Making Money in Expediting

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guest

Guest
Since layoutshooter and the A-team seem to be the designated experts on here, I would like to ask if it is unreasonable to expect that an experienced, motivated team with over 50 years combined experience as owner-operators could manage to gross $250,000 a year? We are not temp-control, but have every other imaginable option and equipment. Our in-service percentage is over 80%, but in our first full year of expediting it looks like it's going to be a struggle to hit $200,000. This is a great job for retired military people or anyone who already has a pension waiting for them, but we're starting to wonder if it still has the potential we thought it would.

Mike & Cindy
 

LDB

Veteran Expediter
Retired Expediter
I just triple checked my double checking and nope, no designated experts here, especially not me. Having cleared the misconception of who the experts are or aren't let me comment on what I see as another misconception. I believe $250k gross is possible but Difficult to obtain. I believe your projected $200k gross is more realistic. I know at least 3 or 4 who will post disagreeing with me and that's fine, that's what this place is for. I just wouldn't suggest or encourage anyone to make decisions based on a 98th percentile figure like $250k.

Leo Bricker, 73's K5LDB, OOIDA 677319
Owner, Panther trucks 5507, 5508, 5509
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
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Support the entire Constitution, not just the parts you like.
 

RichM

Veteran Expediter
Charter Member
Mike just curious what or who gave you the impression that you could gross $250 k in a year with one truck.Even 200 is difficult,no time off,no breakdowns,etc. Care to elaborate.
 
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guest

Guest
We were making close to $150,000 each running 2 tractor/trailers, so I personally feel it's a waste of time for a team to be out here if they can't make close to $250,000. We had several months last year of $20,000-$25,000 as newcomers to expediting (started as a team in mid-July), so we were hoping to have a great year in '06. But with the advent of the new FedEx freight network, it seems good-paying long loads are few and far between, and we're sitting around waiting for loads that are no challenge for a team. Running a lot of miles cheap isn't the name of the game. We don't mind sitting some if there's a good load in the end, but it just isn't happening this year.

Mike & Cindy
 

davekc

Senior Moderator
Staff member
Fleet Owner
I have to agree with the others. That 250k will look much less once the rose colored glasses are removed in light of current events.

Sorry, but that is my penny in the pond.






Davekc
owner
22 years
PantherII
EO moderator
 

ATeam

Senior Member
Retired Expediter
I agree with Leo on two points:

1. What he said about designated experts.

2. What he said about $250k and $200k.

Based on our personal experience, Diane and I do not expect to gross over $250,000 a year in our CR-unit; at least not our first year out in that truck. We've already had too much down time to realistically expect that amount. While that number is in theory within reach if everything goes right, everything does not go right in this business.

You did not mention the kind of truck you drive (CR, DR, ER). At the risk of stating the obvious, similarly-equipped D and E-units drivin by similarly-credentialled teams have more money-makig potential than C-units because of their freight-capacity advantage. They can carry everything a C-unit can, and more.

You said, "We were making close to $150,000 each running 2 tractor/trailers, so I personally feel it's a waste of time for a team to be out here if they can't make close to $250,000. We had several months last year of $20,000-$25,000 as newcomers to expediting (started as a team in mid-July), so we were hoping to have a great year in '06. But with the advent of the new FedEx freight network, it seems good-paying long loads are few and far between, and we're sitting around waiting for loads that are no challenge for a team."

In our three years of team straight-truck driving, we have had several loads that paid over $5,000, but those are not the loads you count on to produce a good month and year. $500, $1,000, $1,500, $2,000 loads are far more common. The big-paying loads are nice when they happen, but they do not happen often. More than the occasional home run that comes your way in expediting, it is the singles and doubles that add up to a good month.

I've met drivers who believe good teams should get good team loads. Diane and I have never felt so entitled. We weigh each load not on team-entitlement grounds but on the merits of the load itself. If it is profitable, we run it. If it is not, we don't. As often as not, turning down a short run in hopes of snagging a long run later in the day leaves you sitting until the next day with no run at all.

For example, yesterday, we deadheaded about 120 miles for a 10 mile load that paid less than $300. No great shakes but it kept a big fat zero from otherwise appearing in that day's revenue column. Zeros can bring your daily and weekly average down real fast. If we focused on loads that are a "challenge" for a team, we would have passed that one up and ended up with a zero day.

