How to Make it as an Owner-Operator

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Making your way in one of the most heavily regulated industries on earth can make you wonder if it’s worth it sometimes. And the increasingly expensive equipment required to be on the road may be sapping your revenue more than ever.

But there are drivers making a good living as owner-operators. How do they do it? One common thread among successful O-Os is their tendency to be business-minded tinkerers. They’re usually trying different approaches for being more efficient and cutting costs. They’re often studying up on the latest technology or on some new way to get better fuel economy. They talk to other O-Os to see how they’re dealing with challenges like detention time, new HOS rules, or getting good loads.

Know What It Costs You to Operate

Survival depends on bringing in more income than you spend. So the foundation for managing your business well is knowing what it costs you per mile to operate, including all your expenses and your salary. On the Owner-Operator Independent Driver Association’s (OOIDA) website, you can find a spreadsheet that helps you calculate that number. Once you have numbers to work with, it’s easier to evaluate a load, track your profitability after you’ve hauled it and apply what you’ve learned next time a similar opportunity arises. Over time, having accumulated that kind of data allows you to make better business decisions.

Once you know what it costs you to operate, see if there are ways to reduce that number without making yourself miserable or driving your family crazy.

Understand the Regulations and Figure Out How to Do the Best Job Within Those Bounds

Before he drove a truck, Henry Albert drove stock cars. (He tells the story in this video.) He didn’t go to college, but raced stock cars in his early 20s and says that was his college. “The parallels between trucking and stock car racing are pretty interesting,” he says. “The people that made the racing rules usually didn’t even own a race track or a race car. Many of them had never raced a day in their life.”

These people changed the rules every year. So once a year, all the racers received the new regulations they had to follow. Albert says, “First, you decided if you wanted to keep racing with the new rules in place. If you did – it was the same rules for everyone – so you had to spend your time figuring out how you were going to make those rules work better than anyone else.”

There were always those who complained about the new rules, but other racers focused on how they could be the fastest within those boundaries. Pointing out the cleaner air we have thanks to unleaded gas, Albert says regulations have their place. “We all have to deal with the same rules. If you want to make it as an owner-operator, put your mind to work on how you can do the best job and still obey the law.”

A good place to start is to avoid the fines and delays that come from being a flashing beacon for FMCSA enforcement personnel. Click here to read How to Avoid Six Common CSA Violations

Become a Fuel Efficient Machine

Carlos Cruz, a struggling lease-operator, was ready to turn in his keys after a few months on the road. But as a last-ditch effort, he decided that on this final trip to the terminal, he’d follow all the advice about fuel efficiency he’d been hearing from trucking business gurus and see if it allowed him to recoup expenses and increase his take-home pay.
The experiment was a success, so much so that he decided to give his business another month. After 30 days his fuel mileage went from the 6.2 to 7.8 miles per gallon, a 1.6 mpg improvement that more than quadrupled his net revenue.

That was three years ago. Today Carlos continues his lease deal and can afford to live well on his income.

Details of his story are in Jim Park’s column on TruckingInfo.com, but the three habits he says make the biggest difference are:

  • Slowing down from 65 to 55 mph
  • Never idling
  • Becoming a “progressive shifting machine.”

More good info sources for boosting your fuel economy:

Worth It or Not? The Aerodynamics Debate

truck line drawing

They’re ugly. They don’t make enough difference in fuel economy to be worth it. They won’t hold up to road abuse. They don’t produce the savings I can get just by slowing down.

Drivers and fleets have plenty of reasons they’ve generally opted out of aerodynamic add-ons, and while it’s true they’re not smart for everybody, companies are getting better at making durable, effective drag reducers. If you’ve always written the things off, it might be time to re-investigate.

Henry Albert, a trucker since 1983 and a contributor to TeamRunSmart.com, drives a 2013 Cascadia Evolution and has been on a pretty well-publicized quest to achieve 10 mpg for over five years. In a recent interview, he says he’s achieved in excess of 10 mpg on many individual driving days. His truck is completely decked out, with side skirts, nose cone, a trailer tail and wheel covers.

“I have drivers tell me all the time, ‘side skirts don’t make that much difference,’ and they’re right – they only save between 2.5% and 3% in fuel cost. But they also say the same thing about the nose cone and the wheel covers and trailer tail, but cumulatively, when I put it all together, it adds up,” Albert says. The fuel savings of adding aerodynamic modifications to his truck covered his cost in six months.

