New operator, advice appreciated

UK PROFESSIONAL DRIVERS FORUMS OWNER AND FLEET OPERATORS FORUM (INTERACTIVE)
21

Here are some numbers from my first week running an artic:

KM 2156

F U E L C O N S U M P T I O N

Derv In 1155.82 £1,049.62 Gal 253.24 MPG Ave 8.51
AdBlue In 55 £37.37 Gal 12.05 MPG Ave 178.91
Gas Oil In 0 £0.00

O T H E R C O S T S

Tyres £36.18
Glass £-
ONP £25.00
Washing £27.09
Tolls £-
TOTAL £1,175.26

Empty KM 485
% Empty KM 22.50

S T A N D I N G C O S T S (Until 31/12/2017)
Insurance £4,536.97
Salary £7,000.00
Operating Centre £1,120.75
Mobile Phone £342.00
O-Licence £40.10
Accountancy £900.00
Tachomaster £26.00
Truck Hire £11,202.00

Total Standing Costs £24,985.82
Monthly Standing Costs £4164.30
Current Standing Costs Months 0.25 £1,041.08

Money spent after just one week: £2,216.34

Things to consider:

All figures are plus VAT.

My spreadsheet runs over calendar and financial years, this is from the calendar years page. For a full year Standing Costs would be just short of fifty.

I do no ADR. I don’t have Loler and Puwer to thing about. All my maintenance is in the vehicle rental figure except for tyres and glass. The trailer is owned by the company I sub for so anything but tyres is their problem.

I got lucky, I’m subbed to my old boss who has never stood a willing wagon for a week, some weeks might be three fifteen hour days, others might be fifteen hour rests but there is always work. I also have a worst case scenario back up plan in place.

I got lucky again, when the tyre went flat it was reparable. If not, that £36.18 on tyres would have been at least £361.80 on tyres. I picked up the wagon at 10:00 on Monday, the tyre was pancaked by 10:00 on Tuesday. I had at that point delivered one paying load, which won’t pay out for 21 days.

I have to drive it for the first year, anyone else driving it puts the insurance up even more. I may even have to do a full yr.2 as well before I can get an any driver insurance policy which will allow me to search the driver market for cover. At the moment every driver needs to be specifically named and risk assessed by the insurer.

My O-Centre does not allow vehicle washing on site so if I want it clean, I have to pay out for a truck wash.

ONP is Overnight Parking. Again, lucky, one of the Risby truck stops is an Operating Centre for the company I work for so I get free parking there, if not, I would have paid out £75 this week for parking.

Diesel: I picked it up on fumes so had to brim it before starting work. I also park it full so all the costs for the week are in that week, that means I have accounted for 400l of motion lotion which have not yet been burned. That will sort itself out (on this unit) when it goes back empty, because I will only then have got the free work, (eg the loaded miles without then filling back up again to figure out the cost of the work) but of course its replacement will then do a week where it diesels up a full tank before doing any work. You are always running at tank of diesel and tank of AdBlue ahead of where your income is.

One final bit of lucky for this week: My load for Monday was out of Selby going to Wembley and I’m based just off J31 M1. So the only wasted miles I did this week were getting from the dealer to the first load and the 1.5 miles from J31 M1 to the yard. Some weeks I could be loading Manchester for Cambridge on Monday for example, which means that to get home will be doing two sides of the triangle rather than running down the M6. That is all miles for which you will not get paid, because if you price that in, there will be someone much cheaper who will take the work from you.

Contrary to the advice above. I think renting or leasing is the way to go when starting out. Yes it means that week in week out you need to find £500 for the truck, but with the exception of tyres and glass all you will need to find is that £500. No big £10k breakdowns to pay for. Fixed costs are key when starting up.

22

Nick you missed out the bit where you disclose the earnings :open_mouth: :blush: :smiley:

23

Punchy Dan:
Nick you missed out the bit where you disclose the earnings :open_mouth: :blush: :smiley:

When I get the earnings statement I may let you know!

24

Patience, that is weeks away. :slight_smile: Until the the cheque(s) clear the answer is nil.

25

cav551:
Patience, that is weeks away. :slight_smile: Until the the cheque(s) clear the answer is nil.

Don’t I know it! When the tyre went flat I was thinking ‘But I won’t get paid for this load for 21 bloody days!!!’

26

You’ll know owner-driving has become worth doing when you get paid for a job before you’ve even put it on the trailer, but you pay the finance, insurance and fuel companies six weeks later. :wink:

27

Harry, considering your previous comment about earning the same as an agency driver, would you consider your venture to have been a success? From a business standpoint, I know you got to scratch the itch etc, but in purely money making terms, did the sums add up?

As you can probably recall, you and I had a difference of opinion when you were starting out, I wonder if now, with the benefit of hindsight, you would be more inclined to agree with me now?

Of course my own thoughts at the time benefited from my own hindsight, many lessons learned the hard way, as I’m sure you did too.

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28

Harry, considering your previous comment about earning the same as an agency driver, would you consider your venture to have been a success? From a business standpoint, I know you got to scratch the itch etc, but in purely money making terms, did the sums add up?

It served a purpose for four years, I was hoping to earn more than I did as exhibition work was still a niche and very profitable market when I started out, but, like everything else it was taken over by eastern Europeans…

In terms of maths, after four years I came out with almost exactly the same amount as I went in with, having paid myself a reasonable wage along the way. Possibly I could have earned more money had I been more highly driven and ambitious.

