My dream is to own my own truck

UK PROFESSIONAL DRIVERS FORUMS OWNER AND FLEET OPERATORS FORUM (INTERACTIVE)
141

gingerfold:
You’re spot on CF, I don’t want to take sub-contracted work at any time. Sometimes there is no option with back-loads, but 90% of our work is with direct customers, both outbound and return. We have one owner driver subbing for us full time who owns his own truck outright, and we’re not looking to take on anymore subbies. With direct work and just one trusted subbie we have total control of what we do. Last week we had to sub out two back loads because we were so busy, and they both ended up being late collections and even later deliveries.

Agree completely. We cover a good 90% with our direct customers ourselves, after that we have two subbies we use and we occasionally sub for them as well. All three of us are a similar size and dealt with each other for years - over 30 in one case!

142

albion:

Carryfast:

gingerfold:
The old saying “turnover is vanity, profit is sanity” holds good today, just as it did at any other time, and it applies to a one man band as well as to any major fleet.

Logically if you want to go by that idea that would effectively remove the option of sub contract work.Because the idea of sub contract is for the forwarder/broker/main haulage contractor to take the profit leaving the owner driver with hopefully a better wage and a better choice of work,than they would have got working as an employed driver,after covering all the costs.The problem in this case being that there’s no way of making all those figures add up after fuel costs have been taken out.

Fuel doesn’t ( well shouldn’t ) matter to the extent that it’s a make or break. It’s the wage that changes the outcome the most, be it a firm employing 500 drivers, mine with 20 odd or an OD.

Take my competitors ( please someone :laughing: ), they pay more or less the same for fuel*, the truck costs the same **, wages are the difference. Last year one of my competitors were paying 0.98 pence less an hour than me, currently they pay 0.21p an hour more. Wages are the one thing a haulier/forwarder/broker can control - you can’t tell Scania you are only paying 50k for a truck or Shell that they can foxtrot because you can get it 20p a litre cheaper with BP.

We had a good year last year and the lads got a £500.00 bonus at xmas and 3% wage increase. That doesn’t sound much but 3% on a wage bill is what would finish us, if we lost work and had to take lower paying work. Shell and Scania don’t care wether I’m making money or losing money, the price is the price.

  • maybe they pay a penny a litre less, but next week they may pay a penny a litre more than me. Any type of contract, you have to insist on a fuel escalator be you Wincantons or an OD.
    ** you can fiddle about buying a new one and replacing after 4 years or holding onto it for twice that and seeing how the repair bills go, but my personal opinion is that it kinda balances out at the end.

It’s the fact that you can’t tell Shell or BP etc to do one when filling up with diesel which is the problem bearing in mind the proportion of fuel costs v revenues/rates and fuel costs as a proportion of overall costs.Also bearing in mind that the pump price of the fuel isn’t their fault because it’s all about the taxation regime.Which is put in place with the deliberate aim of making the use of trucks to move stuff as financially unattractive to the customer as possible. :bulb:

Which then just leaves the option of trying to compensate for the resulting unavoidable fuel costs with the only other avoidable cost possible being that of minimising the driver’s wages.

Which in the case of owner drivers obviously often means profits being sustained in that toxic trading environment,by taking advantage of the self employed status of owner drivers,by expecting them to work for at best around minimum wage,after all their costs have been covered. :open_mouth: :unamused:

Those costs being added to by the lose lose situation that new start owner driver operations are realistically forced by legislation and fuel costs into the other toxic,most expensive combination of purchase/maintenance/depreciation/replacement,costs regime.With the catch 22 that the least potential expensive options in that regard are denied by legislation and/or cancelled out by the extra fuel costs.That’s even if we had a non EU type approval restricted purchase environment. :bulb:

143

Carryfast, there isn’t a huge amount of profit taken out of a job before it’s subbed out, there just isn’t that kind of money in the job. An average would be 10% rounded up to the nearest hundred.

However there are three different types of subcontracting models, one is the Maritime type where they pay a set mileage rate, the second is from a forwarder that takes their 10% off the top and the third and by far the best is where you work closely with a haulier that only uses subbies to fulfil their contracts when they haven’t got enough availability in their own fleet.

