The industry advertises gross revenue because it is the bigger number. Gross is not what you take home, and confusing the two is why so many first-year carriers are shocked in December.
Gross is not net
A carrier grossing $200,000 might keep $50,000 to $80,000. That is not pessimism, it is arithmetic. Here is where the rest goes.
What it costs to run, per year, solo
| Expense | Annual estimate |
|---|---|
| Fuel, your largest cost | $50,000 to $80,000 |
| Truck payment if financed | $20,000 to $40,000 |
| Insurance, liability plus cargo | $10,000 to $18,000 |
| Maintenance and repairs | $10,000 to $20,000 |
| Load board subscriptions | $500 to $2,000 |
| ELD device and subscription | $500 to $1,200 |
| Permits, licenses, IFTA, IRP | $2,000 to $5,000 |
| Factoring fees if used | 2 to 5% of gross |
| Dispatcher if used | 5 to 10% of gross |
| Self-employment tax | 15.3% of net profit |
| Health insurance | $5,000 to $15,000 |
Note the last four. Factoring, dispatch, self-employment tax, and health insurance are the ones new carriers forget entirely when they do the math in their head. Together they can be a quarter of your gross.
By equipment type
Dry van, 53-foot
- Gross: $150,000 to $220,000
- Operating expenses: $90,000 to $140,000
- Net before tax: $40,000 to $80,000
- Take-home after self-employment tax: $35,000 to $65,000
Reefer
- Gross: $180,000 to $280,000, since rates typically run 20 to 30 percent higher
- The reefer unit burns its own fuel and adds maintenance, so the gap narrows
- Net before tax: $55,000 to $100,000
Flatbed
- Gross: $160,000 to $240,000
- Higher-skill loads pay better per mile
- Net before tax: $50,000 to $90,000
Hotshot
- Gross: $80,000 to $150,000
- Lower startup cost, lower ceiling. See the hotshot guide.
- Net before tax: $30,000 to $60,000
Hauling vehicles is its own math entirely, quoted per unit rather than per mile. See car hauling. Comparing trailer types generally: dry van vs reefer vs flatbed.
The one number that decides it
Cost per mile = total monthly expenses ÷ monthly miles.
Calculate it. Write it on the dash. Never take a load under it. Without that number you are not negotiating rates, you are guessing and hoping the year adds up. It is also what makes rate negotiation possible, since you cannot hold a line you have not drawn.
Where the money actually gets made
- Kill deadhead. Empty miles burn fuel and earn nothing. Plan the backhaul before you deliver, not after.
- Build relationships, not load board habits. Direct broker relationships and repeat lanes can add real money per mile over spot. See building broker relationships.
- Stay ahead of maintenance. One breakdown is $5,000 to $15,000 plus days you are not earning. Deferred maintenance is a loan at a terrible rate.
- Get a trucking accountant. Per diem, depreciation, Section 179, and the rest are worth thousands and are easy to miss. See owner-operator tax deductions.
- Pay quarterly taxes. Set aside 25 to 30 percent as you go. Skipping quarterlies adds penalties to a bill you already owe.
Still deciding whether to start? Read startup costs first. Under-capitalization is the leading cause of first-year failure, and the second is not knowing your cost per mile. Both are arithmetic problems, not bad luck.