Today’s freight rates may seem like the end of the industry is near, but longtime truckers will tell you that market highs and lows have always been a part of trucking.
In this article, two of Landstar’s most seasoned Business Capacity Owners (BCOs) — Landstar’s term for independent owner-operators leased to Landstar — share advice on how to profit in any market. They are: Larry Long, retired BCO and former owner of Blue Ribbon Logistical Solutions and leader of the Blue Ribbon Masterclass Program, and Jay Hosty, owner of JayByrd Express and winner of Overdrive’s Trucker of the Year in 2023.
1. Know your cost per mile (CPM).
Hosty explains that it all comes down to knowing what it costs per mile to run with the truck payment, fuel, tire cost and insurance.
“You have to know your cost to know if you’re making money and if a load is paying well,” he said.
If you know your CPM, you know what you need to charge per mile to make a profit. In a tight market, knowing your CPM can open opportunities.
“You can take freight that you didn’t think you could take before because you know the CPM and you can see that the rate is sufficient for you to make a profit,” Long explained.
2. Focus on controlling costs, not revenue.
Long says it’s a common mistake for owner-operators to only go after loads that pay a high rate per mile (RPM). He says the problem is there’s just not enough high-paying freight around anymore.
Rather than trying to increase revenue by landing the big payouts, Long says owner-operators should concentrate on cutting costs to make lower-paying loads profitable.
Hosty adds that owner-operators should focus on daily revenue rather than holding out for high-grossing loads. Not only can you spend a lot of time waiting and not working between loads in this market, he says the big payouts don’t always pay as well as shorter ones when you look closely at RPM.
3. Control your fuel use.
Long and Hosty’s biggest advice for profiting in any market is to focus on costs you can control. Both agree that fuel is the biggest cost by far.
“You can control how much fuel you burn by your right foot and doing certain modifications to your truck to improve your fuel mileage,” Long said.
Hosty says he drives 60 MPH to maximize his mileage. “One MPG is a big deal in a semi-truck that averages six MPG.”
4. Minimize your fuel costs.
Another cost that’s within your control is what you pay for fuel. Make finding the best prices and maximizing discounts your priority. The LandstarOne app helps BCOs and third-party carriers do both by directing them to the best prices wherever they go — and for Landstar BCOs, the app will show the deep discounts from the Landstar Contractors’ Advantage Purchasing Program (LCAPP).
“The fuel discounts Landstar BCOs get are amazing,” Hosty said. “Sometimes it’s a dollar a gallon off of the pump price.”
5. Avoid an expensive truck payment.
Hosty and Long both advocate buying used trucks and not going into debt.
Hosty credits the absence of a monthly truck payment for most of his career with lowering his CPM and enabling him to operate profitably even when rates slump.
One of the biggest mistakes Long sees is drivers signing “walkaway leases” that enable them to get into fancy new trucks with no money down and the hope of ownership at the end of the lease period.
“They’re literally predatory leases,” Long said. “Everything they make goes to pay for the truck.”
6. Have a business mindset.
Staying profitable in any market depends on core business practices. You can take loads without considering CPM when rates are high, but if you do that in a freight recession there’s a good chance you’ll go bankrupt.
Rather than spending lavishly when the money’s flowing, Hosty says truck owners should consider forcing themselves to save. He uses Landstar’s escrow program to automatically deposit a percent of every linehaul, noting that i’s come in handy for taxes, unexpected repairs and buying trucks.
7. Diversify your income source.
The ability to work with multiple shippers and agents and adapt to varying types of hauls can help ensure steady work in any market. Landstar’s load board features a wide range of loads from independent Landstar freight agents. Fees and details are transparent to a degree no other load board can match. It’s an ideal marketplace to try specialties like flatbed hauling that can pay more. To help BCOs increase their profit potential, Landstar’s BCO advisors provide business mentorship and Landstar’s Field Operations Centers are available to provide local support.
A business focus doesn’t have to take the joy out of trucking. Smart business practices can help you continue to love driving in any market by protecting your profitability, your ability to pay your bills, and your peace of mind.
Linda Garner-Bunch has been with The Trucker since 2020, picking up the reins as managing editor in 2022. Linda has nearly 40 years of experience in the publishing industry, covering topics from the trucking and automotive industry to employment, real estate, home decor, crafts, cooking, weddings, high school sports — you name it, she’s written about it. She is also an experienced photographer, designer and copy editor who has a heartfelt love for the trucking industry, from the driver’s seat to the C-suite.