The latter is by far the best option as they’re not subcontracting to make money as a part of their business and in a lot of cases will pay the same rate that they get with maybe a small administration charge taken off. I’ve done this myself, both sides of the equation.

I worked together with two other small hauliers, we each had half a dozen lorries and we shared a yard. We never trod on each other’s toes and it worked very well. On quite a few occasions I had every lorry we had out working for one of my customers and vice versa. Sometimes I would have all of my lorries doing their work and some of each of theirs doing my own work as my own lorries couldn’t get back in time to do it. It worked very well, but you need to put a lot of trust into a venture like that as one bad apple could really mess things up.

You mentioned that there wasn’t a profit in owner driving, but that whatever’s left after costs is wages, well yes, to a point, however as soon as you have to dip into your personal account to buy a tyre or something, then it stops being wages. It’s semantics I know, but it is what it is. Personally I paid myself a wage, the rest stayed in my business account and when I’d built up a nice chunk of change, I paid myself a nice bonus.

Doing it this way prepared me for the leap of madness that is buying a second lorry, I knew how much profit was in the job after costs and wages and it was easy to work out if it would be profitable or not. Of course you have to factor in that a lorry with an employed driver will always earn less than your own lorry and it will inevitably cost more to run (on top of PAYE costs) unless you are really fortunate in your choice of driver.

I would say that unless you can nick a grand a week out of a lorry after normal fixed and operating costs are taken out, then there’s no point, you would be better off financially by getting a decent job driving somebody else’s lorry.

144

gingerfold:

Carryfast:

gingerfold:
The old saying “turnover is vanity, profit is sanity” holds good today, just as it did at any other time, and it applies to a one man band as well as to any major fleet.

Logically if you want to go by that idea that would effectively remove the option of sub contract work.Because the idea of sub contract is for the forwarder/broker/main haulage contractor to take the profit leaving the owner driver with hopefully a better wage and a better choice of work,than they would have got working as an employed driver,after covering all the costs.The problem in this case being that there’s no way of making all those figures add up after fuel costs have been taken out.

You’re spot on CF, I don’t want to take sub-contracted work at any time. Sometimes there is no option with back-loads, but 90% of our work is with direct customers, both outbound and return. We have one owner driver subbing for us full time who owns his own truck outright, and we’re not looking to take on anymore subbies. With direct work and just one trusted subbie we have total control of what we do. Last week we had to sub out two back loads because we were so busy, and they both ended up being late collections and even later deliveries.

That’s the difference between a haulage company or freight forwarder/broker and sub contract owner driver.If you applied your logic to the owner driver example you obviously wouldn’t have the option of being able to call in the services of a sub contract owner driver because he’d obviously refuse to do any work which didn’t involve direct access to the customer base and therefore with it all the associated profit margin.IE even by your own example most owner drivers are,by definition as sub contractors,working to a different business model,to that of a haulage company with direct access to the customer base and as such the object being more about just earning a decent wage after costs than a wage + profit. :bulb:

The problem in the case of sub £1.60 per mile rates being that of covering costs with enough left over for a decent wage.Nothing to do with getting a sufficient rate to leave a large profit in addition.Because if that was the object what would be the point of using sub contract owner drivers if the sub contractor took most/all of the profit in the job.

145

newmercman:
However there are three different types of subcontracting models, one is the Maritime type where they pay a set mileage rate, the second is from a forwarder that takes their 10% off the top and the third and by far the best is where you work closely with a haulier that only uses subbies to fulfil their contracts when they haven’t got enough availability in their own fleet.

The latter is by far the best option as they’re not subcontracting to make money as a part of their business and in a lot of cases will pay the same rate that they get with maybe a small administration charge taken off. I’ve done this myself, both sides of the equation…

That’s fair enough but is it realistically possible for an owner driver operation to base its business model on just the third option ?.While the second option sounds like at least an essential ingredient in the mix ?.