On the other side of the debate are drivers who point to the weight of the add-ons and the fact that on certain routes, crosswinds in combination with accessories like trailer side skirts can actually create drag. In the comments section of this article, a driver who travels the I-80 corridor between Milwaukee and San Francisco, a route where he’s usually rolling through 25 mph crosswinds, installed side skirts. He reports no difference in fuel mileage and concludes, “There is only one way to good fuel mileage, and that is SLOW DOWN. I went from driving the 75 mph zones to driving 60 and have saved an average of 160 gallons per trip.”

But this driver begs to differ: “I don’t subscribe to the theory that slowing down increases profits!” In the comments section of an article on the trailer Kevin Rutherford developed for owner-operators, he explains that, “when you slow down, your are also reducing your per-hour revenue.” By way of example he says that a driver averaging 70 mph and earning $2 per mile grosses $140 per hour, while someone driving an average of 60 mph at that same pay rate makes $120. Since fuel only costs $11 per hour more to run at 70 mph, the 70 mph driver is $9 per hour more profitable. His philosophy: “Revenue first, then control costs.”

One way he controls his costs is by employing an undercarriage device and nose cone to diminish aerodynamic drag. He uses an Airman undercarriage add-on, which is designed to move with the tandems, unlike the skirts that are stationary. He says, “For every slider hole you move the skirts away from the tandems, your efficiency decreases. At a certain distance, the efficiency is actually worse than no skirts at all. The 5-6% fuel savings I’m getting from skirts is only achieved at the 40-foot California setting. Utilizing both the nose cone and Airman, I am achieving 7.2-7.4 mpg running @ 75 mph in 75 to 80 mph states, usually grossing 75-80,000 lbs and am hitting 11 mpg empty.”

An option for drivers who determine trailer side skirts aren’t right for their situation are tractor wheel covers. As Mario Bravo, marketing manager for Flow Below points out in this article, one advantage of making a modification to the tractor is that you get that fuel economy benefit even when the trailer is sitting in a customer’s yard, unlike trailer side skirts. “The higher a fleet’s trailer-to-tractor ratio, the more standing time, and no aerodynamic device saves anything when the vehicle is sitting still,” he says.

His company’s AeroKit consists of panels that close the gaps between a tandem’s drive wheels, and others that guide air as it leaves the tandem area. Circular covers block wheel indentations and reduce turbulence.
The advantage of being an owner-operator vs. a fleet manager in this situation is that owner-operators many times run dedicated loads and/or routes, according to comments in this article by Mitch Greenberg with SmartTruck Systems.

He points out that they also tend “to measure their fuel mileage more consistently and run the same equipment day in and day out. Any differences that stem from aerodynamic add-on devices will more effectively and directly present themselves, Greenberg says, due to the aforementioned variables being so controlled, which is often not the case for large fleets looking to implement aero devices.”

There’s no one right answer and every driver needs to test for himself what combination of equipment, accessories and driving skills will create the best results.

Three Ways to Get the Maximum Miles Out of Your Tires

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Can you get 400,000+ miles out of your tires?

In Three Top Ways to Preserve Tire Life in the March 2014 issue of Heavy Duty Trucking, Jim Park writes about a retired maintenance specialist who accomplished this feat regularly.

Ron Szapacs, former maintenance specialist for Air Products and Chemicals, admits the goal is too ambitious for some applications but says in long-haul situations and in the service of maintenance-focused owner-operators, tires can get close to the half-million miles mark before being retired. He says there are three keys to making that happen:

1. Identity the Proper Inflation Level and Keep it There

Consult your manufacturer Load & Inflation tables to help determine precisely where your pressure should be. And it is important to settle on a precise number. The practice of over-inflating just a tad to boost gas mileage and hedge against tire damage, according to the experts interviewed in Parks’ article, does neither.

In fact, most tires function best inflated only to the L&I minimums, which allows tires to maintain a larger area of contact with the road and reduces impact damage. Herman Miller, president of HJM Fleet Maintenance, says higher pressure may produce some “small increase in fuel economy, but I could never quantify it.”

