traction rates

[monarch_of_the_highway]

jmc:
Finally got figures to be profitable. A whole £72 a week profits! Reading other peoples things i wonder if i am accounting for too much on my overheads. I will put up what i am working out as my overheads when i get home tomorrow and see if anyone can offer some advice

When you say 72 pound a week profit is this after every thing and I mean everything is taken out wages runnin standing costs vechile replacment if it is I’d be more than happy with that 48 weeks of the year worked x 72 = just short of 3 n half grand not bad in my eyes

[cav551]

matamoros:

cav551:

matamoros:
I have operated 44t tractor units on a variety of contract hire/lease from various sources for many years, always with full R&M so my overheads, apart from tyres, are relatively fixed.

My fixed overheads at the moment for operating a brand new Axor, more or less the same for an 11 plate Actros Megaspace is around £500 a week.
Running cost based on fuel @ £1.11/litre and 8mpg is £0.66/mile(inc 2p mile for tyres)

1500 miles running costs = £990
Fixed costs = £510

TOTAL RUNNING COSTS = £1500

EARNINGS for 1500 miles:

£1.60/mile…£2400…profit £900

£1.50/mile…£2250…profit £750

£1.40…£2100…profit £600

£1.30…£1950…profit £450

Figures without trailer hire because I don’t pay it.

That’s how i work my figures out, others will differ and fuel prices change, nothing is static in this business (except rates !!!)

As far as I am concerned that is an accurate guide to what is possible, whether it is worth it is a personal decision

It looks to me as if the £450 profit at the bottom end of the scale is going to have to support dead (unpaid) mileage and personal living expenses, unless these latter and an allowance for the empty running is included in the fixed weekly costs.

The mileage rates that I work to are total actual mileages ie revenue for week divided by total mileage.

As an OD whats left from the revenue after deduction of total costs is profit(income), personal living expenses don’t come into it.

What I am getting at is not about the accounting method, but based on the lowest rate of return of £450 profit for the week, where are the wages? The revenue is £1500, the standing costs are £510 for the vehicle, insurance etc (so with a new vehicle they don’t seem to be in there.) The running costs are £990 for 1500 miles, for fuel and tyres ( so they don’t seem to be in there). So you are left with £450 for contingencies, reinvestment, actual profit and wages.

I know it all works out in practice because you aren’t working for £1.30 a mile all the time, over time you have really good weeks, and often the weekly costs are below budget.

[matamoros]

cav551:

matamoros:

cav551:

matamoros:
I have operated 44t tractor units on a variety of contract hire/lease from various sources for many years, always with full R&M so my overheads, apart from tyres, are relatively fixed.

My fixed overheads at the moment for operating a brand new Axor, more or less the same for an 11 plate Actros Megaspace is around £500 a week.
Running cost based on fuel @ £1.11/litre and 8mpg is £0.66/mile(inc 2p mile for tyres)

1500 miles running costs = £990
Fixed costs = £510

TOTAL RUNNING COSTS = £1500

EARNINGS for 1500 miles:

£1.60/mile…£2400…profit £900

£1.50/mile…£2250…profit £750

£1.40…£2100…profit £600

£1.30…£1950…profit £450

Figures without trailer hire because I don’t pay it.

That’s how i work my figures out, others will differ and fuel prices change, nothing is static in this business (except rates !!!)

As far as I am concerned that is an accurate guide to what is possible, whether it is worth it is a personal decision

It looks to me as if the £450 profit at the bottom end of the scale is going to have to support dead (unpaid) mileage and personal living expenses, unless these latter and an allowance for the empty running is included in the fixed weekly costs.

The mileage rates that I work to are total actual mileages ie revenue for week divided by total mileage.

As an OD whats left from the revenue after deduction of total costs is profit(income), personal living expenses don’t come into it.

