Tuesday, June 9, 2009

Fiscal Year 2008-2009 (June 6, 2008 - June 5, 2009)

The first and, hopefully, hardest year of my lease-purchase is behind me.

I've posted the numbers in exhaustive detail elsewhere so I'm going to try to stick to a subset of the totals, along with some numbers that jump out at me in good and bad ways.

A bad number that jumps out at me is 11,270 Out Of Route miles. This is the difference from the miles I was assigned and the miles it took to complete those assignments. Hill Bros, like most trucking companies uses Rand McNally's "HHG" miles to calculate the paid miles for trips. As truckers anywhere can testify, this ends up shortchanging drivers on most every trip.

The reason the number 11,270 sticks out is that it represents a full month of my driving. In short, I spent eleven months of my time in the past year operating my truck generating revenue and the twelfth month I spent driving around, along with all the expenses (like fuel, and wearing down my tires). This irks me to no end.

I knew before I started that my dedication to efficiency would keep my total miles down, and it did. Just over 12,000 miles per month (including the dreaded OOR miles) is fairly low for lease-purchase drivers.

Ordinarily, the largest single expense for trucks nowadays is fuel, followed by the cost of paying the driver. With my efficiency I managed to flip those two around, taking home almost $68,000 and spending almost $59,000 on fuel.

That 59k was the price I paid at the pump, minus the discount our company gets for its patronage of the various truck stop chains. Then, when it came time to settle up each week, I got paid a certain number of cents per mile in Fuel Surcharge (FSC), which ranged from about 15 to 58 cents, depending on how costly the average price of fuel was that week. This totaled almost $42,000 so instead of paying 59k for my fuel, I was out only about 17k.

Fuel expense is the only area you can make money on in this fashion when you drive for a fixed cost per mile. If you divide that 17k into the miles I drove during the year, it computes to 11.73 cents per mile. I'm not privy to similar numbers for Hill Bros or any other company, but I would wager for company drivers that figure is double, and that is comparing APU-equipped trucks. I doubt most company drivers at companies without APUs see less than 30 cents per mile fuel expense across a fleet.

If you are a company driver, you make more money the more miles you run. As an owner, however, you make more money running miles more efficiently. I could have run 65 or 70 MPH this past year and added another 15,000-20,000 more miles but doing so would have made every single mile I drove less efficient and would have cost me money. As the old saw goes, a millionaire isn't someone who has spent a million dollars but someone who has saved a million dollars.

Overall, there weren't many surprises financially in the first year. There are some things that I would have done differently, but their economic impact was small.

Looking ahead, the biggest change I want to make is taking a full week's vacation this winter, on top of my regular home time. I will also need a full set of tires at some point in the next 6-12 months. My objective is to do both of these things and still make at least as much net pay by next June as I did in my first fiscal year.

How am I going to get there? For one, as my tires wear down they become more efficient. According to the tire maker Bridgestone, a tire worn down to 50% of its tread is 4.5% more efficient than when it was new. Down to just 20% of the tread remaining and the efficiency is up to 6.5%. Four percent of my fuel bill would be almost $2,400 in fuel savings, at the prices I received this past year.

I am really, really, REALLY going to watch my routing like a hawk to kill as many OOR miles as I can. My goal is 7%, which would be about 2,000 miles fewer OOR than this past year.

I did get another engine computer printout from the shop when I had them do a PM last week, and it still shows my MPG in the 7.7 range. I had the belts changed, new shocks all around and other items that I hope will keep everything running swimmingly over the next year.

Check back this time next year!