Midsize Operators – Straight Truck & Bus Operations
- Expedited Freight & Bus Operators Overview
- These markets are profitable, but one must go with the flow!!!
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TYPICAL COSTS FOR “NEW” OPERATION WITH OWN AUTHORITY
To look at profitability of different size equipment operations, one must take into account the different key variables that affect each number. A typical operation includes the Class 6-8 expedited straight truck market and similar-sized busses. In reviewing the numbers in the following, please reference the background and philosophy used in our tractor-trailer operations overview as it applies to this segment. The key differences are revenue, utilization and actual fuel mileage.
We took $1.25 per mile overall revenue at 8,000 miles per month. We adjusted this gross using an average combined factoring and brokerage rate of 5%. We rolled in a fuel surcharge of $0.03 per mile against an average pump price of $1.50 per gallon. We used a straight truck with an insured value of $40,000, with a payment of $950 per month and getting 9 miles per gallon.
We used revised costs as noted in the fixed and variable cost pages for fuel / cash transaction fees, road and fuel taxes, servicing costs, licensing costs and collision / physical damage insurance. We also included that for liability / cargo insurance and typical office management / administrative costs.
The results follow for 1,850 miles per week, 8,000 miles per month or 96,000 miles per year:
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“OWN AUTHORITY” PROFITABILITY SUMMARY
| Monthly | Annual | CPM | |
| Income | $8,790 | $105,480 | $1.099 |
| Surcharge | $216 | $2,592 | $0.027 |
| Total | $9,006 | $108,072 | $1.126 |
| Fixed Expenses | |||
| Equipment | $950 | $11,400 | $0.119 |
| Licensing / Permits | $151 | $1,815 | $0.019 |
| Federal Use – 2290 | $46 | $550 | $0.006 |
| Collision Insurance | $100 | $1,200 | $0.013 |
| Variable Expenses | |||
| Fuel / Taxes / Fees | $1,538 | $18,451 | $0.192 |
| Liability Insurance | $650 | $7,800 | $0.081 |
| Cargo Insurance | $95 | $1,140 | $0.012 |
| Servicing | $80 | $960 | $0.010 |
| Repairs | $320 | $3,840 | $0.040 |
| Tires | $160 | $1,920 | $0.020 |
| Total Expenses | $4,090 | $49,076 | $0.511 |
| Taxable Income | $4,916 | $58,996 | $0.615 |
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NOTE: Profitability will improve when factoring / brokerage use decreases, equipment gets paid down, liability insurance experience gets established and maintenance costs are minimized.
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TYPICAL COSTS FOR “NEW” OPERATION CONTRACTED TO FLEET
To look at profitability, we took $0.82 per mile overall revenue at 8,000 miles per month. We rolled in a fuel surcharge of $0.027 per mile against an average pump price of $1.50 per gallon. We used a tractor only with an insured value of $40,000, with a payment of $950 per month and getting 9 miles per gallon.
We used typical costs as noted in the fixed and variable cost pages for fuel / cash transaction fees, road and fuel taxes, servicing costs, licensing costs and collision / bobtail insurance. This average contract includes liability / cargo insurance and no charge for typical office management / administrative costs.
The results follow for 1,850 miles per week, 8,000 miles per month or 96,000 miles per year:
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“LEASED TO FLEET” PROFITABILITY SUMMARY
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NOTE: Profitability will improve when equipment gets paid down and maintenance costs are minimized.
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