Within the trucking and transportation industry, knowing your costs is an immeasurably important factor in figuring how to best maximize your profits. Figuring out the cost per mile to drive your truck and knowing how much to ask for when bidding on a load will ensure you make enough money for a profit.
If you're lucky enough to hook up with some of the larger, more well-known trucking outfits, you can expect a long climb up the seniority ladder and may have to settle for part-time driving until a full-time slot opens up. Sometimes the wait can be years.
Most new truckers are able to earn between $25,000 and $35,000 in the first couple of years. Not a lot of money to start, but if you learn the ropes quickly, you can expect your paycheck to go up from there. It all depends on what you are willing to sacrifice, and keep in mind that a large percentage of your income will be spent on truck payments, insurance, maintenance, fuel and, of course, taxes.
In the meantime, knowing how many miles per gallon your truck burns when it's fully loaded is the first step in adding up the costs of running your own trucking company. Be sure to add up all the other business related expenses as well. For example, your truck payment, trailer payment or leasing fee, insurance payment, driver wages, office rental, dispatcher payment, fuel costs, maintenance, taxes and any other related cost or overhead. When added up and taken into account, these expenditures can really show you what your average cost is per mile and what you need to charge in order to make a profit.
Take the total of all your costs per year. Then add your total number of miles per year that you expect to drive. Divide the miles per year by your total cost per year. The resulting figure will tell you how much money you must make per mile in order to cover your costs. You must also figure out your average fuel cost per mile. Divide the price of fuel by how many miles per gallon your truck can get. The price of fuel changes frequently, so be sure to recalculate this number every time you bid on a load. It's up to you if you want to ask for it as a fuel surcharge or figure it into your cost per mile.
Of course, whatever you bid on a load, it should always be higher than your fuel cost and total cost per mile. Knowing your true costs will enable you to bid wisely on a load and negotiate the best possible price for your service. Taking these factors into account, you can cover your expenses and maximize your profit margin.