Small scale hauling/towing costs

[Philbo]

I have a '97 Dodge 1 ton (DRW, cummins, 5spd, non-dump flatbed) and find myself using it to haul or tow with for work (small-scale logging, moving lumber, firewood, etc) enough to really sit down and think about the true costs involved with running it like this. I've been charging (and getting) $2 per loaded mile so far on a handful of hauls just to cover operating expenses and have something for my time, but am wondering if that really is covering it on a sustainable basis.

I'm trying to wrap my head around all costs (yearly, daily, and routine maint) and would like some input from others who know more than I do.

Tires - (6) I like to use off-road mud style tires as opposed to highway type tires because I find myself going off road enough to definitely warrant it, so realistically I don't think they would last more than 20k miles from new. Maybe less if constantly pushed close to max. Load Range E normally ran at around 80 psi. Is this realistic? Is so, I can take costs of replacement tires and factor that in on a per mile cost.

Fuel - Easy enough. Diesel is around $4/gal here so cost is $0.27/mi @ 15 mpg avg. If I'm hauling or towing then I really average more like 17mpg, but 15 is the bottom of the range.

Maintenance - This is where I have some trouble factoring in all the wear and tear items past the simple stuff like oil changes/fuel filters/tires. Don't have enough experience with doing this or this truck to know my yearly expense with brakes, or other suspension items that can easily be taxed more than normal driving.

Insurance/Registration - pretty easy to figure out and overall about $400/yr for both combined.

My time - whatever is left over when everything else is covered. Would like to ideally have that be a minimum of 50% of my initial per mile rate, but really more like 60-70% would be nice, but don't know if that's realistic.

Any pointers or stuff I'm missing here? I'm not making a business out of this or anything at this point, I just want to know if I'm short-changing myself when I'm doing this.

Btw, I own the truck outright (no payments)

 

[Jere39]

You've certainly got a good start on your calculation. I think you need to complete the calculation to establish a cost/mile for operation of your truck. It probably would change very little year over year. Then you can easily document your mileage used for the work. I hate to bring this up, but is your insurance coverage adequate for a vehicle used in the conduct of business? I don't recognize WNC, sorry, but in many jurisdictions an insurance policy for a vehicle would likely exclude conducting business, like delivery services, taxi services, . . .

Good luck. Alternatively, you could just go with the IRS value placed on driving your own vehicle for business which I believe is $.56/mile. Certainly does not include any operator compensation.

 

[Red Elm]

IDK what your actual costs would be; I can only tell what is paid in the forestry business in western Illinois.

Use of a single vehicle such as a pick-up: $0.56 per mile as is IRS rate as stated above. That may have gone up for 2014.

3/4 or 1 ton pick-up pulling THEIR trailer: $1.00/mile

Same truck pulling YOUR trailer: $1.25/mile.

All of these are for all miles, loaded or empty. If your truck is rolling it is incurring expense. If they only want to pay loaded miles double these.

THESE PRICES DO NOT INCLUDE THE COMPENSATION OF THE DRIVER!!! That is usually an hourly amount agreed upon before hand.

These may or may not suit your area of operations. Good Luck.

 

[Red Elm]

Hauling a heavy load with a flat-bed like you stated lumber would be $1.00/mile when hauling, but then the $0.56 on the empty back-haul. That is the one instance that the rate changes.

 

[GeeVee]

Need to add cents per mile for replacement cost, and start a savings account solely to buy the next truck. If you aren;t capturing a return on the investment, you're going to have a big capital outlay when you need to replace it.

 

[nathon918]

I have a '97 Dodge 1 ton (DRW, cummins, 5spd, non-dump flatbed) and find myself using it to haul or tow with for work (small-scale logging, moving lumber, firewood, etc) enough to really sit down and think about the true costs involved with running it like this. I've been charging (and getting) $2 per loaded mile so far on a handful of hauls just to cover operating expenses and have something for my time, but am wondering if that really is covering it on a sustainable basis.

I'm trying to wrap my head around all costs (yearly, daily, and routine maint) and would like some input from others who know more than I do.

Tires - (6) I like to use off-road mud style tires as opposed to highway type tires because I find myself going off road enough to definitely warrant it, so realistically I don't think they would last more than 20k miles from new. Maybe less if constantly pushed close to max. Load Range E normally ran at around 80 psi. Is this realistic? Is so, I can take costs of replacement tires and factor that in on a per mile cost.

