Choices

One of the most difficult concepts I have tried to grasp over the past number of years and the one I cherish the most is the one that goes “I am in this position because I chose to be here. I take 100% responsibility for me.”

I am not trying to get to heavy on you here but think about it. The situations you are in with your family, friends and the carrier you drive for are because you choose to be in those situations; either good or bad. There are no chains that keep you where we are at, regardless if it’s either a good or bad situation. You are in charge of you. This is a simple concept… right?  Well, if that is true then why do we seem to be so hell bent on sticking with the ordinary in our lives when the extraordinary is within our grasp? We all have the power to change if we are motivated to do so.

So you are not happy with your current carrier and you are contemplating making a change (as many of you are or you might not have even picked up this magazine). What do you do now? Many Drivers will simply look through recruiting ads and make a short list of carriers to call and see what they have to say. They might listen to what their buddies have to say about where they’re working or listen to the CB rumor mill etc. Each of these little bits of reconnaissance will have some limited value.

If you’re considering leaving your current carrier, my question to you is…” what have you done to make the place you are at now a success and why is it bad?” Ask yourself. “What can I control in this situation and what can I do to minimize my cost of operation and maximize my profit?” If you haven’t done this exercise then you haven’t given yourself the opportunity to succeed and feel good about the quality of job you do.

So what can you control as an Owner Operator? You control many significant operating expenses such as your MPG. Is it as high as you can possibly get it? You control your maintenance cost. Are you doing everything necessary to minimize this expense? Do you have a good relationship with the shop that does your work? Do you handle as many minimal roadside breakdowns as you can yourself by carrying your own tools, grease etc.? Do you have a good Accountant and financial support staff who know trucking and can offer advice when needed? Are your financing costs in line with what they should be? Your relationship with your dispatcher – is it cooperative or aggressive? Are your living expenses outside your truck reasonable?

Now look at what you can’t control. You cannot control the number of miles you are offered and if there aren’t enough for you to make a living you will need to move on ASAP. You also can’t control certain costs your carrier is probably going to pass on to you that might include your base plates, insurance cost etc.

Let’s try doing it this way… grab a piece of paper and draw a vertical line down the middle of the page. List all your fixed expenses on one side. This may include your truck payment, base plate and insurance if it is a set amount. On the other side of the line list all of your variable expenses such as fuel, maintenance, on-road meals, calling cards and tolls etc. When you have finished collecting all the things that it cost you to run your business, fill in the dollar amounts that each one of these cost you each month. Try not to go into shock as you see the numbers all in one spot. It can be shocking but please be honest with each entry.

After you have done this look at each item. On the fixed side, try and see if everything listed is in line to what you know about the industry. Although these items might have a fixed payment schedule attached to them you should still feel comfortable that they are reasonable. If you’re not sure, your financial advisor should be able to help you here.

The variable side is often where the savings can be found. These items are within your control and every opportunity should be explored to ensure that these items are minimized. Obviously, you don’t want to go cheap on your maintenance cost and bring on a big expense later. So, when I say minimize I don’t mean to be penny cheap and dollar stupid. What I mean is that you have to be comfortable that all the expenses wrapped around what it cost to run your truck (business) are in line and you are doing your best at all times to keep these under control and always with an eye to reducing them further.

I am not trying to talk anyone into leaving the carrier that they’re currently working with. I am simply trying to slow down the Owner Operators who have had 5 jobs in 5 years and cannot understand why everyone’s always picking on them. Look in the mirror… one of the reasons you became an Owner Operator is for the independence; when you made that decision, you became a small business person. Are you sure you are acting like one?

One of the miracles of trucking is the maze of different pay packages that exist in this business. No two are alike and they all have their own little nuances that can make or break an Owner Operator or Company Driver. One of the biggest fallacies is that bigger is always better. It may very well be that the carrier that advertises the highest gross rate will not be the carrier that will put the most in your pocket. Shop wisely and investigate what processes and offerings each carrier provides that might help you reduce your variable cost. Some carriers offer reduced shop rates, some might offer discount group offerings on cell phones, fuel or health benefits. Whatever it might be, investigate it all and see what might be available that you can leverage to reduce your variable savings and help you to succeed.

This advice is applicable for Company Drivers also. While you don’t have truck payments and base plates to worry about, you still face many variable costs which dictate how profitable you’re driving career is and how much money you take home at the end of the day. Take a hard look at your meal and phone costs. Can you save money (and remove an inch from your waistline) by choosing your meals carefully? Absolutely! Do your homework and compare cell phone packages. Saved pennies quickly turn into saved dollars.

Take good care and Safe Trucking!

Ray J. Haight
Co-founder
tcaingauge.com