Posts from the ‘Trucking’ Category

Load value

We have carried a wide variety of stuff from crushed milk jugs to food to TVs and now iPads. It is very strange how different loads are treated by the shippers.

There is a designation within our company called a “high value” load. The shipper pays extra and someone keeps a closer eye on us and we have to drive 200 miles before making any stops and we are not allowed to leave the truck alone.

Trailers are “sealed” in various ways, usually a plastic or metal loop with a number on it is slipped through a latch on the door. The seal has to be broken to open the door. This way they know no one has been in the trailer from shipper to consignee. Sometimes a hard bolt is used that requires bolt cutters to remove. Cables get wrapped around the latches too. The more stuff they use the more it seems to scream “valuable, steal me.”

In the past few days we have carried 1,100 bottles of premium liquor and $2 – $3 million worth of iPads. The liquor wouldn’t even have had a seal if I didn’t put one of our company ones on it and while the iPad load was designated high value it only had a metal ribbon seal. The load we had with the cable seal and a tracking device in the trailer, it was mouth wash.

I truly don’t understand this industry.

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Fuel

Fuel is the single biggest expense a driver has. Our fixed expense for truck payment, insurance, communications equipment, etc. is $890 a week and will drop to $740 in 16 weeks when a couple of things get paid off. At $3.00 a gallon filling our tank runs about $600 and we do that three times a week or more. Even a solo driver will do it at least twice. I have to tell you that when I am home and fill up the Tahoe and it costs $60 or less it just doesn’t bother me anymore, and filling the Mazda is nothing to me now.

Of course we try and fill as cheaply as possible and since fuel is tied to a trip we try and match the amount of fuel we purchase to the length of the trip. We do try and keep at least a quarter of a tank in the truck at all times and in the winter in the north at least a half. I am more rigid about the latter rule than the former. There has already been a short term closing of I-80 in Wyoming this year and you just don’t want to get stuck somewhere with nothing in the tank and a few hundred other truckers who have already drained all of the diesel from the local truck stops.

Deciding what fuel costs is different for us than for you though. You have probably noticed the IFTA stickers on most big trucks. This year it is blue and an outline of the state where it was purchased is on it along with the year it is valid. There is a 90 day grace after January one to get the stickers in place (one on each side of the truck) but it is actually illegal to put it on before January first. IFTA is the International Fuel Tax Agreement and is administered by The International Fuel Tax Association . It is an agreement between the lower 48 states and the provinces in Canada that border the US about sharing fuel tax revenue. You see we pay fuel taxes in every state we drive in whether or not we purchase fuel there. There is an person at corporate whose job it is to handle this. Using data from our Qualcomm system this person nows where we have been and matches that with data about our fuel purchases to decide what we owe to whom. Below is a table showing our activity for September.

State Miles Mileage
Tax Rate
Diesel Fuel
Consumed
Fuel Tax incl
Surcharge Tax
Gal Tax Paid State Rate/gal Gal Due Mpg Used Mileage
Tax Amount
Fuel
Tax Amount
AL 133 0.0000 20.2 0.0000 0.0 0.1900 20.2 6.59 0.00 3.84
AR 275 0.0000 41.7 0.0000 0.0 0.2250 41.7 6.59 0.00 9.38
AZ 2707 0.0000 410.8 0.0000 50.8 0.2600 360.0 6.59 0.00 93.60
CA 2072 0.0000 314.4 0.0000 570.5 0.3730 -256.1 6.59 0.00 -95.53
CO 70 0.0000 10.6 0.0000 0.0 0.2050 10.6 6.59 0.00 2.17
FL 715 0.0000 108.5 0.0000 174.2 0.3167 -65.7 6.59 0.00 -20.81
GA 76 0.0000 11.5 0.0000 0.0 0.1580 11.5 6.59 0.00 1.82
IA 300 0.0000 45.5 0.0000 0.0 0.2250 45.5 6.59 0.00 10.24
IL 307 0.0000 46.6 0.0000 0.0 0.3500 46.6 6.59 0.00 16.31
IN 166 0.0000 25.2 0.2700 189.2 0.1600 -164.0 6.59 0.00 -23.47
KY 233 0.0285 35.4 0.3170 58.0 0.2150 -22.6 6.59 6.64 -1.25
LA 446 0.0000 67.7 0.0000 0.0 0.2000 67.7 6.59 0.00 13.54
MD 24 0.0000 3.6 0.0000 0.0 0.2425 3.6 6.59 0.00 0.87
MO 624 0.0000 94.7 0.0000 0.0 0.1700 94.7 6.59 0.00 16.10
MS 291 0.0000 44.2 0.0000 0.0 0.1800 44.2 6.59 0.00 7.96
NE 457 0.0000 69.3 0.0000 105.2 0.2710 -35.9 6.59 0.00 -9.73
NJ 163 0.0000 24.7 0.0000 0.0 0.1750 24.7 6.59 0.00 4.32
NM 1847 0.0437 280.3 0.0000 214.4 0.2100 65.9 6.59 80.71 13.84
OH 261 0.0000 39.6 0.0000 0.0 0.2800 39.6 6.59 0.00 11.09
OK 629 0.0000 95.4 0.0000 201.0 0.1300 -105.6 6.59 0.00 -13.73
PA 335 0.0000 50.8 0.0000 0.0 0.3810 50.8 6.59 0.00 19.35
TN 1307 0.0000 198.3 0.0000 147.3 0.1700 51.0 6.59 0.00 8.67
TX 5873 0.0000 891.2 0.0000 1025.4 0.2000 -134.2 6.59 0.00 -26.84
UT 475 0.0000 72.1 0.0000 164.3 0.2450 -92.2 6.59 0.00 -22.59
VA 654 0.0000 99.2 0.2100 0.0 0.1750 99.2 6.59 0.00 20.83
WV 54 0.0000 8.2 0.0000 201.3 0.3220 -193.1 6.59 0.00 -62.18
WY 407 0.0000 61.8 0.0000 70.2 0.1400 -8.4 6.59 0.00 -1.18