What I am getting at is not about the accounting method, but based on the lowest rate of return of £450 profit for the week, where are the wages? The revenue is £1500, the standing costs are £510 for the vehicle, insurance etc (so with a new vehicle they don’t seem to be in there.) The running costs are £990 for 1500 miles, for fuel and tyres ( so they don’t seem to be in there). So you are left with £450 for contingencies, reinvestment, actual profit and wages.

“The revenue is £1500”

No, TOTAL OPERATING COST =£1500

I know it all works out in practice because you aren’t working for £1.30 a mile all the time, over time you have really good weeks, and often the weekly costs are below budget.

As a non limited company O/D profits = wages, that’s what I pay tax on. What happens to that profit is up to my needs, I do not need any large amounts for contingencies as I rent or lease on a full R&M contract so do not get any huge surprise bills. Obviously I do have funds to cover contingencies as required by OP. LIC. conditions.

Operators that own vehicles and are responsible for repairs/breakdowns etc need to take account of these potential costs as well as depreciation and funding a replacement vehicle, I don’t.

It is not the cheapest way of operating but suits me, down to “circumstances” again.

[jmc]

Right as said here is my working outs.

2011 Volvo FH13 500 Globetrotter, 12 month full R&M = £325 pw
Insurance = £166 pw
Just in case money (tyres & stuff) = £150 pw
Wage = £600 pw
Hire Trailer = £95 pw
Diesel based on 1500 miles and £0.75 per mile = £1125

So overheads are £2461

Gross income

124ppm = £1850
130ppm = £1950
140ppm = £2100
150ppm = £2250
160ppm = £2400

So i would still be running at a loss!!

[cav551]

jmc:
Right as said here is my working outs.

2011 Volvo FH13 500 Globetrotter, 12 month full R&M = £325 pw
Insurance = £166 pw
Just in case money (tyres & stuff) = £150 pw
Wage = £600 pw
Hire Trailer = £95 pw
Diesel based on 1500 miles and £0.75 per mile = £1125

So overheads are £2461

Gross income

124ppm = £1850
130ppm = £1950
140ppm = £2100
150ppm = £2250
160ppm = £2400

So i would still be running at a loss!!

Is this also covering all those other business expenses which are not necessarily directly related to the lorry?

Like: accountancy and legal fees, computer and office equipment, postage and stationery, workwear, motor expenses(for getting to and from yard), tools and equipment and consumables, DCPC training?

edit: spelling, stationEry. Mr Cooper slap handie!

[professor]

sorry its taken so long to post again but its been a busy week got home monday night then never got back till sat morning.I have no laptop in cab and i find my i phone to small to use i have been thinking about getting an i pad for the cab so i can post during the week but me being tight i keep putting it off but i feel i might treat myself soon lol.It would have been me charging up the M6 silver surfer one of them trips which needed me to sit on the limiter and as for miliage i do about 3000km,s a week some weeks a bit more some weeks a bit less

[harry_monk]

Just my two penn’orth on my own figures.

This week was a busy week and the truck grossed £2,750.

I bought 778 litres of diesel, although I ended the week with the tank less full than I started. On my maths at 7.5 mpg I reckon I used about 1000 litres which is £1,100. So subtract that and there’s £1,650 left.

I calculate my standing costs at £600 a week. Finance is £133 a week, insurance £80, I allow £120 a week for maintenance, trailer hire is £100, yard rental £40, tyres, tax, stamps, envelopes blah blah blah about £150. So I made over £1,000 this week.

However, another week it may be much quieter and I may only gross £2,000. I’ll use less diesel, say £800’s worth, but my standing costs will be the same so I will only make £600 and I could have earned more driving for Tesco. And if I go on holiday for the week I lose £600.

As I’ve said many times before, there’s a living in it, no more and no less. But life is not all about money. When I think of some of the loathsome snotgobblers I’ve had the misfortune to work for as an employee, running my own truck and subbing for a firm where unpleasant job candidates simply do not make it past the interview stage is worth the small amount of extra effort involved.

[m1cks]

Out of interest Harry, do you do many 13/15 hour days or do you work less? What pressure does your contractor put on you.

