Over The Road Versus Local

[Chamberpains]

(05-27-2018 )Volvo8873 Wrote:  I do my own books and have a local tax service file taxes for me. I remeber the lady telling me that alot of the owner operators fuel bill was closer to %50 of their gross income. Is this true? Or did I not hear what she exactly said maybe?

Yes, you have to do the math and a mind numbing amount of truckers and companies operate at that and more. They go out of business fast or live very long miserable trucking lives. 12 years ago I made a very large spread sheet on the computer, showing in 5 cent increments, fuel prices compared to MPG to get my exact CPM (cost per mile) on fuel. Thats fuel price divided by MPG. It starts at $.50 all the way up to $10 per/gal. It's a quick reference guide to know what fuel is costing me at any fuel price. I made it so big because I knew fuel wasn't getting any cheaper and I had better be prepared to quickly adjust my rates and be ready for new and very large fuel prices. BE READY FOR IT OR GO OUT OF BUSINESS in short order.

So if your fuel cost per mile (FCPM) is close to your actual dollar per mile (DPM) then your in bad shape business wise. I keep mine below 33% as an OTR operation. But during the recession in 2008 rates customers paid compared to fuel costs didn't adjust quickly enough and I was forced to operate at 50% for a good year till i figured ways to get MPG up and maintenance costs down till the costumers and brokers could get the rates adjusted. But thats how a recession works on trucking. Now I operate my business like 2008 never ended and that keeps me miles ahead of the game during good times and also prepared for the next "hard time".