While by the figures provided ( £1.20 something per mile ? ) the Maritime model sounds like a nightmare. :open_mouth: While Harry’s previous/original model ( £ 1.60 per mile ? ) seemed do able both theoretically and in practice for him ? ) While he hasn’t actually confirmed whether it was the reduction in that rate which was the deal breaker in his case ? Which I’m guessing might have been the issue.

IE it seems obvious that around 60 p per mile fuel costs are causing a financial headache for all concerned in trying to balance rates v profit v costs including wages in which £1.60 per mile is arguably the break point between viable v non viable regards the costs v wage type business model. :bulb:

146

It wouldn’t matter if fuel was 6p a litre or £6 a litre rates would be adjusted acordingly

147

Yes I believe the third option is achievable, if you’ve been driving for a while, which is highly likely if you’re thinking of being an owner driver, then you will know who’s who at various companies in your area, you would also have earned a reputation for being reliable and trustworthy, from there it’s a matter of introducing yourself to prospective clients (other hauliers) and letting them know that you are available for ad hoc work.

The negative aspect of this is what to do while you wait for the phone to ring, that’s simple, you get a bit of spot hire work from one of the Maritime type operations. During the day you phone around all of the companies you want to work for and let them know that you’re available the next day, as soon as you get booked, you call the rest and tell them you’re unavailable. If you get nothing, you take a day from the Maritime type firm and call the others and tell them you’re booked for the next day.

You will find that once people start to realise that you’re being kept busy and they have a bad day because of a major road closure or delays at a loading/unloading point, they will grab you as soon as they can and once you’ve got your foot in the door you will be turning down work.

Sure it takes a bit of work, but you reap what you sew, if you rely on somebody else to run your business for you and dictate rates and the rest of it, then you don’t really have a business, you’re nothing more than an employee with your own lorry, metaphorically speaking, you’re the same as a labourer with his own shovel.

148

of all my work I would say 85% is direct with my own customers 10 % subbying and 5% ad hoc. I run 2 UK/European general tramping and 2 on walking floors (where theres waste theres brass :smiley: ) but my main gripe earlier was anybody relying totally on subbying to the big players at THIER rates is asking for problems right from the outset. if it don’t make you good money then walk away and find something better.

149

kr79:
It wouldn’t matter if fuel was 6p a litre or £6 a litre rates would be adjusted acordingly

The flaw in that argument is that if rates reduced pro rata as a proportion of revenues,with lets say the allowance of the use of red diesel,from something like £1.20 per mile at 60p per mile fuel costs now,that would obviously mean the rates being reduced to around 60p per mile. :bulb: :open_mouth: :laughing:

Realistically either rates have to increase to £1.60 per mile minimum or trucks need to be allowed to use red diesel.The former idea would probably reduce demand and/or profitability regards the users of sub contractors,at least in the container sector,to unviable levels.Which just leaves the question of at least trying the latter in the hope that the industry won’t then be stupid enough to press the nuclear button on itself when it’s been thrown the life line. :bulb:

150

newmercman:
Yes I believe the third option is achievable, if you’ve been driving for a while, which is highly likely if you’re thinking of being an owner driver, then you will know who’s who at various companies in your area, you would also have earned a reputation for being reliable and trustworthy, from there it’s a matter of introducing yourself to prospective clients (other hauliers) and letting them know that you are available for ad hoc work.

The negative aspect of this is what to do while you wait for the phone to ring, that’s simple, you get a bit of spot hire work from one of the Maritime type operations. During the day you phone around all of the companies you want to work for and let them know that you’re available the next day, as soon as you get booked, you call the rest and tell them you’re unavailable. If you get nothing, you take a day from the Maritime type firm and call the others and tell them you’re booked for the next day.

Which seems to confirm the idea of no one is going to turn down the best case scenario if/when they can get it.But in the real world there’s no way of making an owner driver operation work without having to rely to a greater or lesser degree on the type of work where just being paid enough to make a wage out of the job,in which the forwarder etc dictates the rate and/or takes a cut in being the direct link with the customer not the owner driver,would have to be enough.Bearing in mind that one of the reasons for being an owner driver,could well be getting away from all the bs face fits ‘reputation’/‘experience’ issues of being an employed driver. :bulb:

On that note being a labourer with a ‘shovel’ is arguably a great idea for anyone who wants to be a self employed ‘labourer’.Working as a subby for a building firm that doesn’t use/have its own tools or directly employ its own labourers.IE the second option for example ?.

