If your business has elected S Corporation status with the IRS, you have differentiated yourself from your company by making the company a separate entity, or corporation. Therefore, when you (the owner/shareholder) perform services for your business as an employee, the IRS requires you to take reasonable compensation in the form of a wage that will show up on a Form W-2 at year-end. Then, as an S Corp shareholder, you are required to pay Social Security and Medicare taxes on your W-2 salary. However, the benefit of an S Corp is the amount of net income that is produced over and above the amount of the salary paid does not have the Social Security or Medicare tax applied thus saving tax dollars. The IRS wants you to pay yourself a salary that you’d pay someone else to do your job for you. When determining what salary is adequate you must take into consideration the various items that determine fair and reasonable pay. Title of the position, duties of the position, time spent on the job, experience in the position, among other things. It can be up for interpretation, so check with your CPA and other financial advisers to make the best decision. The biggest risk you can take as an S Corp owner-employee is to take no salary at all. It is relatively simple for the IRS to develop a report of 1120S returns with no owner’s compensation and net profits or distributions, which means it’s hard to hide from the IRS if you aren’t paying yourself a salary. This is a red flag for the IRS and creates an easy court case for the IRS to win if you happen to get audited. In the case of an audit, the IRS will have an easy time having the courts side with them when no or too little compensation has been paid. After they win the case, the IRS will likely choose a salary for you that is more than you would have allocated for yourself, thus requiring more Social Security and Medicare taxes to be paid, not to mention steep penalties and interest which will make it extremely difficult to stay in business. Therefore it’s best for you to decide your own salary, pay yourself that salary and lessen the chance that the IRS will step in and decide it for you. In closing, you can’t have the best of both worlds. You can’t minimize tax by becoming an S-corp and also not pay yourself wages through a W-2. By doing this you are completely avoiding Social Security and Medicare tax which is a slam dunk case for the IRS to win. Questions? Give us a call at 866-920-2827 or send us an email at info@atbs.com.

Hiring an employee, even a team of employees, is exciting for your business. As an employer, it’s important to be aware of your new responsibilities. In this article, we identify the key steps when hiring a new employee, setting up payroll and the necessary tax withholdings. Step 1: Forms. On the first day of employment, you will want the employee to complete form W-4. This form helps the employer determine the accurate federal income tax to withhold from their paycheck. Be sure to indicate whether you are hiring an employee or an independent contractor. This status clarifies how you withhold earnings and pay employee taxes. If you hire an employee, taxes are withheld from their paycheck. The employer provides a W-2 each January to its employees. On the other hand, if you hire independent contactors, you do not withhold tax from their earnings. The contractor is responsible for calculating and paying their own tax. Step 2: Payroll Process. There are decisions to make when it comes to payroll operations. The first thing to consider is how often you will provide a paycheck. Second, you need to determine how much you will pay in terms of employee wages. Finally, you will need to work through the taxes to withhold for W-2 employees. This process requires that you set-up an Employer Identification Number [EIN] with the IRS. Click here to learn more about the EIN. Payroll is an extremely important process and a big responsibility so you will want to find a process that makes sense for you whether it’s in-house, off-the-shelf software, or a payroll service. If you choose to manage payroll, this will require your time and a detail-oriented mentality. If you don’t have much time, you might consider outsourcing the process to a payroll company. At ATBS, we offer high quality payroll services at a competitive price. We partner with the nation’s largest payroll company giving our clients peace of mind that their payroll service will be impeccable and all filing deadlines will be met. With so many clients using our payroll services, ATBS can provide payroll services at a tremendous discount. Step 3: Payroll Taxes. When hiring a W-2 employee, you must remember the federal, state and other local laws surrounding payroll tax. As the hiring entity, you will be responsible for this. A Payroll Service can walk you through this part of the equation and ensure you are compliant. In addition to taxes, you will need to withhold a portion of the paycheck in order to cover income tax, social security, unemployment taxes and Medicare. For information on each withholding, you can speak to your ATBS business consultant. Step 4: Reporting. The earnings and withholdings need to be reported and you will want to be sure and report the following: 1. Quarterly Payroll Tax Return [Form 941] 2. Form W-2 provided to your employee[s] 3. Federal Tax Deposits 4. Form 940 or 940EZ, the annual Federal Unemployment [FUTA] Tax Return 5. Form 945, Annual Withheld Federal Income Tax Step 5: Maintaining Records. Proper record keeping is fairly straightforward and you will want to retain the W-4s and W-2s for three years on all current employees and any employee who has left. All tax filings and records of tax deposits should be stored in a safe manner and accessible by the employer for a minimum of four years. When you partner with a Payroll Service company, you can ask about record keeping as part of the service. At ATBS we partner with small business owners at every stage of their business growth, from sole proprietor to small business owner. Payroll is a natural element of business growth and can play a key role in providing your clients with the best product or service possible. Source: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Payroll-Professionals-Tax-Center-Information-for-Payroll-Professionals-and-Their-Clients

