Ask a few ODs on the work you’re interseted in to ‘honestly’ tell you what they’re averaging mileage wise anually, as most fixed costs are annual anyway, your figures won’t be far out.
As you said, monthly is too short a period. You also have to account for your hols, that you’re paying yourself for, 4 weeks annually? weekly rest, bank holidays and ‘downtime’.
So your truck won’t be earning the same every month either but I’m just agreeing with you again arn’t I.
The tax man tells me my wages are profit, but in business terms they are not.
Your wage/salary is a ‘reward’ for your time and is a fixed cost.
You need a return on the risk of your capital investment.
eg. credit firm lends money to a ‘high risk’ individual the apr is 19%apr.
Seeing as transport is a high risk venture (you try borrowing money to set up on your own)
Then you should be getting the same margin as profit, - 19% (annually)
At £1.10per mile based on an average mileage of 1500-1800 weekly I worked out roughly a 6% margin (I always average from a worse case senario). NOT ENOUGH
You can leave your money in the bank and get that (No risk).
My figures may be out like you said. With your wealth of experience as an OD you may be able to start a new thread on cost cutting.
Whilst companys are getting you to do their work they’ve eliminated the competition, and at those rates they’re taking the proverbial as well.
robB39:
As you said, monthly is too short a period. You also have to account for your hols, that you’re paying yourself for, 4 weeks annually? weekly rest, bank holidays and ‘downtime’.
Good point which is why it should never be worked out over 365 days, something around 220 - 230 days is more realistic. In my case Bank holidays don’t really come into the equation because as all my work is European and they have, mostly, different Bank Holidays to us I usually work the UK ones and if I’m stuck away on a foreign one, they tend to have a lot of midweek ones, I get paid for that from the customer as it is costed into the job. One example of how one size doesn’t fit all and every job/type of work is different.
I too have enjoyed this exchange and it is nice to enjoy a sensible debate.
This has been an interesting one, especially as I’ve been trying to figure out what the costs are, comming at it from cold.
One other question I have, how would you cost for a part load/partial weight ? I have been assuming some volumisation needs to be done about utilisation of space/weight, but it is your view that if you are hiring the unit (driver, tractor and trailer), you pay THE rate, however that is arrived at?
The rates for a part load are as confusing, some companies will pay extra for collections and some will expect 2 local collections free.
My experience is in tanker work and it costs the same to carry 6 tonne as it does 20 tonne because the tank clean costs the same. there is an advantage of using multi compartments tanks or Jumbo tanks where you can use part of the tanker capacity in an outward load and return using the other compartments. i.e only one clean out required.
A general rate could be worked out as a capacity load or you can be paid on weight / mile / time as coffee has suggested.
A lot of the bulk movements I did were weight based, but a company in london who can only hold 16 tonne of oil still pays the same for the transport as if they had ordered 24 tonne.
Other companies will pay a round trip rate if they want the tanker to carry their own products only, they will then pay for the cleanout. We were also paid more for high value or temperature sensitive loads.
Part loads are tricky, especially for a one man band artic operator and it’s not really something I get involved with and most of my work is based on a trailer regardless of how much is being carried. Sometimes when there is urgent stuff you get paid a good full rate for very little freight, I’ve taken 3 pallets to Madrid from London area on an artic and was paid as if it were a full load for example. On occasions like that if you can pick up anything else to go with the small consignment, as long as it doesn’t delay the delivery, then you can get a tidy rate for the trip.
very interesting lads
its nice to see some figures been mentioned to give some ideas to the rates you can earn.
i have considered being an o/d to take advanage of the wtd opt out .the only problem is that i dont want to but long hours in to estabish myself and miss out on the kids.i think i will wait for a few years when my spare time is less important.i would also like to get the wife involved at some point to allow her to feel part of the team at 34 at least time is still on my side.
also i dont have hang ups of running a top wagon etc its just the challenge that interests me.
good luck lads
keep on trucking
jon
If you work for one customer as an o/d for more than 75% of your time then your covered by the wtd.
Its also possible that that customer will be responsible for making sure that you are complying with the wtd in so far as they have to treat you as though you were one of their employees in ensuring that you’ve complied.
This last point has serious implications for most o/ds be they contracted hauliers or just pull ferry trailers for one forwarder. It is still not set in stone but I do know that my “customer” has taken it seriously enough to hire a barrister to look into it and presumably ways out of it.
Another point
If you are a Ltd company, you are an employee of your company, you will have to have employers liability for yourself
and also come under the WTD.
hi lard/rob
i had herd that, as some companys where trying to offer you to buy a unit from them on a buy back and work on a contract as an o/d
i also herd if you work for 2 companys/shippers it gets round these regs.
i will not run a unit until the kids get a bit older but in 5-8 years it could be a possible.
also i will have a large amount of money coming my way then so it may be better to wait and see how things are panning out.
they still have not told us exactly how "other work"will be defined.
to me any waiting time does not look like it counts.
good luck lads
keep us informed
jon