The big loads come when the come but we cannot and do not count on them. Instead, we make the best decisions we can, one load at a time.

Regarding your comment about "FedEx Freight network," I can only share what we've seen. Since the network was announced, we have seen about the same number of long runs (including a couple home runs) as we have in the past. In terms of miles or run count, we have seen no negative impact from the network.

Finally, I notice you are comparing the combined production of two good solo tractor-trailer drivers in two trucks to the production of a good team in one truck. It is quite remarkable, when you think about it, that you can even consider the question within a $50,000 range.

To make a full comparison, you should also factor in the operating expenses of two trucks compared to one and the net financial result, plus whatever benefit you assign to the expedting lifestyle opportunites and being together in the same truck.
 

nightcreacher

Veteran Expediter
I dont want to brag,but in the 1st 230 days back to fed ex c c, I did $235000,that was from july 05 to june 0f 06,and ran single a couple of different weeks.
In 2001 when I was an ER unit I did $235000,but had a trailer to take care of,so bottom line was around the same, as fuel was cheaper.
Don't ask why I was gone from fed ex,ask safety,wasn't my idea
fed ex cc since 1984
ooida 263839
E6613
steve gilbert
 

x06col

Veteran Expediter
Charter Member
Retired Expediter
US Army
80% inservice means roughly you are working a bit over a 5 day week. Not too bad doing 200K. Not sure what you expect with that kind of effort. The wrong times off really will kill the revenue.
365 X .8 = 292 days, 292 devided by 52 = 5.6 Amazing how those down days kill you, then throw in a few refusals - - See what i mean.
 
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guest

Guest
We have a D unit, tag, liftgate, 50 blankets, and a milk crate of straps. We just added a tripod dolly; never needed one in 15 months and have used it a couple times already!

The best load we've had recently was a broker load I got myself out of L.A. to Dallas paying $4100. Loved giving up 15% of that one to the company.

Mike & Cindy
 
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guest

Guest
Guess we met you at orientation last spring. We had the FL80 with the 96" AA. We traded it for a new Sterling Express Cruiser last November. Sometimes we wish we had the old truck back. Better fuel mileage, better generator, less expensive to maintain. But this is a nice truck and we enjoy driving it. We just have some definite ideas on spec'ing the next one down the line.
 
G

guest

Guest
You're right about the home run loads. I didn't mean that we want to run 5000 miles a week, but it seems a waste sometimes to be getting 600 mile loads that a single should be able to run, but isn't allowed to. There's not much sense in that in 65 and 70 mph states.

We're doing all right because we do have our standards when it comes to the pay for "all miles". We know exactly what our cost per mile is and what we need to make on a load. We're not going to Spokane for $1.30 a mile and have to deadhead to Denver or Reno. We might go to Chicago for $1.20 on a bad day, because better things await, usually.

Mike and have argued about this and I think the $200,000 is within our grasp, but it would take an exceptional year to get that extra $50,000. We have talked to a few CR units who claim to have made over $225,000 and still took the winter off, but trucker stories are told every day. So we figure a WG D who doesn't take much time off should be able to do almost as well. I'm sure we don't have to deadhead as much as the reefers. We have a dry box because we couldn't justify the extra $25,000 or more for a truck that might not average much more for all miles than we're doing now.

Mike & Cindy
 

ATeam

Senior Member
Retired Expediter
I've been thinking more about your post. It seems to me the answers you seek can be found mostly in your own data.

You said, "We had several months last year of $20,000-$25,000 as newcomers to expediting (started as a team in mid-July), so we were hoping to have a great year in '06."

The expetation based on that is easy to understand. $20,000 a month is $240,000 a year, which is close to your goal. $25,000 a month brings you to your goal and well beyond.

Further, these are not made-up numbers. They are not numbers from someone else. They are real-world numbers produced by you. Because of that, all the variables about load decision making, work ethic, business skills, etc. don't have to be factored in or out. These are YOUR numbers; the most reliable kind there are.

Thus, it might be wise to pull out your run journal, log books, and calendars to review your results month by month. In the months where you made $20,000 to $25,000, what were you doing, not doing, thinking, and not thinking?

Same question for the months where you made less than $20,000.
 

chuckwagon

Seasoned Expediter
Ok now that you have heard from all the veterans with trillions of miles under their tires - let me the rookie with several thousands of miles under my new tires chime in.