Total 20901 3,171.5 3,171.8 -0.3 87.35 -23.38

For now ignore the mileage columns, I’ll get back to those later. The columns are pretty self explanatory and the bottom line is the last column which indicates if we have over or under paid. Negative being over paid. Naturally any state we didn’t purchase fuel in, zero in the Gal Tax Paid column, has a positive number. The idea is to try and balance the positive and negative numbers to get as close to zero or better even end up with a negative total meaning we are owed money. What all this means is that when I look at fuel prices I don’t just need to know the pump price but I want to know the amount of tax in a given state. eTrucker keeps a chart of taxes and average prices that helps sort this out. On 10/31/10 in Texas the tax was 20 cents a gallon and the price of fuel, including tax, was $2.97 a gallon. Next door in Oklahoma the tax is 13 cents and the price is $2.923. As a non-commercial driver you would want to purchase fuel in Oklahoma and save almost a nickel. However I look at the price before taxes and see that in Texas the pre-tax price is $2.77 vs. OK where it is $2.793. Two cents less Texas. Granted at the pump I pay the higher price but since I will be burning part of this fuel in another state I am storing up tax money to pay to a state I have not purchased fuel in. We look to purchase fuel in states with high taxes, low absolute costs and where we won’t be driving a lot to store up tax money. Obviously we also need to purchase fuel in any state where we are going to burn a lot, so most trips through Texas involve a purchase as do trips in CA where we plan on heading north out of Los Angeles. Another twist is that fuel at our terminals is usually significantly cheaper than at a truck stop so we try and purchase there when possible.

Additional issues. Several states have mileage charges as well, the other columns. We get hit for each mile we drive on the road. We try to avoid those states when possible. As a company driver when I drove from Texas to Oregon we spent a lot of time in New Mexico. Now I drive up US-287 out of Amarillo, through Oklahoma and then Colorado and Wyoming. The difference in miles is negligible and it saves $17.00 in mileage taxes. It is a balancing act between fuel burned and charges. Coming out of Los Angeles it is a couple of miles shorter to go across northern New Mexico but we spend over 100 extra miles in NM compared to the southern route which again means more taxes paid. However, coming out of central California the northern route makes sense as the southern route is 100 miles longer and burns a lot more fuel plus adds on miles we are not even paid to drive.

Oregon is the worst. They charge over 16 cents a mile but have no fuel tax for companies that have cut a deal with the state. Sixteen cents a mile is much more than we would pay by the gallon. Naturally we try and avoid driving there now. That is why I ended up on a snow covered pass on Washington last week because we wanted to drive in Washington, not Oregon.

Notice in the chart when it came to fuel taxes we actually ended up being owed money but when the mileage charges kicked in we lost out and had to pay $63.97 in additional taxes. This was a good month. Not understanding how things worked in Oregon in August we purchased a tank full of fuel because the price looked so good compared to California and Washington. Two problems, we drove a lot of miles in the state and didn’t accumulate any tax money. Our payment was over $150 last month. Even if we drive in Oregon we don’t want to purchase fuel there because it gets us nothing.

So you look at this and are probably going ‘Holy crap Batman, how do they earn anything after paying for fuel?” Our little friend the fuel surcharge. During one of the gas crises the trucking companies realized they couldn’t keep up with the rapid fluctuation in fuel costs and essentially agreed to price loads with a fixed amount for fuel costs per mile and add on a surcharge based on the Department of Energy calculated weekly price for fuel. There are lots of problems with this system not the least of which is it is backwards looking and applied, at least partially, in a forward manner. It also doesn’t account for wide variations in prices across the country. But it is better than nothing. So if on Tuesday DoE says fuel cost $3.06 a gallon we get paid an additional 28.6 cents per mile. Obviously this charge has been passed on the the customer, heck probably a higher charge has been passed to the customer. This is a flat rate per mile so if I am doing a good job of conserving fuel I make more money. Over the course of a year an increase in fuel economy of one MPG can equal thousands of dollars. It is weird but as fuel prices go up I can actually make more money.