[harry_monk]

m1cks:
Out of interest Harry, do you do many 13/15 hour days or do you work less? What pressure does your contractor put on you.

No, I’m basically diurnal by nature, I started on Monday at about 0600, finished today (Saturday) at about 0900 and had at least 11 hours off every night apart from last night when I reduced to 10 hours 45 minutes. I generally start work at about 0600 and finish about 1800. Sometimes I start earlier, sometimes I finish later but I doubt I have had more than three or four reduced rests this year.

[matamoros]

jmc:
Right as said here is my working outs.

2011 Volvo FH13 500 Globetrotter, 12 month full R&M = £325 pw
Insurance = £166 pw
Just in case money (tyres & stuff) = £150 pw
Wage = £600 pw
Hire Trailer = £95 pw
Diesel based on 1500 miles and £0.75 per mile = £1125

So overheads are £2461

Gross income

124ppm = £1850
130ppm = £1950
140ppm = £2100
150ppm = £2250
160ppm = £2400

So i would still be running at a loss!!

Let me try again to explain my situation

Firstly wages are not overheads for an O/D,they are your profits that is the difference between revenue and costs.I have been self employed as a sole trader and owner operator, latterly in a partnership with my son for over 30 years and have never been able to rely on taking a fixed amount in ‘wages’ , good weeks and bad weeks, that’s how it is.

Let’s look at your figures compared to mine:

Truck lease is about right.

My insurance is around £66 a week…saving on your figures…£100

No trailer hire…saving…£95

Diesel/running @66p/mil…£990…saving…£135

Just in case money, not an overhead(tyres incl in running)…saving…£150

Wages not inc in O/Hds…saving…£600

TOTAL saving…£1080

This brings the total of running costs and overheads to £1381, my figure of £1500 includes, telephone, yard rental and an allowance for accountacy, stationery etc.

So your figures are about right but as I have said if you are operating as a sole trader then your wages are the difference between revenue and costs, what you do with it then is up to you but in my opinion it would be unwise to go into business thinking that you can take a fixed amount in wages each week.

I can see that if £600 a week is your minimum requirement as a wage then you would probably be correct in the assumption that a lot of traction work would not achieve that.

[jmc]

Thanks guys. See to all the blokes that say this forum is ■■■■■■■■ need to think again.

At present i am living on average £300 a week so that would be my minimum. But to everyone that has posted with their costs thanks alot as it gives me a better idea and means i can reassess my calculations which also means i can make a profit. Some weeks may be a faor bit and others maybe not so much but business is business. Thanks again guys

[lee_mat]

if you are going to use the figures which are the most basic of figures don’t forget about other costs and you can bury your head in the sand and look the other way as much as you want but consider other costs such as theft such has having your tank taped at a huge cost and expense has to come off those figures and yes it does happen .damage your fault or not it has to be paid for .no work full stop, delays at port waiting for ferry it does happen ,sickness that truck has to turn a wheel to earn no turn no earn that lease insurance etc etc has to be paid wheres that coming from. calculating ppm and working your figures out is great when its all running smooth chuck a spanner in the works and it can go pear shaped pretty quickly all your direct debits are pretty much fixed whether you like it or not the only flexable cost is sadly your wage and you have to adjust it to cover the costs any newbie looking at these figures never looks at the what if’s example theres someone on here there engine went bang at a cost of thousands over night your weekly so called estimated servicing cost have gone through the roof a large chunk of money has to be found and its not turning a wheel the quoted 72 pound a week profit soon flips into a 72 pound a week loss very quickly not trying to be a defeatist but when your a one my band financed up to the eye balls with that fancy topliner there can be some restless nights and very little you can do to get out of it try tweeking the figures with a week off, gearbox going bang ,no work for a couple of days , headlight smashed and then see what it works out at.

[driveroneuk]

All very interesting reading guys. I wish this type of information had been available on T/net back in 1999 when I put my unit on the road.

