in the northeast US). Now lets look at some of the maintenance costs you might see in a given year: Shop Labor: $100 - $150 / hour Roadside Assistance: Time + Mileage and/or flat $150 roadside charge in addition to cost of parts and labor Roadside flat tire repair (umount, patch, remount): around $350 Towing: this I'm not sure about typical costs, but the 1 tow I had was 3 miles, I was about 70,000lb gross and it cost me about $850 Tires @ about $500 each for good tires, maybe as low as $350 each for cheaper tires (you get what you pay for) Various Sensors: $20-$150 each New Windshield: $450 New Batteries: 3-4 batteries @ $250-$300 each DPF/Aftertreatment repairs: $1,500-$15,000 (depends on how many parts get replaced before the problems magically fix themselves) Someone chime in with other stuff, that's all I had off the top of my head. User's Signature: "...And as we wind on down the road, Our Shadows taller than our Soul..." | |||
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| 04-13-2020, (Subject: As a company driver, what driving habits should I develop before buying my own truck? ) Post: #22 | |||
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RE: As a company driver, what driving habits should I develop before buying my own truck? (04-12-2020 )JimT Wrote: ... I’ve ran some numbers on different scenarios and tomorrow I’m going in for a PM surprisingly so I will get my laptop out and give a detailed list of what I’ve came up and will share with you. It was pretty similar. The thing is most maintenance I can do on my own. What can’t do is because of the lack of a shop and specialized tools. I worked for the state for 3 years and everything was pretty much fix it yourself from wood chippers to chainsaws to One Ton 6.0 Duramaxes to old International straight strucks with Cummins motors. And I also have virtually no expenses. I have no mortgage, no car, no kids. I’m just choosing this walk away lease option because I have really nothing to lose but time. And if it works out and I do keep the truck then I will get my own authority and have fun messing with brokers | |||
| 04-13-2020, (Subject: As a company driver, what driving habits should I develop before buying my own truck? ) Post: #23 | |||
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| RE: As a company driver, what driving habits should I develop before buying my own truck? Why start in August? Unless you live and will run in the warm part of the country. Doing work outside on the truck when its 25 degrees F is not as fun as it sounds. Build up your money, refine your driving, listen to these guys about the numbers then do this next spring. | |||
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| 04-14-2020, (Subject: As a company driver, what driving habits should I develop before buying my own truck? ) Post: #24 | |||
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| RE: As a company driver, what driving habits should I develop before buying my own truck? This guy sounds like he is hell bent on jumping in the deep end of the swimming pool and he does not even know how to swim yet. -- Ain't no life-guards in trucking. Most any company willing to push a less-than-1-year rookie into a lease deal, there is something serious wrong with them. Operating and insurance costs are 3x more than normal for drivers with less than 3 years driving under their belt,... and every bit of those costs are pushed onto their slaves. -- If that lease falls into one of the 19 categories I have listed in my book,.. you would be best to run like hell away from that company... Rawze Wrote:Spotting bad lease-purchase deals is not easy, but if you do not learn to spot them, and you end up in one, you will not be successful. Here is a list of some of the things you need to avoid the most... READ all of chapter 3 in my book. User's Signature: ->: What I post is just my own thoughts and Opinions! --- I AM Full Of S__T!. | |||
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| 04-14-2020, (Subject: As a company driver, what driving habits should I develop before buying my own truck? ) Post: #25 | |||
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RE: As a company driver, what driving habits should I develop before buying my own truck? (04-13-2020 )DVT873 Wrote: Why start in August? Unless you live and will run in the warm part of the country. Doing work outside on the truck when its 25 degrees F is not as fun as it sounds. Build up your money, refine your driving, listen to these guys about the numbers then do this next spring. Very good point. More reasons why you might want to wait, besides your own experience level: - Covid-19 economic impacts: Things are really shaken up right now and it's impossible to predict when and how things will rebound. Some trucking segments may flurish while others could see a year of rates dropping close to $1/mi due to lack of demand. - Seasonal ups and downs: Different segments have different busy/slow times. Flatbed is typically busy mid-spring through mid-fall. Reefer tends to ebb and flow with different harvest seasons across