Updated: Oct 3, 2020
Here are some rough numbers to show how much it really cost to run a truck.
Let’s take a single O/O with new authority and a dry van trailer, who will run 100% brokered load board freight (that’s how the majority of people start out, right?). Let’s say this guy (John) has a family and wants to be home every weekend to have somewhat of a normal life, so he will work Monday-Friday.
1. Truck payment of $1,500 per month (with good credit)
2. Average truck/trailer yearly maintenance/repair bill is $25,000, so let’s say $2,000 per month
3. Trailer payment $600 per month. Yes, you should get a brand-new trailer. Running a used one will cost you the same or most likely more, when you calculate the repairs and downtime
4. Insurance for the first year will be $12-16k, so let’s say $1,200 per month
5. Driver salary (pretend you are an experienced company driver and you make $72k per year, so $6,000 per month.
6. Fuel $5,000 per month
7. IFTA, plates, parking, misc expenses $1,000 per month So we have $17,300 in expenses.
8. Now for being a business owner and all the headaches, you deserve another $1,000 per week, which makes it $21,300 per month, I will round it up to $22,000. $22,000 per month, means you need to gross at least $5,500 per week, or $1,100 per day. You have to figure out lanes/rates and how to make that amount every 5 working days and be home for the weekend.
9. Factoring – Avg. 3% of each load
10. Trucking Dispatcher – Avg. 5% to 10% of each load
If everything goes as planned, John will make $120,000 per year and be a happy camper.
Of course things never go as planned. John takes time off to spend time with his kids, some repair downtime adds up and now gross revenue starts shrinking. John is lucky if he does all his repairs at home, that’s usually cheaper. If his 500k Cascadia starts having DEF problems on the road and a truck dealer charges him $6,000 to fix it, on top of the $1,000 towing bill, his maintenance/repairs budget starts having problems. It’s not uncommon for a new O/O to dump $40k into his truck during each of the first couple years of ownership. One of the worst scenarios is complete engine failure and a few months of downtime.
Now think if you have a tough enough skin to deal with shark brokers every day, make your revenue goals and deal with all the headaches of owning this business. Remember, in busy months you have to gross much more, than $5,500, because in the slow season you might be working only couple of days per week and only do $2-$3k. It means you have to play constant poker games within the spot market. You have to be ready to talk to 50 people per day, constantly hear "NO" for an answer, be very resilient to stress and be very efficient with time management.
Jay Schmidlapp | President