How much does an owner operator make? This is a repeated question in trucking circles. New truckers who start out as a driver and then take the faithful steps of being an owner-operator ask this question. An owner-operator makes an average of $ 221,039 according
to indeed.com. But the earning varies according to the specialization (type of load they carry). And the time spent on the road etc. Average owner operator salary is much less while considering the expenses like fuel bill, maintenance, drivers salary, food, lodging, truck payments, etc. We are sharing our video on how much does owner-operators make after expenses? Factors
positively and negatively affecting owner-operator’s earnings are given below. Selecting good loads is the difference between profit and loss for owner operators. The place where you select loads from also has a large impact on your profitability as an owner-operator. As a fresher owner operator, you choose a freight broker or a dispatcher, you will find loads but there be a finders fee
charged by the broker or dispatcher. If you try load boards you will get good loads but your per load pay is comparatively less in this option. Owner-operators can be either fully independent or freelance drivers. Freelance drivers
lease their equipment and time to haul loads for a carrier. Now let us learn more about the benefits and drawbacks of leasing a truck to a carrier: There are many benefits of leasing your truck to a carrier: Drawbacks of leasing with a carrier for an owner-operator/trucker: To increase the earning potential of your trucking business: The earnings of any trucking business depend on the loads they haul. Not all hauls are created equally. You can get good loads from multiple places such as: Load boards, Dedicated broker contracts Special government contracts etc. 1.How to subscribe a Load board as an owner-operator?: Getting a load board subscription is essential for a owner operator. You can see the rate and lane where loads are operation in the area where an owner operator wants to ply. It also shows the price of load, credit score, and the reputation of the broker posting the load, dollar per mile of a destination, few backhaul options, etc. A truckload board is a good friend of a shipper and carrier because it acts as a middle man between demand creators and supplying carriers. Once a carrier sets up a favored route, the load board application will send the notification message to alert you of loads coming up. Carriers, brokers, and shippers have trusted the DAT Network, credited as an industry leader with more than 60 million loads per year. Of those, 42 million are either found on the DAT Network first or nowhere else 2.How to set up with a Freight broker for your small trucking business?:Freight Broker is an agency/company who connects owner-operator/trucker/ carrier with the shipper. Broker pitch in for the shippers and find carriers willing to haul their loads. As a new owner-operator, it’s very hard to set up a carrier packet with an established broker. So, new truckers should try to find freight from brokers who are willing to work with them. Here, the owner-operator will have to make sacrifices when it comes to loading payments or dollars per mile. After a while say 6 months to 1 year established brokers will allow you to set up a carrier packet with your company. Having a good broker supplying you loads for a dedicated lane is a great way to earn some Sureshot dollars. You can access the supply capacity of a quality broker to get a very good dollar per mile earning loads. The broker will work with you on a win-win relationship because your success means they create a reputation with the shipper as a quality shipping liaison 3. How to pick a dispatcher as an owner-operator?:Hiring a dispatcher as a logistics arm of your business is a good idea for inexperienced owner-operators. Dispatchers will let you know hazards, weather trouble, road or infrastructure closure, etc beforehand. Which means smoother and more timely operations. Dispatchers also help you with operations, carrier compliance, customer service, and administrative works like billing, collections, and other paperwork. Paperwork support includes:
The dispatch service usually includes:
Not all owner-operators need a dispatcher. If you have dedicated routes with brokers/shippers on to and fro hauls you don’t have to have a dispatcher. Experienced drivers working in known routes don’t need the assistance of a dispatcher to avoid hazards and slowdowns. A carrier with a knowledgeable and efficient operations staff might not need assistance with billing or collections operations 4.How to make more money while driving from one location to another for owner operator?To maximize the dollar earnings for a trucker/owner-operator, figure your niche (where you want to operate), get long-term contracts from shippers/brokers, negotiate for a high dollar per mile load. Increasing the earning potential of your trucking depends on maximizing your income potential by following the money. And reducing expenses by wilful saving and plannings for your trucking business overheads (costs). How to follow the money as an owner-operator? Experience truckers tell the new owner-operators to follow the money, How do you do that? You need to select the best lane for money-making. See all the routes to and fro book loads to a maximum dollar per mile giving lanes. See if you change the fro location a wee bit, do you have an opportunity to earn a lot more money. If so change your fro location. Also, see how to grow your trucking business in 8 steps? This all comes down to being flexible while driving, do not have set routes in mind. Please try to reset your routes according to earnings (dollar per mile) from a potential route. 