And tires that are at higher pressure “are too hard to function the way they were designed to function – that is, having enough give in the casing to absorb impacts like pot holes and road debris, having the optimum footprint or contact patch.” he says.

2. Maintain Alignment, Balance and Keep an Eye Out for Other Mechanical Threats

The way your tires are wearing can tell you a lot about your truck’s overall condition, Park explains in Extend Tire Life: Learn How to Tell When Your Trucks are Killing Your Tires.

Suspension, steering, wheel mounting studs, bearings, alignment, balance, shock absorbers – problems in all these areas will show up in tire wear.

The American Trucking Association’s “Radial Tire Wear Conditions and Causes: A Guide to Wear Pattern Analysis” offers detailed categories to identify wear and track back to possible causes.

One of the most common culprits is running a truck out of alignment, a problem that can cost up to a third or more of a tire’s life expectancy, according to Mike McCoy, national accounts sales manager at Beeline. “If you’re seeing irregular wear, don’t wait until the tires are destroyed. A $200 alignment could repay itself several times over in reduced steer and drive tire wear.”

Balancing is also as “maintenance tough sell,” according to Park, especially since with new tires it’s rarely a problem anymore. “But what about hubs and brake drums that might be out of balance, or worn hub pilots that could cause an out-of-round condition with wheel or tire?” he asks. Plus, a new tire that starts out balanced can be knocked out of balance in as little as a month.

He recommends dynamic balancing compounds or balancing rings to help maintain balance, even where wear is already irregular.

3. Retread

Important as proper inflation and maintenance are for extending the life of your tires, nothing beats retreading to maximize your tire investment. According to Modern Tire Dealer magazine, a retread is about $140 less than the average price of a new replacement tire.

And, Park points out, “when you factor in as many as two retreads on a single casing, you’re tripling the value of that casing – but effectively getting three times the mileage from it.”

Bill Sweatman, president and CEO of Marangoni Tread North America says that using modern retread technologies from initial to final inspection is key. He says it’s important to commit to using a system that “makes the retread decisions or you and your tires based on optimizing total cost of ownership.” Do those two things and he says post-retread performance can actually be superior to original new tire life.

Driving Skills for a Smaller Fuel Bill

iStock_000008984856XSmallCarlos Cruz, a struggling lease-operator, was ready to turn in his keys after a few months on the road. But as a last-ditch effort, he decided that on this final trip to the terminal, he’d follow all the advice about fuel efficiency he’d been hearing from trucking business gurus and see if it allowed him to recoup expenses and increase his take-home pay.

The experiment was a success, so much so that he decided to give his business another month. After 30 days his fuel mileage went from the 6.2 to 7.8 miles per gallon, a 1.6 mpg improvement that more than quadrupled his net revenue.

That was three years ago. Today Carlos continues his lease deal and can afford to live well on his income.

Details of his story are in Jim Park’s column on TruckingInfo.com, but the three habits he says make the biggest difference are:

  • Slowing down from 65 to 55 mph
  • Never idling
  • Becoming a “progressive shifting machine.”

He also says he’s forgotten where the cruise control switch is, although other fuel efficiency experts say cruise control has its place.

For example, Detroit Diesel application engineer Chuck Blake points out in this article that cruise control gives drivers a break from active driving and may be a tad more efficient on flat roads. “A really good driver can always out-perform cruise control,” he says, “but it’s tough and it’s tiring because you’re always working.”

On the other hand, the electronic control module (ECM) is not as good at telling the difference between a hill and a headwind, Blake says. All it knows is that some external force is slowing the truck down, and it’s going to feed as much fuel to the engine as it needs to maintain the set roadspeed.

A fuel-efficient driver lightens up on the gas pedal when full power isn’t needed, like when cresting a hill. “He can see the top of the hill, and backs off the throttle as he goes over the top”, Blake says. “Sure, he gives up a few miles per hour, but the fuel savings is phenomenal.”

Running full throttle to the top of a hill means wasted fuel when you’ll only need to apply the brakes as you descend the other side. “Kick it out of cruise as you near the top, and let gravity help you,” he says. “You’ll make up the lost road speed quickly enough on the way down.”