I think the first thing you have to do is improve on your in service time. You stated it was 80% which means you work just over 11-days per two weeks and that is not that great.

In my book you should be running at about 90% or right around 12-13 days per two weeks.

You improve your in service time and that will assit taking care of the money aspect of it.

We can all :censoredsign: and moan about the freight rates, etc but hell we can't change that. We can change alot of different things we do ourselfs though.
 

louixo

Veteran Expediter
Charter Member
I think too many people focus on their gross. It´s not about gross...it´s about net. At the end of the day, (week, month, year), how much stays in your bank account? The more miles you run, the more expenses you have. The more money you gross, the more taxes you pay, and on and on. The key is good money management. Money management doesn´t just mean the profit and loss column. It also means what are you doing with the money you keep in the way of tax protection, and investment. The things that grow what you keep, in leiu of more gross. A goal of a gross year end figure is good, but it´s self defeating if you don´t have a goal of a year end net to you.
 

jeffman164

Seasoned Expediter
I couldn't put it any better. NET NET NET, that's what it's all about. For people who don't manage money well, then they won't do good. For those who do manage money well, then they will do good. Sounds pretty simple but for some reason - some just don't get it. Must repeat - business person 1st - driver 2nd.
 

layoutshooter

Veteran Expediter
Retired Expediter
I don't know when I became an expert in this but I wish I was. Then I would not screw up as much as I do. HEHEHE. I agree that NET is the answer. What you need to make is also determined by you overall financial situation. The net off of 160K could be big for a team that was used to making much less each year and kill a team with greater obligations. Each teams needs are different. And please let me know where to go to expert school so I can quit screwing up.
Layoutshooter
 

ATeam

Senior Member
Retired Expediter
Three people have talked about the importance of net income in this thread. I agree 100%. It goes without saying, one would think, that the amount of money you have left over after everything else is accounted for is the amount that matters most.

I prefer to compare trucks and truck performance in gross revenue terms because all expediting businesses are different. No two expediters take the same journey from their gross revenue starting point to their net revenue ending point.

One expediter may buy their food at fine resturants. Another may eat mostly out of cans or bags. One may pay $25.00 for a ratchet strap at a truck stop. Another may spend $8.00 for the same thing at a trailer shop. One may budget 20% of his income for on-road entertainment (casinos). Another may pass time on the road reading books. One may buy more truck than he or she can afford. Another may pay cash for the same truck and avoid financing charges alltogether.

While net revenue is the most important number for each expediter, gross revenue numbers are also useful, especially when talking with other expediters and evaluating your production compared with fleet averages and the production of others.

If someone is driving a truck or trucks similar to yours have a higher gross than you, the difference can be a red flag that gets you thinking about how you might improve your numbers.
 

davekc

Senior Moderator
Staff member
Fleet Owner
I agree with the others. The net number is the number to determine if you are profitable.
Gross only has a value if you know the equipment used, and the milage you are weighing against that number.




Davekc
owner
22 years
PantherII
EO moderator
 

RichM

Veteran Expediter
Charter Member
Also something that gets overlooked by a lot of folks but is very important is ,how did you arrange your down payment and financing. If you sell off the farm that is appreciating at 8-10 % every year in order to buy a vehicle that depreciates 20% a year,you should really consider that whatever your net turns out to be, deduct the appreciation percentage that you would have obtained,had you not sold the farm.

Example you have a $100,000 home that you owe $50,000 on. If you keep it each year the home rises in value while your portion of the value owed decreases. Selling this off to buy a vehicle is essentially a 5 year loss. Now after 5 years your vehicle is worth very little but the home might be worth $150,000 and your portion owed may be now $40,000. So if you kept the home after 5 years you have a profit of $60,000 for doing nothing. Just something to keep in mind.
 

ATeam

Senior Member
Retired Expediter
Rich,

This is not the first time you have warned readers about the risks of selling their house to buy a truck. While the advice is sound, I can't help but wonder why you feel compelled to offer it again and again and again and again. In over three years of expediting, Diane and I have never met, read about or heard of anyone, including us, who sold their house to buy a truck.

Am I wrong? Is selling your house to buy a truck a practice that is more common than I realize? I do not know of a single instance where this has happened. Kindly correct me if I am misinformed.
 
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