151

weewulliewinkie:
of all my work I would say 85% is direct with my own customers 10 % subbying and 5% ad hoc. I run 2 UK/European general tramping and 2 on walking floors (where theres waste theres brass :smiley: ) but my main gripe earlier was anybody relying totally on subbying to the big players at THIER rates is asking for problems right from the outset. if it don’t make you good money then walk away and find something better.

The question is does that fit the definition of an ‘owner driver’ in the real world ?.IE an owner driver,especially new start,by definition is likely to be far more reliant on sub contracting for someone else with no direct access to the customer base and more likely based on a business model of covering costs with enough left over for a decent wage.The problem being when rates aren’t sufficient to cover costs leaving enough left over for the decent wage.

152

CF, trust me when you are an OD, your face still has to fit, you are the boss of your own truck, but you still have to be the person they want to give work to.

're the take on a job, if it’s under a grand for a job I’ve subbed, then I normally take 25-30 quid for admin. If it’s over, then 50+, depending on how much the charge is.

153

My face hasn’t always fitted, one company that I worked for was run by the son of the founder, we were not friends by a long way, in fact I couldn’t stand the ■■■■ and he couldn’t stand me! but he had some bloody good work and I did a good job for him, so we tolerated each other. He had me over a barrel a few times, stuff like paying me for a day’s hire on a particular job and then getting me to go and load one of his trailers on another job, but I got back at him a few times when he had a driver let him down and wanted a replacement at very short notice, I had a driver he could have, but he came with a lorry and he had to have both or nothing at all. It was by no means an easy relationship, but there was mutual respect there as we both did a good job.

That’s what business is all about, it’s business, you have to keep business and pleasure seperated or it will bite you on the arse, you get too friendly and it gets personal and then you’re expected to do favour, or you get disappointed and feel let down if you don’t get what you want.

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154

albion:
CF, trust me when you are an OD, your face still has to fit, you are the boss of your own truck, but you still have to be the person they want to give work to.

I could definitely understand how that would be the case regarding nmm’s third option.Which is probably one of the main downsides depending on that reasoning for being an owner driver.IE to get away from all the employed driver issues and politics which inevitably goes with it.

In which case hopefully the second option would provide the right balance in that regard at least.On the basis that a freight forwarder probably couldn’t care less ‘who’ is taking the load just so long as the O licence,GIT insurance and other paperwork details all check out.Which seems to be historically how numerous small operations got themselves up and running possibly even being happy to just stay at that running anywhere from uk work to Europe and Asia ?.On that note the freedom of option 2 is probably worth the forwarder’s cut and letting him do his job in finding and keeping the customers on board and letting the driver do his of driving.Or at least it was at 1970’s/80’s fuel costs. :bulb: :frowning:

155

Even with a freight forwarder container line ferry trailer operator rtc you have to deal with someone who gives the work out.
There will be some oweer drivers will always get the handy one drop one load fast tip and loads etc wethe that’s because they have been there longest or are dropping a envelope in with there invoice or they drink with the planner or just the fact they have proven over time to be reliable and will always help when there’s a flap on. It’s a fact of life in any industry.

156

albion:
Fuel doesn’t ( well shouldn’t ) matter to the extent that it’s a make or break. It’s the wage that changes the outcome the most, be it a firm employing 500 drivers, mine with 20 odd or an OD.