On Land Line magazine’s website, an article on lead foot rehab says fuel efficiency starts with a visit to a reputable shop where they can check the ECM for valuable stats that help you most effectively modify your driving technique. Look for data about engine RPM, time in gear, idle time, percent fuel use, fuel used idling, load factors, PTO time, PTO fuel used, speed vs. rpm, and engine load vs. rpm. The stats may also point to programming tweaks that will help reduce fuel consumption.

Overdrive.com’s 67 Fuel Tips to Boost Fuel Economy recommends more good driving habits:

  • Avoid revving the engine between shifts. Ease into each new gear, and don’t be in a hurry to climb through them.
  • Adjust shifting patterns. Download engine data to compare your shifting behaviors – RPMs at shift point – to the optimal RPM “torque bands” for your engine. Adjusting your shifting to fit the make and model of engine can make a big difference. Every 1,000-RPM reduction in engine speed delivers a 1 percent gain in fuel economy.
  • Run in your engine’s “sweet spot.” Once you reach cruising speed, operating in the peak torque zone gives you optimum horsepower, so the engine runs most efficiently. It takes only about 200 horsepower to maintain 65 mph.
  • Lower your average highway speed. Every MPH over 55 equals a 0.1-MPG drop in fuel economy.
  • Anticipate traffic signals. If you can approach slowly and avoid a complete stop, it saves fuel and reduces equipment wear.
  • Minimize AC use. Running the air conditioner delivers a 2⁄10 to 4⁄10-MPG hit. (However, some efficiency experts say that, over 55 MPH, the drag created by open windows hurts mileage more than the AC.)
  • Use truckstops atop hills. Driving uphill toward the truckstop allows natural deceleration, and going downhill to re-enter the highway requires less fuel.

Besides driving habits, dozens of other factors impact mileage. Overdrive’s 67 tips article will give you many more ideas. Also see Caterpillar’s Tractor-Trailer Performance Guide for an even more thorough guide to troubleshooting aerodynamic issues, route selection, tires, gearing, transmission, engine cooling requirements and more.

Should You Haul That Load?

tough-decisions-aheadGetting the Hang of Profitable Load Selection

Should you haul that load?

As with most things in the trucking business, the answer is, “it depends.” Determining whether to pick up a load or wait for the next opportunity is a puzzle that has more than a few moving parts.

It’s easy to get distracted by what seems to be a high-paying run, but there are other important factors to consider. In an article on Overdrive.com, trucking columnist and radio host Kevin Rutherford points out a few of them.

First, Think In Round-Trip Terms

How easy will it be to find a load out of your destination? If there aren’t many loads available, you may be marooned for a night, so you’re running up your costs without bringing in any revenue. And where supply of loads is low, demand to run them is usually high, often driving down driver rates. You may need to figure dead head miles in to your calculation.

Figure Freight Cycles Into Your Calculations

David Wolff, a consultant at financial services firm ATBS, says in the same Overdrive article that time, miles and rates all have to be considered when determining if a load is a good one for you to pick up. Also, Wolff recommends paying attention to freight cycles. Knowing that things are going to be slower in January after the Christmas rush, you can plan time off and take advantage of December loads that dispatchers are desperate to have hauled.

Consider Fuel Cost Per Lane

Fuel costs per lane are another piece of the puzzle, according to Wolff. Hauling from LA to Denver, you’ll pay West coast fuel prices – plus you’ll need more fuel to cross the Rockies than you’d need to travel the same distance along a flat lane in the Midwest.

A heavier load will burn more fuel per mile, so that lighter load that pays less could be the better proposition in terms of fuel cost – and in terms of reduced wear and tear on your truck. Rutherford offers a handy rule of thumb: Reducing weight by 10,000 pounds increases fuel mileage by 4 percent.

Know Your Cost per Mile

To make your calculations meaningful, you need to know what it costs you per mile to operate, including all your expenses and your salary. On the Owner-Operator Independent Driver Association’s (OOIDA) website, you can find a spreadsheet that helps you calculate your number. Once you have numbers to work with, it’s easier to evaluate a load, track your profitability after you’ve hauled it and apply what you’ve learned next time a similar opportunity arises.

Sources:

Choosing the Most Profitable Loads by Max Kvidera. Overdrive.com

Figuring Cost Per Mile by Owner-Operator Independent Drivers Association. www.ooida.com/educationtools/tools/costpermile.asp