Truly independent drivers can subscribe to services that will tell them just what the prices were along the route they traveled the days they traveled them in order to refine this surcharge. This cuts way down on over or under charging the customer.

I hope that was clear, the process still confuses me.

Big Changes

That going back to high-tech thing didn’t work out so well. Too much time as a manager and not enough as a developer.The one place I got close didn’t hire anyone one in the end.

So on to plan-B. As of last Friday I am officially an owner-operator (O/O). Most companies would actually call it a lease-operator as I am leasing the truck. In this case a short term lease of 10 months, or 45 weeks to be precise. Three weeks of no payments in order to build up some capital and the 45 WEEKLY payments that are about twice my monthly car payment. This truck is valued at nearly twice what my first house cost and it doesn’t have nearly the square footage. Obviously we won’t be even close to owning it at the end of the 45 weeks. This is a trial period to see if we can make the money we need. We will then have the option of about 143 more weeks of payments followed by a balloon payment that will knock your socks off.

So why do this? It gives us some more flexibility in our schedules. Liz will probably take every other month off to preserve her sanity and keep our house in order. The one thing driving is very good for is preventing you from buying things you don’t need and that means you can focus on paying bills down. If we manage the money properly we should also be able to save the money for that balloon payment and own the truck. Once you own the truck you got an instant massive raise which could be turned in to a second house payment each month and that would certainly pay the house off in a hurry. I know that I am really in to the wild daydreams at this point but if managed carefully, not something I am known for, this could really work out well.

In the mean time I am going to try and work on the Mac/iPhone programming thing to use as a plan-C but for the moment I am most definitely off the market.

More stuff I don’t get

As part of the process of picking up and delivering stuff we have a series of messages, or ‘macros,’ that we send in via the Qualcomm. Additionally when we are finished we send a signed copy of the Bill Of Lading (BOL) in to corporate that they use as part of the billing process. This is very structured. Macro one is sent when we get to the shipper. Macro two is sent when we are loaded (L-call). Macros three and four are for arriving and departing extra stops along the way. Macro five for arrival at the final destination. Finally, macro six is our empty or E-call. This all applies unless you are delivering to a forwarding agent at a border town. We just go to the agent, drop the load, send a free form message to our DM saying we did it and then do nothing with the BOL. We hang on to it just to cover our butts but no one asks to see it. I don’t get it. Seems to me that if you wanted to steal a load this is the perfect opportunity and gives you a big head start on getting away.

Unbelievable

We picked up a load today that at first seemed normal but that changed as we left the facility. We got read a list of rules that made it clear this was a high value load even though we had not been told anything in our preplan or dispatch. When I questioned our dispatch about it I got instructed to call in for a verbal dispatch. Now I got even more instructions including a number to call when we left the facility, oops that was 60 miles and 90 minutes ago, plus every time we stop and start. I called the number and they wanted my trip ID. Sorry, no clue what that is. In the end the truck number was OK.

The whole thing as aggravated by the fact that we are both low on hours and so can’t keep the truck rolling non-stop. Frankly I don’t think we should have been assigned this load but since no one looks at all the data we send about hours worked they had no idea we were getting low. We did tell them we only had 20 hours, instead of 22, we could work starting at eight this evening but that didn’t seem to phase them. Fortunately there is a company facility enroute were we are parked and can sit until tomorrow when our hours recover a little and there is enough wiggle room in the delivery time to support this.

However on Monday I am demanding to know how this happened because had we screwed up to a similar degree we would be in deep doodoo.

UPDATE: The person I talked to today at the trailer tracking company told me he has no record of us and there is no need to call. Oh brother.

Yuck!

Well another first. I hit a deer late last night. I have no idea what the remains look like but other than stomach contents and blood surprisingly little was on the truck. The bumper got badly damaged but the truck was certainly driveable. We made our delivery on time. I did everything right which really means not doing much at all. Obviously we don’t swerve a truck to avoid non-humans. I slowed down but kept the truck straight.

Next step is where to get repairs done.

Repetition

It is beginning to happen. Much sooner than I thought. We are going to the same places or areas. Tonight we picked up in North Bergen, NJ. This is the third time I have been here and the second to this shipper. We are going back to Illinois following the same route we just did getting here from Nebraska. We will probably spend the night in the same small truck stop we have twice before. We need more trips to new places. We have only been to Florida once, same with South Carolina. We have not been to New England other than western Massachusetts and there is a lot of the pacific northwest yet to see. If we have to do repeats at least let it be the Golden to Elkton run as it is beautiful and one of these days we will get the timing right so we can see Tamarack, WV.

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