Yes, fuel purchasing costs are a more or less a level playing field for all hauliers running legally, but fuel usage can play a huge part in job profitability, that is why all the big players have driver training for maximising mpg. Now some on here will pooh-pooh the idea that you can teach an old dog new tricks. In my previous company, even though I was driving very, very infrequently I went with a driver trainer one day to see what it was all about. Fast forward to my present company and again I hardly ever drove a truck, but back in 2011 one of our customers asked us to move 12 loads of wheat from Seaforth to Leith, the first two loads being on Boxing Day 2011. Rather than pay drivers treble time, even though it was a “round-trip” rate I did one load and the then owner of the business did the other load. My choice of truck was a 52 Plate Foden Alpha with 420 ■■■■■■■■ his was an 03 ERF with 420 ■■■■■■■■ Both trailers were identical Rothdean grain bulkers, gross weights were to within 200 kg of each other. We set off with brimmed tanks, he leading, me following driving to the recommendations of fuel saving techniques. The ERF was slightly faster on the level, I caught it up on the drags of Shap and Beattock. Next day when we got back to the yard we filled the tanks to the brim. The Foden and I had used 32 litres of diesel less than the ERF. Back then that was an extra £35 on the bottom line.

157

A driver can make a 30% difference to fuel economy, a bad one will be up to 15% worse than average and a good one can be 15% better, training drivers to eek out the best economy is the single biggest saving you can make to mpg.

Speccing the right lorry for the job and paying attention to maintaining it, especially top end adjustment, using synthethic lubes, keeping on top of tyres, including running the lowest rolling resistance and keeping triaxles aligned will also bring about savings.

It’s all part of the spending as little as possible part of my keep it simple philosophy, sometimes it pays in the long run to spend more up front, especially where tyres are concerned. I often get light hearted banter about my rubber fetish (yes I mean you BillyBigWheels) but up front savings are not the best value when it comes to tyres.

158

newmercman:
That’s what business is all about, it’s business, you have to keep business and pleasure seperated or it will bite you on the arse, you get too friendly and it gets personal and then you’re expected to do favour, or you get disappointed and feel let down if you don’t get what you want.

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I think I am lucky, I seem to have the right balance and have done for a while, I actually like my customers and hope the feeling is the same in reverse. And I’m picky, if I don’t like someone and their attitude, I don’t do the work. But I agree there is a line and it can be a fine balance - it helps to have an easy working relationship, rather than an abrasive one, on the other hand it’s no good trying to be overly chummy.

@gingerfold and newmercman, yes fuel consumption is the difference - and it’s something we don’t actually bother with. :blush: I ought to more, the problem is it that isn’t vital to us in terms of profitability, so it makes you lazy. I really couldn’t go back to general haulage, it would finish me off completely! And the drivers would be traumatised by having to work for a ‘proper’ firm as well :laughing: . One of the local dealerships did do a fuel saving morning, not just on the optimal way to drive their trucks, but the whole aerodynamics, drag and general driving techniques. It was really interesting stuff and you would have to have a really obstinate, cantankerous driver to not find it interesting and get something out of it.

But I’m in total agreement with NMM on paying for quality, not only because IMO the cost savings are better in the long run, it can be better safety wise.

159

Carryfast:

weewulliewinkie:
of all my work I would say 85% is direct with my own customers 10 % subbying and 5% ad hoc. I run 2 UK/European general tramping and 2 on walking floors (where theres waste theres brass :smiley: ) but my main gripe earlier was anybody relying totally on subbying to the big players at THIER rates is asking for problems right from the outset. if it don’t make you good money then walk away and find something better.

The question is does that fit the definition of an ‘owner driver’ in the real world ?.IE an owner driver,especially new start,by definition is likely to be far more reliant on sub contracting for someone else with no direct access to the customer base and more likely based on a business model of covering costs with enough left over for a decent wage.The problem being when rates aren’t sufficient to cover costs leaving enough left over for the decent wage.

a business model of covering costs with enough left over for a decent wage …is exactly what Ive been banging on about all trough this thread, that wont make you any profit, “no direct access to a customer base” is absolute nonsense, pick up the phone or chap a door and you have an instant potential customer base …whats the worst they can say “no thanks” so go on to the next one on the list. its an ongoing neverending task buts that’s the way to do it, as I said earlier it will only work if you make it work

160

It’s probably a ratio of 1 in 20: for every 20 approaches you make to a potential client you might get one to say yes. I spent several hours last weekend working on a rates matrix for a potential new customer that approached us, and I have more work to do on it this weekend. It’s not a simple A to B rating matrix, it involves multi-drop and other things such as tail lifts. Will I win the business? I honestly don’t know but it’s worth the time and effort.