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Owning the Wheel

Before December’s A STORY FOR ALL SEASONS article which got us a little off track we were talking about fuel savings. At the time fuel was over $4.00 a gallon in many locations and while, at the time this is written, fuel it back down under $3.00 I’m sure this is just a temporary drop in price brought on the by the world economic crisis and the resulting drop in the demand for oil products. Truck loads are also dropping off as consumers curtail spending and the demand for almost everything drops.

Times are not just tough, they’re down right scary and those who don’t have their business ducks all lined up in a row are not going to survive this downturn.  So I want to take another detour from the fuel savings topic and talk again about managing your business.

Survival in this economy is going to depend on being able to run lean and marginalize your profits until the economy gets back on its feet. In order to do that you need to know what your bottom line is and you need to know how to squeeze every nickel you can out of every penny you spend. For those of you who’ve been down this road before you know the drill, for those of you who haven’t here are a few tips to help you survive this economy.

First you need to know what your current bottom line is. Things have been slowing for several months now so use the last 3 months to figure your bottom line rather than the last 12 moths which you’d normally use. This short time frame will give you a better idea of what your current CPM is and that’s the figure you need to have in order to be sure you run lean and mean but don’t starve in the process.

To help you in calculating your bottom line I’ve setup a calculator on our web site, www.truckershelper.com. Look over on the left hand side for the heading TRUCKER CALCULATORS and that will take you to the calculator for calculating your bottom line. It’s set up to use yearly figures so do this to get them. Take the last 3 months, total up the expenses in each category and then multiply it times 4 and enter the answer in the calculator. Leave the DRIVERS SALARY blank for now so you get just your actual Cost/Mile.

After you get the figures entered click the Calculate button and the result you get will give you an Annual, Monthly and Per Mile cost for your overall operation and each category. Write that overall number down – that’s the minimum you have to get per mile just to pay the truck expenses. Now add up your monthly payments at home, figure a little on the high side as you don’t want to come up short.

You may need to waive your profit for right now, but you can’t waive your expenses, so be sure to include all the expenses necessary to keep the home and family going. Once you have that total for the year add 10% to is to cover the unexpected and then put that in as the Drivers Salary. Now Calculate again and you’ll have a figure for the minimum you can run for just to survive.

I generally don’t recommend running for survival wages, but if this economy continues to decline, and it’s looking like it may get worse before it gets better, the goal is to keep your business up and running. We will recover and when we do those who have held on through the hard times will reap the rewards of already having established contacts and accounts. And since you’ve learned to run lean you’ll be at the top of the profit heap things pick up and freight becomes plentiful again.

Here are a couple more hints for squeezing a dollar until it squeals. Do you eat out? For the cost of a single meal in the truck stop you can buy a loaf of bread and enough fixings to keep you in sandwiches for several days. When we ran we installed an inverter and a microwave. A cooler, one of those regular 12v coolers you get in the truck stops, will keep frozen food cold enough for it to last 2 or 3 days. Buy frozen dinners in the market and nuke them in the microwave and you’ll not only have a less expensive dinner but one that may well be better for you.

Another tip for those of you who drink a lot of water is to skip the bottled water and get a Brita. You can fill it at the truck stop out of the tap and it’ll turn that tap water into better tasting water than you’ll get out of those bottles at a fraction of the cost. Keep it in the cooler and you’ll have ice water whenever you’re thirsty.

If you’ve gotten the microwave use it to boil water for your coffee or tea and you’ll find they have a lot better flavor with the Brita water. To help the cooler stay colder raise it off the floor with a couple 2x4s so it’s not picking up the heat from the floorboards.

The last item I’d like to mention is an electric blanket or a really good sleeping bag. A 12v electric blanket or a good sleeping bag can offer you a solution to idling during the winter. Pile on the covers, use an electric blanket and turn off the engine at night. You’ll need to figure out your battery capacity and the loads you’re putting on the system, but shutting of the engine for the night (say 12 hours = 12 gallons and at $3/gal that’s $36 a night or $180 a week if you stay out for 5 nights a week).

These are little things, but when times get tough it’s all these little things that can make the difference between making it and going under. The secret to being the one left standing is to run smart. Cut expenses everywhere that you can, slow down a little to save fuel and we’ll be looking for you down the road when the good times return.

 Till next month, be safe.

 John Ewing is a former owner/operator and the author of The Truckers Helper, business management software for truckers. If you'd like to ask  questions or make comments on this article please visit the forums at www.thetruckershelper.com. He will be happy to answer any questions on  trucking or managing your trucking business.

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