Was the story in this weeks cm right? Total running costs for an artic of £133,334. The fuel was £53,472. That’s £2778 a week on 48 weeks to break even■■? Is that exaggerated or is it really that bad. If the traction rates on other threads are right, you couldn’t even break even running legal 
Yep that’s about right, if you’ve got a trailer to pay for as well. You’ll find that figure will include depreciation of a new vehicle and trailer which at roughly 150,000 spread over 5 years make it that you have to earn close to 3k a week to make it pay really.
I don’t know what there figures are based on and I have never owned a trailer but on anything approching there figures I would have been out of business years ago.
A few figures for someone to disagree with:-
Rent of tractor unit inc tax & tyres( quoted last Sept @ £380 p/wk)…£20,000
Insurance inc GIT £ 5,000
Op. centre rent etc £ 3,000
Contingencies £ 2,000
TOTAL FIXED £30,000
FUEL £54,000
TOTAL COSTS £84,000
Attempting to work backwards from fuel costs of £54,000 pa gives mileage of aprox 85,000 miles @ 8mpg.
These figures do not include operating costs for the trailer, and are obviously open to argument but I believe they are realistic.
85,000 miles @ £1.30 p/mile gives income of £110,500
Giving a profit of £26,500 not a huge profit and some would say not worth the hassle but a profit none the less.
Big companies have economies of scale aswell. An O/D looks like he’s far better of owning a unit outright. The monthly rental fees are the killer.
Matamoros, you’ve made a profit of £26.5k if you find a driver who works for nothing
matamoros:
I don’t know what there figures are based on and I have never owned a trailer but on anything approching there figures I would have been out of business years ago.A few figures for someone to disagree with:-
Rent of tractor unit inc tax & tyres( quoted last Sept @ £380 p/wk)…£20,000
Insurance inc GIT £ 5,000
Op. centre rent etc £ 3,000
Contingencies £ 2,000
TOTAL FIXED £30,000
FUEL £54,000TOTAL COSTS £84,000
Attempting to work backwards from fuel costs of £54,000 pa gives mileage of aprox 85,000 miles @ 8mpg.
These figures do not include operating costs for the trailer, and are obviously open to argument but I believe they are realistic.85,000 miles @ £1.30 p/mile gives income of £110,500
Giving a profit of £26,500 not a huge profit and some would say not worth the hassle but a profit none the less.
The rate could probably be even less than that if it’s just a case of doing traction only using the cheapest,but best,wagon that can be found for under £10,000 and run it for around 2 years max.Probably with somewhere cheaper than £3,000 pa to park it and with just enough left over,after all the costs have been covered,for a wage of around £18-20,000 pa,because CM’s figures and that rental figure will involve a (much) higher depreciation figure,than using an older cheaper wagon which would probably have a much larger residual value relative to it’s purchase price when it’s sold on.
Having said that the returns on capital outlay and for the hours worked proably aren’t much better,if not worse,than just running a car doing some taxi work.Road fuel taxation is making road transport increasingly unviable for both the customer and operators.
OVLOV JAY:
Matamoros, you’ve made a profit of £26.5k if you find a driver who works for nothing
Which is why sub contractors sub out to owner drivers.In that case profit and wages are the same thing. 
OVLOV JAY:
Matamoros, you’ve made a profit of £26.5k if you find a driver who works for nothing
As an O/D I neither need or want a driver, tried it once many years ago, never again. My son actually does the driving now as a partner in running our one tractor unit, he’s happy as an O/D as I was( except for the crap rates) I must say though the situation at the moment is the worst I have seen in almost 30 years, we run legally and it is difficult to achieve even those figures. I have said for a few years now that if a good job becomes available ( is there such a thing? ) that he should take it and try and get out of this industry alltogether.
dominicpriestley:
Big companies have economies of scale aswell. An O/D looks like he’s far better of owning a unit outright. The monthly rental fees are the killer.
It’s maintenance costs and depreciation of complicated modern trucks compared to older simpler ones added to high fuel taxes that’s the main problem.
Carryfast:
dominicpriestley:
Big companies have economies of scale aswell. An O/D looks like he’s far better of owning a unit outright. The monthly rental fees are the killer.It’s maintenance costs and depreciation of complicated modern trucks compared to older simpler ones added to high fuel taxes that’s the main problem.
so if the tax was cut by 50% over night, the rates wouldn’t be far behind in following suit
stevieboy308:
Carryfast:
dominicpriestley:
Big companies have economies of scale aswell. An O/D looks like he’s far better of owning a unit outright. The monthly rental fees are the killer.It’s maintenance costs and depreciation of complicated modern trucks compared to older simpler ones added to high fuel taxes that’s the main problem.
so if the tax was cut by 50% over night, the rates wouldn’t be far behind in following suit
Road fuel taxation needs to be got rid of completely and put it on income tax.Which would bring fuel costs down to around £ 2.30 per gallon.Or probably around half that if the manufacturers make a large scale switch from diesel to LPG fuelled trucks,which would also get rid of much of the modern day complications of keeping diesel engines compliant with emmissions regs,and I don’t think that rates would fall by the same amount because the reduction would most likely be shared equally between the customers and operators if everyone has any sense.
In which case everyone wins by moving freight by road more cheaply,which would also result in increasing demand for the service,thereby keeping rates sustainable.
