Look both ways before you leap

| March 07, 2006

For owner-operators:

  • Quantity of miles

  • Fuel surcharge
  • Practical miles vs. household goods miles
  • Access to group rates on fuel, service and parts
  • Length of orientation

Source: Drivers, accountants and recruiters

Do the Math
Todd Amen, president of American Truck Business Services, estimates the average owner-operator will spend nearly $11,000 in a switch from one carrier to another just to gain 2 cents per mile. Amen’s company, which provides accounting and other business services for thousands of owner-operators, calculated “hard” costs – those which would accumulate on average during a three-week layoff – based on a business that runs 130,000 miles a year. The “soft” costs of getting up to speed at a new carrier – learning new routes and procedures, determining profitable lanes and getting access to more lucrative loads – depend largely on situation, but Amen says it’s a fair estimate.

For company drivers, the costs are much lower because they avoid fixed business expenses like truck payments, and their new carrier will often pick up the tab for some expenses, Amen says. It also takes less time to make the switch – less than one week in some cases.

“For a company driver to make this change, it could cost him as little as $1,000,” Amen says. “The new carrier will buy him a bus ticket. He doesn’t have to turn in the truck – he probably abandons it at a truckstop. It might cost him five days of down time instead of three weeks.”

Still, personal costs like mortgages, food and bills continue to accumulate during that time off, and new hires are not as productive. It can take months for a company driver just to get as many miles at his new carrier as he was getting at the previous carrier. Such costs should be factored in before a move, experts say.

Switching jobs for 2 cents a mile
Three weeks of fixed expenses -$2,247
Three weeks of opportunity costs (lost loads) -$7,635
Variable expenses saved $3,450
Increased revenue over 12 months $2,600
Daily personal expenses -$2,100
Total “hard” costs after 1 year -$5,932
“Soft” cost of getting up to speed -$5,000
Total cost: $10,932

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