James E. Olsen saves money in restaurants by using coupons and sneaking in his own soft drinks.
Every year, Ben and Melanie Easters take a three-week trip to Hawaii. Donald and Susan Pardue have lots of big toys, including a motor home and deck boat. James E. Olsen just bought a $330,000 house.
While they’re unlikely to be profiled on “Lifestyles of the Rich and Famous,” they’re all doing quite well for truck drivers. In fact, whereas the average owner-operator who reads Overdrive makes about $41,000 a year after expenses, these truckers earn substantially more.
It takes a special owner-operator to earn big bucks, says Perry Wiseman, an accountant with Truckers Accounting Service in Omaha, Neb. Usually, team drivers or unmarried truckers do the best. Teams tend to earn higher per-mile rates; single drivers can stay on the road longer because they don’t have family obligations.
Lucrative hauls help with the bottom line, but so does having a cheap truck payment or no payment at all. “I have a client out of Arizona who ran pretty hard for four or five years and paid everything off,” Wiseman says. “Now he takes six months off. He doesn’t have a wife at home or kids that require additional revenue.”
Owner-operators who find a particularly lucrative niche are few and far between, he says. Still, Wiseman says disciplined contractors who resist spec’ing trucks with high monthly payments and those who pay close attention to costs can do well whether they earn 83 cents per mile or $1.50. “For every nine guys that are normal, there’s one guy that saves money and tracks everything he spends,” Wiseman says. “It pays to be cost-conscious.”
For the Easters, the Pardues and Olsen, staying aware of costs and getting in the right niche were the first steps on their road to riches.
THE BEAN COUNTER
James E. Olsen
General commodities hauler
James E. Olsen likes numbers. “My accountant says I’m so anal-retentive that I should be an accountant,” Olsen confesses. For instance, he keeps a notebook of out-of-route miles and, as with dozens of other operating statistics he can rattle off, knows that in the past 10 years, he’s averaged less than 5 percent out-of-route miles.
While such attention to detail may border on obsession, it pays off for the 54-year-old trucker. His willingness to live cheaply, to avoid expensive purchases and to take advantage of special deals and opportunities are a few of the things that set him apart from most owner-operators.
Olsen typically earns $8,500 a month in revenue. But he’s pocketing more than $6,000 before taxes and after expenses – twice as much as many operators can net. While the revenue is good – Olsen averages about 85 cents a mile driving for Schneider National – it’s what he doesn’t spend that gives him far more income than the average trucker.
“I’m always looking for the cheapest fuel,” he says. When he finds it – usually at a Flying J truck stop, Olsen says he takes advantage of the company’s loyalty program to save even more. “I charge all my expenses on a Flying J preferred member credit card, and I get a penny to a penny and a half off their fuel price.”
Before he leaves on his usual three-week trips, he checks the list of fuel prices for each truck stop on Flying J’s website. “I download it, print it out and take it with me,” he says. Throw in Schneider’s fuel surcharge, Olsen says, and, “I’m running pretty close to a buck a gallon for fuel.”
Olsen also saves money even when he eats by using Flying J coupons, of which he gets about $25 worth in a month. One day in February, for example, he paid for a salmon and cottage cheese lunch with $5 and $2 coupons, then put the $1.76 tip on his credit card to earn the fuel rebate credit. He often brings his own soda with him – saving about $1 a day.
At least $2,500 stays in Olsen’s business checking account with Bank of America so that he doesn’t have to pay the monthly fee of $7.50. He uses mapping programs to avoid out-of-route miles because every missed turn has a cost.
Olsen is also thrifty with his diesel. He says he knows the terrain he’s driving and keeps the speed down so he can average 7 mpg to 7.5 mpg loaded. Other truckers speed to get to a delivery early, but then have to idle to stay warm, Olsen says. Driving slower and timing his arrival closer to deadline cuts down on wasteful idling and on maintenance expenses. “My truck is shut off even when it’s zero degrees,” he says. “I’m not in the truck when it’s that cold. I’m in Schneider’s facility.”
Even when he is forced to idle, he saves money because his 1998 International 9800 has optimized idle control, something Olsen spec’ed because he knew it would pay for itself. When he ordered the truck, conventionals cost nearly $20,000 more than cabovers, so it was an easy decision to go with the cabover. “The way I look at it, I’m a businessman first, a truck driver second,” he says.
The other features he spec’ed contribute to comfort or efficiency – such as leather trim, two-speed fans to stay cool in the summer and an onboard computer so he could keep track of his statistics. Even with the extras, the truck cost less than $85,000; now that it’s paid off, Olsen has much more money to keep.
When he bought his first truck from Schneider, a 1989 cabover, he paid $19,000 for it. He sold it to a local hauler four years later for $10,000, and put that aside in a savings account, which has been earning interest for the past six years. “Now I’ve got more than $10,000 if I need it for an engine rebuild,” he says.
Finally, Olsen’s saving aggressively for retirement, and his personal finances are clear of the sort of expenses that can cripple other owner-operators, such as a car note and credit card debt. It makes affording that big new house in southern California easier.
Olsen was an operations manager for Wick’s Furniture before he made the leap into trucking. But even in management, he says, he didn’t make the kind of money he now makes in trucking.