Fuel - Easy enough. Diesel is around $4/gal here so cost is $0.27/mi @ 15 mpg avg. If I'm hauling or towing then I really average more like 17mpg, but 15 is the bottom of the range.

Maintenance - This is where I have some trouble factoring in all the wear and tear items past the simple stuff like oil changes/fuel filters/tires. Don't have enough experience with doing this or this truck to know my yearly expense with brakes, or other suspension items that can easily be taxed more than normal driving.

Insurance/Registration - pretty easy to figure out and overall about $400/yr for both combined.

My time - whatever is left over when everything else is covered. Would like to ideally have that be a minimum of 50% of my initial per mile rate, but really more like 60-70% would be nice, but don't know if that's realistic.

Any pointers or stuff I'm missing here? I'm not making a business out of this or anything at this point, I just want to know if I'm short-changing myself when I'm doing this.

Btw, I own the truck outright (no payments)

since youre hauling a lot you should look into 19.5" tires, theyre a bit more money up front but they last much much longer than 16's and you can get pretty aggressive tires with a very high mileage rating along with a higher load rating...
as for charging, you should have a minimum price + mileage, because with out that you could only be hauling 2 miles and make $4.00, and that's not even worth getting out of bed for...

 

[muddstopper]

Eveybody looks at things different so i will throw in my two cents worth
first off, that truck needs to be looked at as an investment. With new trucks cost $50grand now days, that a lot of money to just use up and have nothing to show for it. To factor in a price for using that truck, look at is as if you put the purchase price in a mutual fund just drawing a rate of return. I have adverage over 21% the last five years but only 9% over a 10year period. With that in mine if what you charge doesnt match the cost of the truck, as well as any interest paid borrowing the money, and what that same money would have made if simply invested, then you are wasting your time and working for less than you could have made sitting at home on the couch.

Other cost include many of the things already mentioned, insurance, maintenance, fuel, tires etc. You can make a pretty good estimate of those cost an didive it by the total number of miles you drive the truck each year and get a close ballpark figure. Again, you should factor these cost against what the money would earn if invested. to make sure you are getting a decent return on the investment.

Then you have to factor in your time, you know what your worth, charge for it.

Finally, just recovering money spent and potential investment interest wont pay the light bill or put food on the table. I had a ruel of thumb I used to determine priceing when I used to run a business. Cost times 3. I broke my cash flow down into 3 basic parts, part 1, My cost, materials, fuel ect. I figured my profit should match my cost so that was part 2, and part 3, was money for unseen cost i couldnt plan on. You can plan on a new set of tires, but put a new set on the truck and then bust one on the highway, hard to plan for that. Somebody break out a window in the truck, again hard to plan. You have to plan for the unexpected, even though you dont know what that unexpected cost could be.

 

[DanTheCanadian]

Depending on the situation I sometimes charge a loading fee of 40$. Then I charge .55 per km, exluding my time. This way if I only have to go a little way its still worth doing.

 

[jwade]

Eveybody looks at things different so i will throw in my two cents worth
first off, that truck needs to be looked at as an investment. With new trucks cost $50grand now days, that a lot of money to just use up and have nothing to show for it. To factor in a price for using that truck, look at is as if you put the purchase price in a mutual fund just drawing a rate of return. I have adverage over 21% the last five years but only 9% over a 10year period. With that in mine if what you charge doesnt match the cost of the truck, as well as any interest paid borrowing the money, and what that same money would have made if simply invested, then you are wasting your time and working for less than you could have made sitting at home on the couch.

Other cost include many of the things already mentioned, insurance, maintenance, fuel, tires etc. You can make a pretty good estimate of those cost an didive it by the total number of miles you drive the truck each year and get a close ballpark figure. Again, you should factor these cost against what the money would earn if invested. to make sure you are getting a decent return on the investment.

Then you have to factor in your time, you know what your worth, charge for it.

Finally, just recovering money spent and potential investment interest wont pay the light bill or put food on the table. I had a ruel of thumb I used to determine priceing when I used to run a business. Cost times 3. I broke my cash flow down into 3 basic parts, part 1, My cost, materials, fuel ect. I figured my profit should match my cost so that was part 2, and part 3, was money for unseen cost i couldnt plan on. You can plan on a new set of tires, but put a new set on the truck and then bust one on the highway, hard to plan for that. Somebody break out a window in the truck, again hard to plan. You have to plan for the unexpected, even though you dont know what that unexpected cost could be.

very well sai. i dont think philbo can go wrong if he follows this advise. again nicely stated

 

[Philbo]

Yeah, my minimum is $40 just to make sure I get something decent for my time even if it's shorter than 15-20 miles.