the country. One area could be great while the other side of your load is completely dead. Dryvan is typically dead between January and March, with a peak season of August through early December due to the seasonal cycles in the retail sector. Specialized/dedicated carriers may see more consistency year round (depending on the industry being served). Generally speaking though, the winter months (mid-December through mid-March) are the slowest across the entire industry. - Supply and demand: Together with the points above and the entire global economy as a whole, trucking is completely dependent on supply and demand. Low demand and a high number of available trucks leads to lower rates. OO's and small companies typically have a higher cost of operation compared to larger ones with more resources. That means the big guys can usually push through the bad times without drastic changes, but the OO's and small companies are more sensitive to these changes. OO's are the cushion on the industry. When things are busy we take up the slack. When things take a down turn we are the first (big companies included) who see less work being available. We provide relief for capacity changes that can't be predicted. Kinda like the expansion tank on a boiler system. As an OO you need to build up some cushion to weather these slow times. It's not a matter of if, it's just a matter of when and how long. Based on your comments, the longer you wait the more money you can save up. The more money you start out with the easier it will be to weather whatever storms come your way. Also, it's likely we will see a very unusual market this year due to Covid-19 disruptions and the after effects. There's a good chance that 6-12 months from now you will see an excess of used trucks hit the market, many sold off due to shutdowns or downsizing. That provides a nice opportunity to seek out a well cared for truck that wouldn't normally have been sold. Plus, once things cycle around the surge in demand will stretch the downsized capacity and help boost rates across the board. I'm not an analyst and I don't put much stock in them, but I'd wager that next Spring will see some level of growth/high demand/boom for trucking. May not be as big as we saw a few years back, but generally positive across the board. --- On the flip side, if this pandemic leads to some major long term economic devastation (in the US or in countries that we depend on), then come Fall-Winter we could enter a couple years of global economic depression, which would be really tough to try to start a new business or sustain a young business. Bottom line, take your time, don't rush. And save up as much capital as you can before jumping in to anything. User's Signature: "...And as we wind on down the road, Our Shadows taller than our Soul..." | |||
| 04-14-2020, (Subject: As a company driver, what driving habits should I develop before buying my own truck? ) Post: #26 | |||
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| RE: As a company driver, what driving habits should I develop before buying my own truck? I definitely wouldn't be buying in to the Owner Operator gig at this time and definitely not come August. That is prime dead time for all trucking. Seasonal freight is dry, harvest seasons aren't goin on, no pre holidays rush, construction is in full swing but equipment and supplies have already been delivered... etc... etc.... mid summer is crap. If I were the OP I'd wait to see what the fall out of this economic crash is and then see if the segment of trucking he wants to get into is going to survive without a loooong hard pull up out of the hole. And as it looks now, every segment of trucking is gonna be a bit sketchy till the factories get fired off and orders get placed again. I made the mistake of buying in at the worst time just before the housing market crash in 2008. It took 2-3 full years to stay afloat (and I mean barely afloat) and another couple of years to figure out how not to run myself into the ground. And that's a horrible habit to have. It'll not only kill you, it'll kill all of your equipment because all you'll have time for is to abuse the equipment and then neglect it because your to tired to fix it properly. I'd recommend to the OP to put off the dream till at least early spring next year. Let the economy settle. It really took a shock and only experience will get guys through these rough times. Take this year to figure out how to make your current piece of equipment profitable. See if you can figure out how to get the highest fuel mileage with the lowest amount of time in the shop fixing things. GET GREAT AT IT, not just good. Start keeping records of the expenditures of the truck. This is very valuable information. And do as much of your learning on someone else's dime with someone else's equipment. By early spring (late February-march) you'll have a full year of thinking and trying to be an Owner and all the mistakes you ARE gonna make will be on someone else's equipment. MISTAKES COST A LOT OF $$MONEY$$ | |||
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