Hey!✋ Legend truck driver in this blog you are going to learn awesome information about how much do owner operators make per mile.
Let’s start reading the blog and know more average pay per mile for owner operator truck drivers.
WHAT IS AN OWNER OPERATOR?
An owner-operator is a commercial truck driver who is self-employed or it is a small business operating trucks for main transportation of products and goods over the highway for its various customers. A vast majority of owner-operators become drivers themselves for the sole purpose of gaining a lot of experience for them to be able to decide whether the career is suitable for them.
BEING AN OWNER OPERATOR
The main feature of being an owner-operator is that they purchase and own their vehicles. For owner-operators to own their truck can be stressful but there are lots of benefits that come with being your boss. There is a lot to consider when it comes to truck and trailer financing because this particular purchase can determine the difference between personal bankruptcy and a stress-free profitable business. This is a very important consideration in being an owner-operator.
Here are a few factors they consider:
- Credit ratings
- Fuel economy
- Word on the street
WHAT IS THE TOTAL COST PER MILE FOR OWNER OPERATORS?
This article is presenting data coming from the analytics of 70,000 trucks😱 represented by over 230 truckload for-hire fleets.
For companies to be able to achieve a higher than the average rate per mile is very difficult and fleets of all sizes are capable of adding capacity very easily to the market due to low barriers to market entry and as a result of this, shippers make lots of profits due to these hyper-competitive effects with various rates which don’t correspond with trucking realities.
AVERAGE PAY HOW MUCH DO OWNER OPERATORS MAKE PER MILE
The total trucking cost for every mile ranges from $1.16 to $3.05 per mile. This cost is excluding the very specialized operating models. In real terms, no company would be able to achieve an average of the total operating cost per mile of $1.16, they would also not be able to achieve that of $3.05 per mile.
The main mechanism of trucking is the mile but owner-operators will still have to put their expenses into consideration. This helps to provide a more analyzed view of their total expenses per mile and how they would be able to charge customers appropriately.
ANALYTICS OF TOTAL OPERATING COSTS PER MILE
|EXPENSE CATEGORY👇||LOW RANGE👇||HIGH RANGE👇|
|Driver Compensation||$0.48 per mile||$0.83 per mile|
|Non-Driver Compensation||$0.06 per mile||$0.30 per mile|
|Equipment Financing||$0.00 per mile||$0.40 per mile|
|Fuel||$0.40 per mile||$0.55 per mile|
|Maintenance||$0.09 per mile||$0.40 per mile|
|Insurance||$0.06 per mile||$0.18 per mile|
|Variable Driving Expenses||$0.01 per mile||$0.08 per mile|
|Fixed Overhead||$0.06 per mile||$0.30 per mile|
- DRIVER COMPENSATION ($0.48-$0.83 PER MILE): labor does not equal the profit for independent contractors because they pay themselves market wages summing up with the projected profit. The expenses for driving labor only is the single largest expense for all trucking companies and this is because of the combination of driving compensation, geographic region, length of haul and operating mode, and payroll taxes rages from 28% – 50% of revenue.
- FUEL ($0.40-$0.55 PER MILE): This is the second-largest variable operating expense for all company or owner-operator. Although, the difference between a bottom and top performer in trucking is directly corresponding to the net fuel expense calculation. Net fuel expense is the addition of the total amount spent on fuel including the taxes and additives excluding the fuel surcharge which was generated for the same period.
- EQUIPMENT FINANCING EXPENSE ($0.00-$0.40 PER MILE): For truck drivers to own a truck, a lot of expensive financing has to be done to make sure that that truck functions properly and lasts longer. These days, tax law changes have allowed capital equipment depreciation rates to increase drastically, meaning if a trucking company owes money on its vehicles, it is most likely to net more expenses after tax than before the changes.
- MAINTENANCE ($0.09-$0.40 PER MILE): Trucking maintenance stands as the highest margin opportunity for most trucking companies and this maintenance expense captures all labor, tires, parts, supplies, lube, oil, and fixed overhead (e.g. shop rent, tools, utilities, etc.). The difference between the bottom performers and the top performers ranges from a low of $0.09-$0.40 per mile.
- INSURANCE ($0.06-$0.18 PER MILE): This is the total cost of physical damage, cargo insurance premium, and deductibles, cost of liabilities, and the expenses of any other related damages. These days the increasing trend of nuclear verdicts in different jurisdictions and the continuous general accident repair expenses have affected the cost of insurance. This trend has caused more companies and owner-operators to carry more burden of insurance all by themselves through larger deductibles and captive insurance arrangements.
- VARIABLE DRIVING EXPENSE ($0.01-$0.09 PER MILE): This expense captures all the tolls, permits, fines, lumper fees, motels, and driver recruiting and orientation/screening expenses. Top performers pay attention to the above items to make sure that they are not caught up in unsafe practices (fines), inefficient dispatch (layovers), bad culture (increased turnover), and poor routing decisions (tolls).
- NON-DRIVER WAGES AND BENEFITS ($0.06-$0.03 PER MILE): This possesses an advantage for independent contractors as they take care of all sales, operating, and administrative activities themselves. However, they do keep a close eye to be able to spot market changes and brokers’ reliance on load boards for freight.
- FIXED OVERHEAD ($0.06-$0.03 PER MILE): This covers all the rent, utilities, office supplies, and communication expenses.
HOW TO MAKE THE MOST MONEY AS AN OWNER OPERATOR?
Being an owner-operator comes with a lot of responsibilities and it can be lucrative. There are various things to consider before you can profit a lot from this business. It requires being smart with your money and the need to develop a stronger reputation. Here are a few tips on how you can make the most money as an owner-operator:
- Place yourself as a reliable trucker
- Sign up for loyalty programs and fuel cards
- Try to avoid deadhead miles
- Make use of load boards and connections
- Familiarize yourself with truck repair to save money
Also read our truck🚚 driver related blog – 👇👇