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Trucking's Operational Costs Continue to Rise

Discussion in 'General Expediter Forum' started by ATeam, Sep 23, 2012.

  1. ATeam

    ATeam Senior Member

  2. Humble2drive

    Humble2drive New Recruit

    Did you order the full report?

    Looks like this is for Carriers.

    " Fuel and driver wages (excluding benefits) continued to be the largest cost centers for carriers, together constituting 62 percent of the average operating cost in 2011."

    Is this relevant to Independent Contractors who do not pay drivers wages and who receive FSC from their carrier?

    Just asking before ordering the full report and subjecting my inbox to more spam.:)
  3. ATeam

    ATeam Senior Member

    Yes, I ordered the full report.
  4. Dynamite 1

    Dynamite 1 Moderator Staff Member

    as an o/o, you dont consider what you pay yourself as an operational cost of your business ?
  5. OntarioVanMan

    OntarioVanMan Expert Expediter

    you have to pay for a report to tell you this?.....just look around...everything is going up....BUT is your pay in proportion?....are you having to run more just to compensate?
  6. highway star

    highway star Seasoned Expediter

    Is this news? Or...

    Costs have been rising for decades and I suspect that will continue.
  7. skyraider

    skyraider Seasoned Expediter

    The average marginal cost per mile for 2011 was $1.71, the highest of the four years studied. After a sharp decline in fuel prices resulted in decreased industry costs between 2008 and 2009, industry costs have risen steadily through 2010 and 2011. Fuel and driver wages (excluding benefits) continued to be the largest cost centers for carriers, together constituting 62 percent of the average operating cost in 2011.


    Big rigs are expensive when you start running east to west and back on a regular
  8. davekc

    davekc Senior Moderator Staff Member Fleet Owner

    Yes....we all know that however based on the current rates of some carriers, they are pretending those increases don't exit.

    I will say, even taking wages and fuel costs out of it, regulations, higher truck prices and maintenance costs are steadily climbing.
  9. Humble2drive

    Humble2drive New Recruit

    Of course; however, that cost is different from a Carrier who must pay their drivers a promised wage and benefits and also make their profit goal and pay themselves.
    I just pay me, myself and I and since I am non union I have had good success negotiating favorable pay rates during tough times.;)
    Also, as an o/o I am in a better position to control certain operating costs like maintenance and repairs by hiring myself at slave labor rates.:cool:
  10. highway star

    highway star Seasoned Expediter

    Yup... Instead of a muffler worth $150, we now have a "system" that's something like $15,000 or some such a crazy figure.

    We need some hope and change!! I really hope that will change, but...
  11. Dynamite 1

    Dynamite 1 Moderator Staff Member

    no, its not any different. you pay yourself a set wage per week. if you are smart, your business pays for your health ins. also, your business has to make a profit. granted, you can control some maint. cost by doing work yourself but your business pretty much operates the same only on a smaller scale.
  12. Humble2drive

    Humble2drive New Recruit

    By using statements like "no, it's not" and "if you are smart" it appears that you believe that you have it all figured out. All of what you stated are business 101 options but not rules and different business owners have different goals.
    I do not need to pay myself a "set" wage, and I don't care to show a profit.
    Carriers don't often have those options. Especially if they are union, they are competing to attract more seasoned drivers or if they need to please stock holders.
    Why don't you just order the report instead of looking to school someone on your way of doing business?:confused:
  13. ATeam

    ATeam Senior Member

    Driving out of New York City today, Diane and I saw a Werner big rig company truck stranded on the right shoulder of I-95, and pulled up as close to the tall brick wall as one could get it. There was no more than an inch between the left side of the truck and the right hand traffic lane.

    Soon, a police officer would be along and he or she would likely order a tow truck to have that big rig removed.

    It costs thousands of dollars when such a tow truck comes and drivers are not given a choice or time to find a better deal. Because the team in the truck were company drivers, their pay will not be affected. Had they been owner-operators, a good portion of the year's profits would be towed away with the truck.

    When margins are getting tighter, the company driving option becomes more attractive.
  14. Dynamite 1

    Dynamite 1 Moderator Staff Member

    wasnt trying to school anyone on my way of doing business. i have never claimed to have it all figured out. spent the last 12 yrs. learning and will spend the next 10 doing the same. just making a simple observation on the way business in general is run and pointing out that the differences arent that far apart. i was simply making my statements on the fact you said you paid yourself. hence, leading me to think you paid yourself a set wage. my mistake, no harm intended.
  15. davekc

    davekc Senior Moderator Staff Member Fleet Owner

    I would tend agree. Even more so when looking at our fleet. The majority are all former truck owners. The upside is they have a very good working knowledge of what the operating costs are.
    Makes my job so much easier.:)
  16. ATeam

    ATeam Senior Member

    There is no charge for the report. It is free for anyone who orders it. It is delivered as a .pdf document to the e-mail address you provide.
  17. Humble2drive

    Humble2drive New Recruit

    This example doesn't make sense to me. Odd assumptions.:confused:
    The Werner truck driver would immediately notify dispatch who would locate a towing company that they contract with at a discounted fleet rate. At least that was how it worked when I drove company. Hundreds not thousands.

    As an o/o I would immediately notify dispatch. If on a load they would dispatch a tow truck at their discounted rate and even pay for the tow.
    If not on a load they would still dispatch a tow truck but I would pay the bill.
    If an officer stopped I would tell him help is on the way. My truck which is a straight truck would cost hundreds not thousands.

    Worst case scenario, The police insist on calling for a truck. It may cost*$2,000.00. That would be a small percent of my years profits and I would still net more than a company driver and be much happier to boot.:)

    Repairs, that's a different story. I have seen owners get hit with a $30,000.00 repair and be out of biz in a day.:(
  18. davekc

    davekc Senior Moderator Staff Member Fleet Owner

    Many areas on the east coast require tows only from certain tow operators. Since the tow companies know that, they charge outrageous fees. You just can't call a qualified tow company, it must be one licensed and permitted for that tow.
  19. Humble2drive

    Humble2drive New Recruit

    Understood. It seemed like "thousands" equalling a "good" portion of your profit was a bit of a reach just to make a point. Perhaps those rose glasses have faded?
    The increase in operational costs have resulted in a decease in profit for my business but thanks to you guys portraying gloom and doom back when I started my expectations and therefore my projections were low so it is all good still.;)
    Put $ in the bank during good times. Yes, I actually went to school and listened to you guys from the start acting on the good advise. Thanks for EO!!
  20. ATeam

    ATeam Senior Member

    I have heard of truckers being stuck with $15,000 tow bills in circumstances like those described above, and it is the police who choose the tow company, not the driver, truck owner or carrier. I made no reach here. $15,000 is a good portion of your profits even if your PROFITS are $300,000 a year (which no single-truck expediter makes), at least it is in my book.

    An expediter has to work hard to put $15,000 in the bank after expenses and taxes. Many expediters have less than that in the bank after an entire year of effort. One would have to reach deep into his or her pocket to pay a tow bill that high.

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