29

So more personally rewarding than financially, which is important, no looking back with regrets that you wish you had done something.

So now you have the benefit of hindsight, what would your advice be to anyone thinking of going down the path of owner operator? Apart from you must be mental lol.

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30

So after four years you where no better off than when you started out. Well theres everyones answer. Finding a niche job as an employed driver is the way to go. @nsmith you done 485 unpaid kms, off the top off my head thats in an around a quarter of all kms you done, i dont know the rate your on but would need to be good as that is not sustainable.

31

newmercman:
So more personally rewarding than financially, which is important, no looking back with regrets that you wish you had done something.

So now you have the benefit of hindsight, what would your advice be to anyone thinking of going down the path of owner operator? Apart from you must be mental lol.

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Before I came to your post, I wondered if Harry was going to say he was happier working for himself and that mitigated the lack of earnings over and above an agency/employed driver.

Money isn’t the main motivator for everyone, it’s certainly not mine. People work because being independent is more important, they like the social aspect of the job, maybe they are an expert in their field and the like the kudos that brings. It’s interesting the different things that motivates people.

32

TheYoungTrucker:
So after four years you where no better off than when you started out. Well theres everyones answer. Finding a niche job as an employed driver is the way to go. @nsmith you done 485 unpaid kms, off the top off my head thats in an around a quarter of all kms you done, i dont know the rate your on but would need to be good as that is not sustainable.

Sorry but that isn’t everyone’s answer. Harry may be a better, smarter, cannier operator, than me, I don’t know. I wouldn’t say that I am better or more experienced than him. However my hard work, the same hard work Harry put in, got married to that extra bit of luck, and 26 years later I’ve got 22 staff over two bases, so may be that’s the answer.

My empty running BTW, is probably a shade over 50% and I make money. You have to know all the facts!

33

I’ve got a mate that bought his own, he’s got a top of the range motor and if there’s something shiny that he hasn’t got stuck on that lorry, it’s only because he hasn’t seen it yet. He doesn’t work his tripe out either, all in all he could earn more as an employee at one of the better paid jobs, but he’s not in the least bit interested in earning top dollar, as long as he pays the bills and has enough to spend on lights, chrome and truck washes, he’s as happy as a pig in ■■■.

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34

No point doing something foolish you’re unprepared for but no point wishing you’d done something when you’re sat in the nursing home.

35

TheYoungTrucker:
@nsmith you done 485 unpaid kms, off the top off my head thats in an around a quarter of all kms you done, i dont know the rate your on but would need to be good as that is not sustainable.

Don’t forget week 1 will always have more empty miles. 91km was getting a trailer and getting to the first load. Total empty ks came to 22.5% last week. Take off the starting empty running and it’s going to be about 15ish % (I could be more accurate but I’m typing on my calculator). Then there is the balancing act of do I put a loss making load on to cover the empty diesel or am I better running empty and getting to a profit making load on time.

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36

15%ish sounds reasonable for me. Like your thinking goes, drag it back and use it on a load that will make money.

I run specialist trailers that look normal, so I can put general freight on. But coupled with them being double manned, I virtually never bacload. Not worth it.

37

There hasn’t been any mention of fridge work, but I will throw this into the mix.

One needs to be very careful about insurance, liability, dead mileage and demurrage (if you can get it! :smiley: ) Perishables raise many potential problems which need to be sorted before loading, because most of the time it is going to be the haulier who carries the can unless it is otherwise contractually.

Who is responsible for supplying fridge diesel ? - normally the haulier. Who is responsible for fridge breakdowns if the trailer is hired or the property of the consignor or clearing house? More importantly, who is liable for a spoiled load resulting from a fridge breakdown if the trailer does not belong to the haulier? - again likely to be the haulier.

Now to the more likely events. The outbound load is rejected for some reason. This is going to involve time and mileage, either to bring the load back or to wait while attempts are made to sell it to someone else and then deliver it to another location. This needs to be chargeable and understood to be so before loadiing. This becomes even more important if this is a backload and the consignor wants it returned.

Part of the load is rejected, but there are still other deliveries on the vehicle. A bigger problem because the inevitable delays this will cause may result in missed bookings and possible rejection of the remaining perishables, with a claim looming for their value aimed at the haulier.

There is an excessive delay at a delivery posing the same issues as above. Easier to deal with if the load is all from one consignor, but a big problem if it is not.

38

nsmith1180:

Punchy Dan:
Nick you missed out the bit where you disclose the earnings :open_mouth: :blush: :smiley:

When I get the earnings statement I may let you know!

Not having a go mate but if i dont know what the load pays before it goes on the trailer then it doesnt go on , end of, you cant run a business not knowing what you have made until someone tells you

39

chaversdad:
Not having a go mate but if i dont know what the load pays before it goes on the trailer then it doesnt go on , end of, you cant run a business not knowing what you have made until someone tells you

Its the problem of the job I am currently on. I cant say I’m particularly happy about it either. Now I’ve got a hang on the way that things are priced I’ve estimated last week and can say that over 10553km in month 1 I’m on to make £567.67 profit after all running costs, standing costs and my salary.

40

As long as your making money then but tbh i would be looking for that profit weekly not monthly, another thing i would say is dont get hung up on this empty mileage thing too much , my work involves 50% running empty as my customer expects the trailer back soon as and pays accordingly (unless im up Inverness or Fort william then i bring timber back as i do it direct for the end customer and get paid on 14 days) stick with it mate, the right work will come along eventually if you want it enough