Independent owner operator: costs of business in the year of 2021

These are my operational costs for 2021: excluding my payroll costs (my own wages, social security and Medicare matching contributions)

My total mileage was 91 484 miles:
The cost per mile is $1.42 per mile - the highest I have ever experienced in 8 years as an owner operator:

 

The Maintenance and repairs was the highest ever too:

Most of it is nickel and dime.

Some bigger items were:


I must say that I've owned the truck since 2014 and despite systematic care and addressing issues as they appear, the maintenance costs never get better.
So those who plan on buying a 500 000 miles truck, don't presume that there'll be an end of repairs, emergencies once you pump an X amount to it.
This is an ongoing cost. Buy the time you fix or replace an N-th part on the truck, the parts you replaced at first, in the 1st or 2nd year will start giving out again. It is a vicious circle. I say N-th because there is there is never an end of it.

Therefore, we say how absurdly it seems to buy a used 500 000 truck for $100 000 or more.

 

It is nobody's business to know how much I pay myself, other than that per IRS instructions, I ought to pay myself reasonable wages. I pay myslef wages as a owner of the business and a company driver so I fall under a little different discretion as compared to a plain hired company driver.

Let's see... I drove 91 484 miles out of which about 15-20% must have been whimsical empty deadheads, either by deciding to go home for 700 miles or deadhead out of an area of dislike etc.. Let's say as a company driver I'd be paid 50 cents per mile - is it reasonable enough? So the gross driver's pay - strictly per mile compensation would amount to: 80 000 (payable miles - after excluding - frivolous personal conveyances) would be $40 000. Let's throw another 10K for layovers, detentions, Christmas bonuses and "shut up and do it" fees. So that's $ 50 000 of wages to which, if I were to hire a person on W-2, would mean to pay additional 8-10K (kind of guessing here) in Social Security, Medicare, paid vacations and 401K contributions.

So in addition to $130 413.22 vehicular operational costs we got additional $60 000 of a human driver cost on the top of it.
That's the total of $190 413.22 total business cost: which means that to run a truck with a hired driver for 1 mile it costs 2.08 c per mile.

Mind you, my equipment is paid for 100%, I don't have bank installments but have a higher repair and maintenance. On the other hand, we'd like to presume that new trucks don't break and the maintenance and repair costs are minimal, at the expense of high installment payments and insurance costs.
I'll try to do my best to guess: New truck payments (per year) : $40 000 + $5 000 additional insurance costs = $45 000 + minimal $2000 - mostly PMs, tires, lights, mudflaps - Mickey Mouse #### maintenance. $47 000 - $50 000 - that is still additional $20 000 - $25 000 vs what I have.

However,
with a new truck you write off depreciation, more usage expectancy, better driver retainment, less break downs stress and inconveniences, providing better reliable business for customers, etc - things difficult to quantify in $ amounts. Hence, never-ending debate new vs old/used/

 

Concluding my thoughts here:
It may be close to 2.30 - 2.50 as a profitability threshold for a new truck owner who hires a driver to run his truck or treats himself as a hired driver. That's when we say "You run it as a business".
If someone, like myself, runs solo with a paid for equipment, the threshold may be almost 1 dol less with the provision that my personal financial needs might be at any time offset by my digging into the business profits, which a common practice for solo o/o when rates are poor - survival mode, however, it may not work in the long run.

 

I do include it for taxes purposes (I use a certain % of my bills) but for practical purposes I don't include it here as a cost because I have a family plan and it is rather difficult to determine what portion of the bill should be determined as a cost. But yes...you may add additional $1500 - $2000 there for the sake of completeness.

BTW: It is rather unclear, unless your cell phone plan is dedicated to your business, how to quantify the cost of a cell phone. I heard a number of explanations out of which the most compelling one was that it should be very itemized. Meaning, every one minute should be accounted for and also the time spent on the Internet should be itemized too. That's hard to do, especially, if you commingle your cell phone with the personal usage - when your phone is a part of the family plan.

 

Your fuel cost is high, do you use any discount fuel card?

 

That must be it...My average weight was 20 000 lbs on my miles.