Ben and Melanie Easters
Where Olsen hauls dry-van loads in a standard over-the-road schedule, Ben and Melanie Easters’ hauls with Panther II Transportation are anything but typical. As expediters, the Easters are part of a lucrative trucking niche and average $1.60 a mile. Since they’ve paid off their truck, their costs average only 45 to 50 cents a mile. With their operation clearing more than a dollar a mile, the Houston couple has to drive only 110,000 to 115,000 miles a year – relatively low miles for a team operation – to earn a substantial salary.
“When people see that you’re willing to work hard and take care of them, they will take care of you,” says Ben Easters. He says their formula for success includes high-paying freight, great fuel efficiency, hard work and performing as much maintenance as they can. The biggest part of their story, though, is hauling for an expedited carrier.
“It’s much easier than what we used to do,” Easters says of their former truckload operation that involved longer stops. “We were working at 84 cents a mile (for a large carrier) and just about going broke.”
But the name of the game in expediting is time. The shippers that send auto parts, airplane parts and chemicals are willing to pay more per load since the freight is usually critical to a major manufacturing operation and needs to go straight through with little or no stopping.
“If you look at expediting on a mile-per-mile basis, it pays better than general freight,” Easters says. “We don’t make as many miles, but we make more money per mile.”
Such a job comes with some sacrifices. Expediters are often stranded, waiting for a load in cities where they may not want to be. “A lot of truckers would love it, but a lot more would go crazy from the waiting periods,” Easters says. The Easters don’t mind because they enjoy reading and visiting nearby attractions.
The pair also benefits from good loads because of their availability. Expediters say if you earn a reputation as a hard worker and don’t turn down loads, dispatchers will give you lucrative freight. “They’ll treat you like a professional, and they’ll pay you like one,” Easters says.
The couple also has special clearances for security programs in Canada, meaning that while others wait at the border, their truck zips through. That makes the couple attractive to shippers who need to expedite loads across the border.
On the cost side, the couple does much of their own maintenance on their 1999 Volvo 770. They buy their food at Wal-Mart and eat most of their meals in the truck. Since expedited freight is often light, they save on fuel efficiency and maintenance costs. Their truck is paid off, which means another $2,900 a month in their pocket. The Easters plan to repair it as needed and keep it in service for years.
“We’ve always been comfortable in our earnings, but since we came over here to expediting, we’ve been making better than we thought we would,” Easters says. “This is a dream.”
Donald and Susan Pardue
Military and government haulers
Owner-operators Donald and Susan Pardue say their truck earns an average of $2.40 a mile – whether the truck is loaded or unloaded.
Donald Pardue says most truckers don’t believe him when they hear that, but then most never get the chance to haul what he does. The Pardues drive a show-quality 2002 Peterbilt 379 and own a variety of trailers that help them move important military vehicles and government loads – many of them top-secret and under heavy security. They earn more than $300,000 a year in revenue and still take home a substantial sum after paying for the fuel their 600-hp Caterpillar consumes, a big truck payment and other expenses.
That income helps pay for toys, like the couple’s motorhome, 22-foot deck boat, motorcycle and 1940 Ford. A premium hauling rate, however, isn’t the only key to the Pardue’s income.
“I try to take advantage of everything that the big businesses do from a tax standpoint,” Pardue says. “I’ve run into so many owner-operators who don’t know what to deduct and what they have to pay. Are you claiming this? Are you doing this? They’re using tax accountants that aren’t familiar with trucking.”
The Pardues, however, do their own bookkeeping and taxes, then get their accountant to sign off on the tax returns and file them. They save thousands of dollars in depreciations and deductions that other truckers miss because most accountants don’t understand the tax breaks owner-operators can take, Pardue says. “We’re not doing anything illegal, we’re just following the IRS’s rules.”
The couple also buys their equipment new because of warranties and because at their rate per mile, any downtime hurts. “If I buy used, I’m taking over someone else’s headache,” he says. “I don’t know if they took care of it. I pay a premium, but it’s worth it and I get three years of free running with no headache and no downtime.”
Like other savvy owner-operators, the couple performs some of their own maintenance and eats many meals in their truck. “I use truck stops for two things: fuel and water. We came all the way across country this week and ate one meal at a truck stop,” Pardue says.
They also take advantage of purchase programs established through their carrier, Landstar Ranger, saving a lot on expensive items, such as tires. They also save on fuel, relying on a gen-set instead of idling.
A bigger part of their high-income formula is capability. Hauling the kinds of loads the Pardues pull requires serious military clearance, an impeccable safety record and investment in equipment. “This is not the kind of career you just start in overnight,” Pardue says. “I’ve been doing it for 18 years.”
The couple invested in specialty trailers and will do the things some truckers aren’t willing to do, such as tarping in subfreezing temperatures. “The main problem with most truckers is they’re not willing to give 110 percent,” Pardue says. “They’re willing to operate four to five days and then sit on their butts.”
On the other extreme, Pardue recalled friends who ran team at 78 cents a mile, focused on getting miles. They wore out a truck every two years and earned little money. The friends never had any time off, Pardue says, whereas he and his wife can afford to shut down for weeks at a time, so long as they’ve worked hard when the freight was good. “There’s times when our business is slow. I take the time to do the other things that I do.”
When the freight is available, as it was for them in January, they don’t take time off. “We nearly ran out of hours as a team,” he says. “January will probably be the best month we’ve ever had.”
Pardue says if a truck driver wants to make a great living he has to specialize and do what it takes to get the job done. “You’ve got to make up your mind – is this what you want? Are you willing to do what it takes to accomplish it?”
If you are, and you specialize, the money will follow, Pardue says. And you’ll be on the road to riches.