All good comments. Thanks for the insight! Keep em coming

 

[Philbo]

Eveybody looks at things different so i will throw in my two cents worth
first off, that truck needs to be looked at as an investment. With new trucks cost $50grand now days, that a lot of money to just use up and have nothing to show for it. To factor in a price for using that truck, look at is as if you put the purchase price in a mutual fund just drawing a rate of return. I have adverage over 21% the last five years but only 9% over a 10year period. With that in mine if what you charge doesnt match the cost of the truck, as well as any interest paid borrowing the money, and what that same money would have made if simply invested, then you are wasting your time and working for less than you could have made sitting at home on the couch.

Other cost include many of the things already mentioned, insurance, maintenance, fuel, tires etc. You can make a pretty good estimate of those cost an didive it by the total number of miles you drive the truck each year and get a close ballpark figure. Again, you should factor these cost against what the money would earn if invested. to make sure you are getting a decent return on the investment.

Then you have to factor in your time, you know what your worth, charge for it.

Finally, just recovering money spent and potential investment interest wont pay the light bill or put food on the table. I had a ruel of thumb I used to determine priceing when I used to run a business. Cost times 3. I broke my cash flow down into 3 basic parts, part 1, My cost, materials, fuel ect. I figured my profit should match my cost so that was part 2, and part 3, was money for unseen cost i couldnt plan on. You can plan on a new set of tires, but put a new set on the truck and then bust one on the highway, hard to plan for that. Somebody break out a window in the truck, again hard to plan. You have to plan for the unexpected, even though you dont know what that unexpected cost could be.

Good advice here. Appreciate that!

To put a couple of things into context, yes new trucks like these run $50k, but I paid around $4k for this one and the body will likely rust away on me before the motor quits (hopefully, but then again you never know about the unexpected.) At that point, I'll take the Cummins and swap it into something else in a similarly inexpensive price range (under $5k.) I also didn't buy the truck solely for hauling. It's 1 of our 2 primary vehicles for the family and pulls duties doing other things besides hauling for profit. I just happen to be using the truck for hauling a handful of times per month and see that continuing so I just want to be fair to myself by covering my expenses and making something decent for my time. I do understand where you're coming from about the investment approach and interest, but it's not strictly a "business" vehicle.

Cost x 3 is a good rule of thumb. I like that.

Thanks for the great response.

 

[muddstopper]

I know what you mean about the truck, I got "junkers"I keep around to. I guess I shouldnt say junkers, maybe less than new is a better phrase. Still applys tho. I dont know how many folks I see think they can charge lower prices just because they already own the equipment. Truth is, it doesnt matter if Grandma gives you a truck or you buy one, if you dont factor in the replacement cost of that vehicle in your priceing, sooner or later that truck (or any piece of equipment for that matter) is going to die and then you have to replace it. If you plan for that replacement when pricing your jobs, you will have the money to replace it. If you dont plan and include in your pricing replacement cost, you either lower your standard of living by financing another truck, or you go out of business.

I also know what you are saying about just doing some parttime hualing to make a little side money. I did the same thing with my hydroseeding business. I bought a new hydroseeding machine thinking I would just pick up a little work on weekends. Well, it wasnt long before I was working 7 days a wk and had more work than I could handle. I bought anothert hydroseeder, a bigger one, so I could get the work done faster. Then I bought another one, soon I had three trucks, three seeders and three crews, and was still working 7 days a wk. Except for the first hydroseeder, I paid for all this equipment with cash, from the money made with the business. At the time I had another full time job that required me to be out of town during the wk. My business grew so fast and was getting to big for me to handle, I finally had to make a decision, sell the business or quit my full time job. Equipment was paid for, and i was tempted to quit my full time job. I decided to keep my full time job because of the insurance and retirement. I sold the business.

I know this doesnt mean squat to you, but I think you get the ideal. You cant grow a business if you dont cover your cost. Those part time jobs can turn into full time jobs if the business model you put in place when you start the business, is designed to make money and not just pocket change.