Anybody running a 7.5 or 10/12 tonner would like to offer some figures?

[cav551]

One if the most soul destroying mishaps to strike you will be a tyre blow-out on the trailer belonging to someone else, which you end up paying for. They end up with a nice new tyre, but you don’t get any benefit from it. This will be closely followed by being had over for damaged goods, which you decide you don’t want to put through your insurance.

Try your calculations on a per day basis as well - the time it takes to do the job is going to matter as much as how far it is or how heavy it is, that time will clearly be dictated by where it is going.

[matamoros]

lee mat:
if you are going to use the figures which are the most basic of figures don’t forget about other costs and you can bury your head in the sand and look the other way as much as you want but consider other costs such as theft such has having your tank taped at a huge cost and expense has to come off those figures and yes it does happen .damage your fault or not it has to be paid for .no work full stop, delays at port waiting for ferry it does happen ,sickness that truck has to turn a wheel to earn no turn no earn that lease insurance etc etc has to be paid wheres that coming from. calculating ppm and working your figures out is great when its all running smooth chuck a spanner in the works and it can go pear shaped pretty quickly all your direct debits are pretty much fixed whether you like it or not the only flexable cost is sadly your wage and you have to adjust it to cover the costs any newbie looking at these figures never looks at the what if’s example theres someone on here there engine went bang at a cost of thousands over night your weekly so called estimated servicing cost have gone through the roof a large chunk of money has to be found and its not turning a wheel the quoted 72 pound a week profit soon flips into a 72 pound a week loss very quickly not trying to be a defeatist but when your a one my band financed up to the eye balls with that fancy topliner there can be some restless nights and very little you can do to get out of it try tweeking the figures with a week off, gearbox going bang ,no work for a couple of days , headlight smashed and then see what it works out at.

I must have been lucky for the last thirty years then

You are mostly correct though, if I had a decent employed job I would not contemplate becoming an owner operator in todays climate unless I had a foot in the door/contact providing good regular work.

Business is business and all business involves some risk, as someone once said " If you can’t stand the heat, stay away from the fire"

I minimise risks, don’t have a fancy truck, a trucks a tool to me not something to pose in.

Currently running a brand new Axor on monthly rental terms, don’t do many nights out & the truck seems up to the job at the moment.

If & when the ■■■■ hits the fan I have one months rental to pay.

[professor]

I pad bought now I can read and reply to posts all week

[silver_surfer]

Professor:
I pad bought now I can read and reply to posts all week

Steady on, you’ll be buying a v8 next.

[professor]

I do not think I will ever own a V8 as they are far too much money for me and I like to sleep at night and although my Daf has not got the presteige of a V8 it’s good on fuel and gets the job done.As for allowing for breakdowns when you start out in my 3rd month of being on my own my fuel pump back blew apart on mancunion way with tow in and repair that was a grand gone the next week the shaft on the front of the pump went that was another grand with tow in we had very little money and I just wanted to pack in but you get over these things and just dig in.
I have been very lucky in my years in Buisness and we all need a bit of luck ,I think on traction it does not matter who you pull for the rates work out nearly the same and a lot of people say it’s not worth the risk or hassle which sometimes I think is true but if it’s your dream to give it a go and the figures add up I always think it’s worth giving it a go.
I was bought up to work hard and never to live above your means and this has served me well I put a big deposit down on my truck and it will be payed off by the end of the year my diesel I use this week I pay for next week my insurance I pay in one go by doing all these things you make small savings which all add up plus by buying a knew truck I got 2yrs free maintenance

[098joe]

would £450 a day for 300 miles be reasonable? Miles would be based on aggregate 1500 for the week then £1 for any miles over and £1 rebate if under (in case truck did not turn a wheel one day due to ferry delays)

[driveroneuk]

Not enough detail Joe. £1 a mile for anything over 300 a day or over 1500 a week? Either way £1 is very poor.

You’re going to sit for half a day not earning anything because a ferry is delayed? No thanks.