Becoming An O/o???

Somehow I believe the reason for the 3% profit margin is because of the heavy taxes the government puts on trucking.

Actually the narrow profit margin is because it's a commodity service - meaning the only thing that matters to the customer is price. There is very little you can do to convince someone that they should pay you $2.00 per mile to move their freight when someone else will do it for $1.50 per mile. It's like buying gasoline or an airline ticket - 99% of the time the only thing that matters is price. When you're in a commodity-type business like that it's nearly impossible to turn a worthwhile profit.

Somehow I believe the reason for the 3% profit margin is because of the heavy taxes the government puts on trucking.

Actually the narrow profit margin is because it's a commodity service - meaning the only thing that matters to the customer is price. There is very little you can do to convince someone that they should pay you $2.00 per mile to move their freight when someone else will do it for $1.50 per mile. It's like buying gasoline or an airline ticket - 99% of the time the only thing that matters is price. When you're in a commodity-type business like that it's nearly impossible to turn a worthwhile profit.

So then the competition must be for volume of goods moved?

Company driver to O/O:

"So, you own your tuck."

"No Sir. The truck owns me."

Company driver to O/O:

"So, you own your tuck."

"No Sir. The truck owns me."

I entered a contest where the GRAND PRIZE is a Class 8 truck. What do I do if I win?

Dave

So then the competition must be for volume of goods moved?

Essentially the goal for every trucking company is to find enough freight to keep their trucks moving, and hopefully at a profitable rate. So the trucking companies are bidding against each other on freight and generally the lowest bid wins the freight.

The prices will fluctuate wildly based on a huge assortment of factors, but mostly it depends upon the supply of freight versus the demand for freight in any given area at any given time. So for instance, if you have 100 trucks coming out of Denver on a given day and 200 loads available then the freight prices would be much higher than if you had 200 trucks competing for 100 loads.

That's of course an over-simplification, but that's essentially how it works.

I entered a contest where the GRAND PRIZE is a Class 8 truck. What do I do if I win?

Sell it immediately and you'll instantly become one of the most profitable truck owners in 2013!