The Annual Load Book was designed by a 3rd generation owner operator with serveral years as both a fleet owner and an owner operator. It has been my experience that you have to know what you are doing first to be able to stay on top of your program and not wake up one morning out of business. The Annual load Book is a tool that helps me stay on track.

You cannot fly by the seat of your pants anymore

When airplanes were a new idea, pilots were the cowboys of the air. Barnstormers would fly in and out the open doors of barns: they truly flew by the seat of their pants. They had a wicker seat, a control stick and a really great view... Life was grand! Over time, however, there were less and less of them. They were flying into the barns but not always coming out the other end. As the second generation of pilots emerged, they started developing tactics to stay aloft and remain alive so they could fly again tomorrow. These tactics often took the form of cockpit instruments that told them how well the equipment was running; fuel gauges, air speed indicators, oil pressure gauges, and engine temperature gauges. With the advent of each new gauge, the pilot's life expectancy was extended. Today, instrument rated pilots make entire trips without seeing anything but their instrument panel. Everything they need to know to fly that plane safely to their destination is right there on their gauges and navigational equipment. The trucking industry has it's own history of cowboys, and flying by the seat of their pants. However, as competition has increased it has become vital that independent drivers have a feel for how their operation is fairing at any given point in time. Where before just running might get you by and even make you a little money, today if you don't run smart, you can run yourself right out of business before you even know it. One of the easiest ways of taking the pulse of your company is to track and control the costs of doing business. This will require some bookkeeping but they are figures you are already tracking for the IRS. Why not make them work for you at the same time? Once you know what your costs are, you can start taking steps to control those costs and that has a direct effect on your bottom line. Cost for operating a truck fall under two general categories; fixed, and variable costs.

FIXED COSTS
Fixed costs expenses are costs you entail just having your truck parked out in your driveway. You have a daily exposure to them, rolling or not. There are some days of the year you may decide to make up later, like Christmas, Thanksgiving, and your birthday. What about days you sit idle waiting for a better paying load? You might be better off with a less productive load and not have to eat 2 or 3 days of fixed costs that just keep on adding up. In our example the annual fixed costs of $27,616 represent a $76 a day of fixed expenses. A load would have to pay out at $529 more to justify waiting a week for it. Once you know your fixed costs, then this is no longer a guessing game. You can decide how long you can afford to wait for a specific load based on the known cost of the wait. The biggest two items in this category are your mortgage on the truck and the variety of insurance coverages you need. Other items include your licenses, permits and accounting services.

VARIABLE COSTS
Variable costs are expenses that are directly related to operating the truck. Generally, the more you run the truck the higher these will go. There are some economies of scale, however, and cost per mile chartsome of these expenses will become less per mile as you increase your number of miles. Fuel, tires, maintenance, and meals and lodging are examples of variable costs.

PER MILE COSTS DECREASES WHEN MILES INCREASE
As the miles a truck operates increases, the Cost Per Mile figure will decrease. (See Figure 2) Of course your driver income should also increase as you drive those miles too. Let's just look at the first and last points on this chart. The $1.06 per mile cost, at 50,000 miles, represents a vehicle cost of $53,000 and a "Driver Income" of $22,174. The final $0.69 per mile cost for 130,000 miles, represents a vehicle cost of $89,000 and a "Driver Income " of $38,422. This decrease of cost per mile with each additional mile is a characteristic small business truckers share with the big fleets; greater equipment utilization translates into lower per mile costs and the potential for increased net revenues and profits. 

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