5.How much does the owner-operator makes per mile depends on the freight they haul.The income that an owner-operator is likely to rake in depends on the freight/loads that they haul. There are different truck loads you can ply such as the ones given below: Van truckload owner: An independent owner operator hauling a van truckload can make $175,000 (solo) or $235,000 (team) in average annual income, or about $500-$750 (solo) or $800-$1,000 (team) each day. Tanker owner-operators: hauling liquid truck loads or commodities can earn $210,000 or more in annual revenue. Dray truck loads: Based on their location owner-operators will be able to do drays to and from the ports while averaging $100,000-$130,000 each year in revenue. The earnings of owner-operators depend on the expenses they incur, there are many direct and indirect expenses: 6.There are 9 factors that affect what sort of expense you incur as an independent owner-operator/trucker1. Buying a Semi Truck for owner operators: If you want to purchase a used semi-truck you will have to expend between $ 45000 to $100,000. Many truck sellers will give a wiggle room to negotiate and reduce your upfront costs a bit. If you are planning to buy a brand new semi-truck you will have to expend about $125,000 to $150,000. 2. Leasing a Semi Truck If you as an owner-operator don’t have enough savings or leverage to pay for down payments. And you don’t want to take risk of owning and operating your truck. You can always lease your truck. You have to spend little or no money upfront for down payments. You can expect to expend $1,600 to $2,500 each month, depending on the company you lease from and what type of truck you choose. 3. Documentation
MC/DOT number: $300 4. Insurance:
Your expenses on insurance may amount from $3000-$5000 a year or $250 to $400 per month on insurance. 5. Fuel Fuel is one of the biggest expenses of owning a truck for an average owner-operator. An average owner-operator spends $50,000 to $ 70,000 per annum or $4000 to $6000 each month. A fuel card is an essential tool to reduce fuel filling expenses for truckers. You can make a lot of savings (about 37¢ to 45 ¢ on a gallon ) using TCS Fuel Card. 6. Booking Quality Freight:
7. Truck maintenance and upkeep: Your maintenance cost depends on if you have a new or second-hand truck. How much do the parts cost for the brand of truck you own? where do you get your maintenance from? If you are working with a broker (if you have a fuel card or you have leased from a company) you can reduce your costs. These companies will have agreements/ programs with maintenance locations that will help you to offset your costs. 8. Food and Drinks If an owner-operator wants to save money while driving he/she must invest in making food. Buying food
from grocery shops can save many a penny vs. spending more on costly meals at restaurants. 9. Taxes Owner-operators find it difficult to save up for quarterly tax deductions. It’s recommended to set aside 25 to 30 percent of your weekly income for quarterly tax deductions. Both drivers and owner-operators can reduce tax burden but deduct expenses. Make a folder/file for all your expense bills/invoices etc. keep them in an orderly manner. Such invoices and bills add up to hundreds of dollars of tax deductions. 7. The below are some best practices in business for owner-operators/truckers that help you to avoid a tax surprise while taxes are due:
Some of the tax deductions available for owner operators: Vehicle expenses and maintenance costs – You can deduct fuel, parts, repairs, and supplies, including floor mats, bungee cords, tarps, oil changes, jumper cables, cleaning products, CB maintenance, vehicle inspections, etc.
Expenses that drivers incur while on the road are deductible. This includes meals, lodging, and laundry, as well as toll booth and parking costs
This includes items you’ll need to take care of yourself on the road, including sheets, blankets, grooming supplies, detergent, shaving supplies, toiletries, etc. Below items also are deducible when doing your yearly tax: Subscriptions to trade publications Union and trade association dues Licenses and regulatory fees Liability insurance premiums The amount an owner-operator truck drivers make a year differs according to expenses and deductions they incur. If as an owner-operator you have planned and saved up for such cuts or deductions you are on dry land. Being prepared and saving up reduces rash surprises, whether it the maintenance bill, taxes, or insurance premium. Kept the worst and save your best to tackle surprises. How much do ownerMost owner-operators who average between 8,000 and 10,000 miles per month, spend between $50,000-$70,000 annually or $4,000-$6,000 each month on fuel.
How much should an ownerA good rule of thumb can be around 1/3 of the gross earnings for an owner operator's wage paid to himself.
Do truck owners make good money?Yes, you can make money from trucking, if you get it right. The average net profit margin of a trucking company averages between 2.5% and 6%. That means it can be a profitable business and an industry that you can make a decent living from, provided you get into the trucking business with your eyes wide open.
Is it profitable to be an ownerAn owner operator career can be both profitable and satisfying, even in this volatile economy. But be smart. It's absolutely critical to do the 'thinking' BEFORE buying that first truck. Your success depends on it.
|