Over the Road October 2022

MAKING YOUR MILES COUNT

Robert D. Scheper

Making Your Miles Count PODCAST

Beginning in January 2023 and in association with Over the Road Magazine, Making Your Miles Count will be producing a PODCAST to serve Canadian Truck Drivers and Operators. I have been researching topics and formats for over two years and I’m excited to provide a wide range of detailed topics. What I am offering readers is the opportunity to participate in topic development. If you have input or questions regarding anything on our list of 20+ topics, please feel free to contact me through our website. If you have a story, issue, or concern, we may just read it on the Podcast or even contact you for an interview if we believe the story is worth telling in audio/video format. Below are two of the topics on the list.

3. MAKING YOUR MILES COUNT: CHOOSING A TRUCKING COMPANY

The second book in the Making Your Miles Count series was published in 2015. Nearly a third of the book deals with every aspect of fuel costs. One of the first steps in controlling net fuel costs is a clear understanding of Fuel Taxes. Too many operators misunderstand the importance of knowing the impact of fuel taxes. The bottom line is that fuel taxes must be completely removed from the calculations of controllable fuel cost issues. In other words, remove the fuel tax from the pump price to compare the BASE PRICE of fuel you are considering purchasing. If you owned a truck that miraculously consumed zero diesel fuel (a wonderful concept) it would make zero difference on your net fuel tax cost. For some people, playing the fuel tax ‘game’ is very important. However, it is an exercise in futility… it moves cash/liability from one pocket to another but makes no difference to your wealth building. The activity is a complete waste of time. There are many issues surrounding net fuel costs. The first is fuel consumption, then fuel cost issues. Consumption has a greater impact than costs. Typically, carriers make better

fuel purchases while operators have better fuel consumption averages. Operators enjoy the freedom of fueling where they desire, which is usually not the most economical. Understanding where fuel is cheapest is not a static science; prices fluctuate seasonally, cyclically, and randomly across the North American markets. It’s a management issue that each Operator must understand and embrace.

Comparing carrier contracts is a science that few Operators have used. The method of choosing a carrier is almost always on the word or observation of a friend. I remember one client who spent four months preparing to leave a carrier on the testimony of a friend. Then after finally making the change, he met his friend at a truck stop only to find out they were no longer at the company he just moved to. He obviously trusted the guy’s word too much and/ or he didn’t keep in touch with him. Another client moved to a carrier because he saw an acquaintance purchase a new truck, an SUV and boat. He assumed that the money must be awesome, not considering the probability that their acquaintance was demonstrating a flare for excessive debt.

Charting and comparing carrier contracts are only a part of the research an operator must do to make a sound choice in truck placement. Halfway through my research, I realized that providing a written contract does not mean the carrier will honor it. In fact, from a legal point of view, most contracts are designed to expose and clarify the liability of the Operator and not nearly so much the obligations and responsibilities of the carrier (if at all). After reading hundreds of contracts my estimation is that the average carrier contract focuses 80% on Operator liabilities and obligations and only 20% on carrier responsibilities. With little to no clear obligations and responsibilities, a carrier can ‘legally’ get away with an awful lot of wing

10 • OVER THE ROAD OCTOBER 2022

clipping. I charted 13 different carriers over a 16-year span in my research. It clearly displayed the highest paying contract with the lowest and all the contracts between them. What the charts DON’T show is the relative corresponding turnover of those contracts. When Operators view the chart, they immediately ask who the highest paying carrier is, thinking that financial remuneration is the primary or only criteria for an educated choice. Then I ask the operator what he thinks the annual turnover is at the highest paying carrier? The assumption is that it is low, but it is more than 80%. I then point out a contract slightly above mid-way through the range and that carrier has an annual turnover of 8-12%. The highest paying carrier is not always the best carrier for two reasons. They may not honor their contract, or the work required is too hard/difficult for the Operator to sustain. Operators usually choose to leave a carrier for reasons unrelated to pay.

The book also deals with many related issues beyond lease operators. It touches on being an Owner Operator (running percentage). The difference between a Lease Operator and Owner Operator is much larger than the gap between a Company Driver and a Lease Operator. To be a successful Owner Operator (running percentage) requires a deep understanding of freight rates, lanes, cycles, and carrier customers. It is easier to move from a percentage operator to owning your own running rights (becoming your own carrier) than a Lease Operator to an Owner Operator. The amount of critical information for success jumps exponentially.

There are several fundamental lessons derived from the 16-year study comparisons. The research answers questions such as: do operators make more money after deregulation became entrenched or before? Do operators make more money than company drivers? If so, how, and where do they make it?

4. BUILDING WEALTH AS A DRIVER OR OPERATOR

When Drivers or Operators search me out for financial advice, too often they are looking for some ‘trick’ or ‘loophole’ to gain a financial edge. The ability to generate income from

operating a highway tractor is only one part of a person’s life. It may be an important part but certainly not to be considered the only focal point. In fact, if a person wishes to gain and retain after tax wealth, they almost certainly need to first focus on becoming wise and retain an understanding of their craft. Discipline, structure, and prudence are keys to building long-term after-tax wealth.

There are many life mentors available online. In fact, when I began researching for these PODCASTS, I found HUNDREDS of life mentors and ‘experts’. Admittedly, I have found some very helpful in the development of these PODCASTS. I am not interested in selling you books, programs, or courses that “help” you become wealthy. I’m not in this to make a buck. I have no sponsors other than the ‘Making Your Miles Count’ accounting firm. It is this accounting firm that allows me to help the industry with some critical issues. If I can help operators become more successful or save some operators from their false fantasies, I would count my efforts a success.

Over thirty years ago I designed my dream job; if I could have a business that provided me enough income so I could study, teach and help people without worrying about money, that would be my dream job. As near as I can tell, I have seen that dream come to life in my book series, articles in Over the Road Magazine and now with these PODCASTS. I cannot help people with everything, but I can provide a proven plan to build enough wealth to retire with dignity and maybe even enough to change your world significantly. You don’t need a Ph.D. or even an MBA to do this.

25 years ago, I was talking to an office administer at a carrier who told me a story of a driver they had hired several years prior. This driver was not typical; he was not a particularly bright man. He was a loner and probably should have taken one or two more showers a week than he was used to. He was assigned a scheduled run that put him on the road about five and a half days a week. After two years he was called into the office. He was nervous and shy, and the payroll lady was a little sheepish, but she asked him if he had been depositing

OCTOBER 2022JOBS FOR TRUCKERS • 11