 

[zogger]

NEED INFO I HAVE A ONE TON FLAT BED 8 1/2 LONG 7 1/2 WIDE 2 FT SIDES SPLIT IN HALF. I WAS TOLD I COULD NOT GET 2 FOR RANKS OR FACE CORD. I MEASURED MY PICK UP BED AND THE AREA I HAVE ON THE ONE TON IS A LITTLE BIGGER THAN 2 PICK UP BEDS. I FIGURE PLACE ON THERE I COULD GET THREE RANK. OR AM I WRONG WHAT I AM TRYING TO DO IS CUT MY COST TO TOWN. MY ONE TON HAS A 454 ENGINE SOME BODY DO THE FIGURES FOR ME

Filled level to the top of the sides, you have almost exactly one cord. The math is 127.5 cubic foot in your flatbed, a cord is 128 cubic foot, close enough. If by "rank" you mean one third of a cord, yes, you can get three on there. Now, that is tightly stacked, loose thrown in, you need to make the sides higher.

 

[CRThomas]

Thanks

 

[CRThomas]

Need to add cents per mile for replacement cost, and start a savings account solely to buy the next truck. If you aren;t capturing a return on the investment, you're going to have a big capital outlay when you need to replace it.

We have found in our firewood business we figured at the end of the year. Backing up three years after all exspences $80.000.00 bought a new truck from that $48.000.00 next year made $80.000.00 bought a replacement truck $3500.00. Last year $70.000.00 after all exspences bought another truck $20.000.00. After taxs we paid $7.000.00 for all three years That is in the business account over a $100.000.00 if it had been empty we would be losing

 

[esshup]

I don't think $2/loaded mile is enough, including labor. I think $3/loaded mile would be closer to accurate, then add in your labor on top of it. It doesn't matter if the truck is solely used for business, or a 2nd vehicle for the family, work is work. In my VW Jetta diesel, I keep great records for vehicle expenses. Fuel, maintenance, tires, insurance, etc. I've put 251K on it. I figure it costs $0.65/mile without any pay going into my pocket for my time. Thats even averaging 50 mpg. I have a dayplanner that stays in the car. EVERY day I write down the beginning and ending miles, and what was used for business or for pleasure. I keep tabs on every penny spent on it, but don't figure in my labor for maintenance - just actual $$ out of pocket.

 

[svk]

Question: What are you hauling? If it is logs or firewood, the "delivered" price (IMHO) should include compensation for the driver and vehicle mileage up to a certain radius, say 25 miles. If you are beyond that radius then the price goes up, either by a fixed amount to another radius or a cost per mile. If you are hauling something that you didn't sell to them, the delivery charge should be significantly more to compensate you for your time and mileage.

You are on the right track to determine what actual costs are; add up your fixed expenses (like licensing and insurance) and your variable costs (determined by number of miles travelled like fuel, standard maintenance items, etc) PLUS a significant percentage to save up for unexpected expenses like a transmission, motor, or who knows what else. I think you would want a decent amount (say 5K minimum) as a rainy day fund for when Mr. Murphy shows up. Also, I would run a couple of scenarios to give you an idea of what the actual cost per mile will be. IE at 10,000 miles per year the cost per mile will be higher than 20,000 miles per year because insurance and licensing are a larger percentage of the total cost.

 

[STLfirewood]

Like someone else stated check your insurance. I just checked into delivering small loads of pipe. I would have hauled no more then 15k pounds within a 400 mile radius. They wanted 400ish a month for liability on a truck like yours. I was only going to deliver a few loads a month. The cost of the insurance makes not worth it.

 

[CRThomas]

I have to haul my firewood to customers about 50 mile round trip I only deliver normaly 200 to 300 bundles at a time. When I deliver the lady's over on Scott Street I take them 6 or 7 ton. The wood they get is knots that don't wrap nice. I back up to the middle house and dump all ten of the lady pay me when they can. That's 5 houses that burn wood they been my customers for years but I am not a bulk firewood person The lady's got screw so many times I felt sorry for them but they get what I would push over the hill for fill. So every once in a while I do a good deed I think later

 

[CRThomas]

You've certainly got a good start on your calculation. I think you need to complete the calculation to establish a cost/mile for operation of your truck. It probably would change very little year over year. Then you can easily document your mileage used for the work. I hate to bring this up, but is your insurance coverage adequate for a vehicle used in the conduct of business? I don't recognize WNC, sorry, but in many jurisdictions an insurance policy for a vehicle would likely exclude conducting business, like delivery services, taxi services, . . .

Good luck. Alternatively, you could just go with the IRS value placed on driving your own vehicle for business which I believe is $.56/mile. Certainly does not include any operator compensation.

if you deliver good wood with good service you can charge high dollar if people want to dicker on price you don't want there business you will get a lot of that. That's the reason I don't haul bulk wood only on special times for old customers