Carryfast:
stevieboy308:
Carryfast:
dominicpriestley:
Big companies have economies of scale aswell. An O/D looks like he’s far better of owning a unit outright. The monthly rental fees are the killer.It’s maintenance costs and depreciation of complicated modern trucks compared to older simpler ones added to high fuel taxes that’s the main problem.
so if the tax was cut by 50% over night, the rates wouldn’t be far behind in following suit
Road fuel taxation needs to be got rid of completely and put it on income tax.Which would bring fuel costs down to around £ 2.30 per gallon.Or probably around half that if the manufacturers make a large scale switch from diesel to LPG fuelled trucks,which would also get rid of much of the modern day complications of keeping diesel engines compliant with emmissions regs,and I don’t think that rates would fall by the same amount because the reduction would most likely be shared equally between the customers and operators if everyone has any sense.
In which case everyone wins by moving freight by road more cheaply,which would also result in increasing demand for the service,thereby keeping rates sustainable.
don’t be silly, why would the reduction be shared equally between customers and operators?
stevieboy308:
Carryfast:
stevieboy308:
Carryfast:
dominicpriestley:
Big companies have economies of scale aswell. An O/D looks like he’s far better of owning a unit outright. The monthly rental fees are the killer.It’s maintenance costs and depreciation of complicated modern trucks compared to older simpler ones added to high fuel taxes that’s the main problem.
so if the tax was cut by 50% over night, the rates wouldn’t be far behind in following suit
Road fuel taxation needs to be got rid of completely and put it on income tax.Which would bring fuel costs down to around £ 2.30 per gallon.Or probably around half that if the manufacturers make a large scale switch from diesel to LPG fuelled trucks,which would also get rid of much of the modern day complications of keeping diesel engines compliant with emmissions regs,and I don’t think that rates would fall by the same amount because the reduction would most likely be shared equally between the customers and operators if everyone has any sense.
In which case everyone wins by moving freight by road more cheaply,which would also result in increasing demand for the service,thereby keeping rates sustainable.
don’t be silly, why would the reduction be shared equally between customers and operators?
Get the reduction first then you’d probably see the answer.There’d be nothing to lose by finding out though.
Any reduction in fuel taxation and the rates will be cut accordingly within weeks.
kr79:
Any reduction in fuel taxation and the rates will be cut accordingly within weeks.
I think you’re forgetting to factor in the increase in demand for road transport just resulting from the fuel cost reductions let alone the increase in growth in the economy as a whole which such a reduction would create.Yes rates would be cut but not by as much as demand would increase.Which would be a win win situation for all concerned. 
Except the rail freight industry.Who you can bet would be one of the biggest critics of such an idea and the biggest supporters of the status quo. 
Why would there be a massive extra demand for transport. Transport costs are a tiny amount of the retail cost of goods so it’s not as if prices of consumer products would dramaticly drop causing people to spend more.
Carryfast:
kr79:
Any reduction in fuel taxation and the rates will be cut accordingly within weeks.I think you’re forgetting to factor in the increase in demand for road transport just resulting from the fuel cost reductions let alone the increase in growth in the economy as a whole which such a reduction would create.Yes rates would be cut but not by as much as demand would increase.Which would be a win win situation for all concerned.
Carryfast:
Road fuel taxation needs to be got rid of completely and put it on income tax.
but you’ve just increased everybodys income tax to pay for the reduction, removal of fuel duty. So what most working people save on reduced fuel costs and lower prices of goods, they’ll lose on having less take home pay.
Yeah but carryfast can fill his old gas guzzler up a lot cheaper then.
muckles:
Carryfast:
kr79:
Any reduction in fuel taxation and the rates will be cut accordingly within weeks.I think you’re forgetting to factor in the increase in demand for road transport just resulting from the fuel cost reductions let alone the increase in growth in the economy as a whole which such a reduction would create.Yes rates would be cut but not by as much as demand would increase.Which would be a win win situation for all concerned.
Carryfast:
Road fuel taxation needs to be got rid of completely and put it on income tax.but you’ve just increased everybodys income tax to pay for the reduction, removal of fuel duty. So what most working people save on reduced fuel costs and lower prices of goods, they’ll lose on having less take home pay.
But there’s more income tax payers than there are road fuel tax payers.There’s also higher rates of income tax for higher earners so the net effect would be that working people pay less because there’s more paying in to provide the same amount of tax and those earning least pay the least while those earning most pay most.It’s also better to pay tax after the money has been earn’t in the case of income tax than before as in the case of people borrowing money to pay taxes on fuel and goods.
As it stands now road transport users are paying an unfair burden of the country’s tax requirement and why send goods by road with road fuel tax being charged when it can go by rail without and in which case road fuel tax has to be increased even more to make up for the loss of revenues caused by those avoiding it by sending goods on road fuel tax free modes.With the result that revenues then drop even further as the economy goes under because people don’t buy as much road fuel,goods and services like road transport to save paying tax that they can’t afford anyway.
We’re already seeing the results of the status quo on the road transport industry and the economy now with haulage firms going under and a surplus of unsold fuel which the fuel companies can’t sell and a flat lining economy because too many people don’t have enough spending power in their pockets to buy goods and services because their disposable income is being swallowed up by indirect taxation.
kr79:
Why would there be a massive extra demand for transport. Transport costs are a tiny amount of the retail cost of goods so it’s not as if prices of consumer products would dramaticly drop causing people to spend more.
Transport costs are based on truckloads not the individual load items.When a freight forwarder subs out a job it’s on the basis of a mileage rate for a truck not each individual item carried.It’s obvious that if road fuel taxation didn’t exist then mileage rates could be reduced massively which would obviously mean more demand for the service which would put upward pressure on rates for the operator.While the removal of road fuel taxation on private car use would obviously mean more money left in those car users’ pockets to spend in the economy thereby creating more demand for goods and services including road transport and more demand for unsold fuel supplies instead of closing up refineries like Coryton etc.