The ads call out to you from trucking magazines and websites: We pay 100 percent fuel surcharge! Free base plates! Paid loading/unloading! With so many carriers recruiting owner-operators and so many factors to consider within each pay package, it’s no wonder that many owner-operators have a tough time estimating potential revenue from advertised compensation packages.
While comparing pay packages is a time-consuming, often frustrating endeavor, the key is to start with an understanding of what you need to make each month to cover your expenses. Only then will you know whether a carrier’s pay package is a good deal for you. Figure your total cost-per-mile by adding fixed and variable costs for the year and dividing by 12 to get the average per month. Divide that number by average monthly miles to determine your cost per mile for a given month. This is what you need to make monthly just to break even.
Be sure to include non-revenue miles – such as deadhead or a trip to the shop – in your monthly estimate; those miles also cost money. If a company agrees to pay you a dollar per mile for deadhead but it costs you $1.10 to operate the truck, you’ll have to make up that lost 10 cents per mile elsewhere.
For some elements of a pay package such as detention pay, it’s also helpful to know your revenue per hour of driving. To determine this, multiply your per-mile rate by your average driving speed. For example:
Pay rate per mile $1.10
Average speed x 59 mph
GROSS REVENUE PER HOUR = $64.90
Knowing your hourly rate helps you determine whether the detention pay you’re offered adequately compensates you for the revenue you lose sitting on a load.
