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What is the True Cost of Fixed Overhead in the Trucking Industry?

There is a great deal of trucking that goes on in the United States from year to year. The business of trucking is something that vehicle owners and the companies who hire them are concerned with on a regular basis. If a trucker wants to generate a profit, then he needs to keep a close eye on his fixed overhead, which would be the costs that he incurs on a regular basis. This number does not include emergency expenses, which is something that every trucker plan on experiencing at some point. It also does not include variable expenses such as fuel and food.

The United States Department Of Transportation estimates that truckers were responsible for hauling nearly 61 percent of all products shipped in the United States, Canada and Mexico in May 2013. With that much business being transacted on the roads, truckers need to keep a close eye on their fixed overhead expenses.

Insurance

Insurance is one of those expenses that can vary depending on the size of your vehicle and the areas where you work. But once the insurance fees are calculated, they are fixed for the year.

Permits, Fees, Certifications

Once again, permits can vary depending on the loads you haul, the kind of truck you drive and the areas where you work. In some cases, permits can vary from job to job. But, for the most part, truckers are able to calculate how much they will pay each year in permits and they will use that number as a fixed overhead cost.

Truck Lease

Some truck leases can go up if a trucker drives over the predetermined mileage on the lease. But there is always a monthly minimum payment that becomes a fixed cost associated with the ownership, or lease, of the vehicle. This is one of the fixed costs that many truckers work hard to eliminate over time. A trucker that has paid off his rig and has no more monthly fixed costs for ownership can make more profit each year.

Maintenance

A trucker is able to estimate the number of miles he runs in an average year and then determine how much he will spend in routine maintenance, as well as the cost for replacing things like tires and brakes. The more of a fixed cost that the trucker can make this, the easier it is to run his business.

Salary

Truckers always calculate their cost per mile and then compare that cost to the kind of income they want to make. In order to calculate the cost per mile, the trucker has to determine how much he wants to pay himself throughout the year. Of course, any amount over the fixed salary amount is considered to be a good year. But a trucker always has a target income in mind that becomes a fixed cost for the year.

A trucker will try to make every expense a fixed expense and then estimate his costs against those expenses. Some costs, such as fuel and tolls, can be hard to predict. But when a trucker sets out to make a run, he knows what he needs to do to make a profit and stay in business. The fixed overhead costs of trucking are just part of the business side of driving a big rig.