If you’re considering making the jump from being a company driver to an owner-operator truck driver there are several things that you can do to help become more successful. Start by creating a business plan. Before you decide to go out and purchase or lease a truck, take the time to put your personal finances and financial goals down on paper. Understanding and knowing where you are financially is extremely important. Next, you need to operate from the mindset of a business owner. This is your truck, this is your business, and responsibility now falls on you. Last but not least your driving habits need to be fine-tuned. The little things matter more now and every detail has the potential to affect your bottom line. Changing from A Company Driver to An Owner-Operator Truck Driver Create a business plan Creating a business plan is one of the most important steps you will take as a successful owner-operator. The plan you create serves as a financial road map that allows you to track your income and expenses over time. When you know your operating cost per mile, you are able to calculate how many miles you need to drive each week to cover your expenses in order to break even. This is known as your breakeven point, the point where your business expenses along with your personal expenses are covered and every mile driven over that point puts money in your pocket. Change your mindset Too many drivers try to make the transition from being a company driver to an owner-operator and fail to run their truck like a business. These drivers are caught in the “company driver mindset.” They think they are just a truck driver and as long as they drive the miles everything will be alright. Operating from the mindset of a business owner means recognizing the challenges you may encounter and having a plan in place to handle them. Saving receipts and tracking every expense, sending in quarterly estimated tax payments, and planning ahead for potential events such as weather, breakdowns, and tires are just some of the obstacles you may need to plan for. Someone can be business minded with excellent intentions, but without a plan of how to execute your intentions, you are setting yourself up to fail. Create good habits Don’t judge the performance of your business by the size of your settlement check. There are always ways to improve your business’s performance. Changing some habits might put more money in your pocket while running the same amount of miles. Try sacrificing a few MPH for RPMs. In other words, slow down and ease off the fuel pedal to maximize your fuel efficiency. You now pay for fuel, and slowing down just might put some cash back in your pocket. Driving slower also means less wear and tear on your tractor. Take the time to do a really good pre-trip and post trip evaluation of your tractor trailer. The sooner you notice a problem that can be fixed, you can prevent a bigger breakdown later on. This will help to minimize down time, and avoid more extensive maintenance expenses. If you check things thoroughly and regularly, you can schedule repairs during home time and save your drive hours to be on the road and not waiting in the shop. Change happens slowly but surely The transition from company driver to owner-operator is not something that happens overnight. As an owner-operator your primary goal is to make more money. With a business plan in place you can make educated business decisions based on numbers. You’re going to have a lot more expenses and accounting for them will only help plan for the difficult times. Knowing your expenses, being business minded, and practicing good daily driving habits will allow you to create a solid foundation on which to build your business as a successful owner-operator.

This article was originally featured on TeamRunSmart.com. Friday, October 30th was supposed to be judgment day, but it came and passed with no word. On October 30th the Final Rule to mandate the installation and use of electronic logging devices by truck drivers, championed by the Federal Motor Carrier Safety Administration, was supposed to be published. Instead the rule got hung up at the White House’s Office of Management and Budget. On November 17th the rule was cleared, and on December 11th the mandate was officially published in the Federal Register. Why is this ruling so important? Over 3.1 million vehicles across the country will need to be equipped with electronic logging devices to electronically log Hours of Service (HOS) by December 16, 2017. In 2012 the law, Moving Ahead for Progress in the 21st Century Act (MAP-21), was put into effect to help the Federal Motor Carrier Safety Administration (FMCSA) reduce crashes, injuries, and fatalities involving large trucks and buses. Along with multiple enhanced safety standards, the law included a provision calling the FMCSA to develop a new rule requiring commercial motor vehicles to use electronic logging devices (ELD) to record HOS. On October 30th the FMCSA was supposed to announce the final rule about the new mandate. While fleet owners and drivers are still awaiting the final decision, you can still do some prep work to prepare for the new mandate. Changing from paper log books to an electronic logging system will take some time. The new mandate doesn’t affect everyone, but will most likely affect the trucking industry. According to the mandate as it is currently written, all commercial motor vehicles that weigh over 10,000 lbs. and/or vehicles transporting hazardous materials requiring placards are required to utilize an ELD. Compliance requires fleets to equip their vehicles with ELD and keep record of HOS logs for up to 6 months. Fleet owners and owner-operators have multiple options in ELD solutions making the new ruling easy to manage. Fleets that utilize integrated ELD solutions can monitor and keep electronic logs to ensure HOS compliance and give managers and drivers the ability to proof upon DOT inspections . ELD software can also help fleets and drivers reduce HOS violations and improve Compliance, Safety, Accountability (CSA) scores . While it will take some money and work to install an ELD into all commercial vehicles, there are many benefits with ELD Mandate: Receive real-time data: ELDs can send management electronic logs in real-time from anywhere in the country to ensure HOS compliance. Save money with insurance discounts: Insurance rates might go down by providing proof that a fleet or driver is HOS compliant. Reduce administration costs: Paying office staff or another company to manually audit paper logbooks is expensive. ELD systems can save money by reducing staff time and material resources spent on paper records. Improve dispatch processes: Dispatchers and managers can stay informed on drivers’ current HOS availability to better plan routes and logistics to ensure drivers don’t exceed their HOS threshold. Increase driver safety: ELD systems can help prevent tired drivers from getting behind the wheel and reduce accidents, injuries, and fatalities. Improve roadside inspections: Paper logbooks are a pain during roadside inspections, but ELD systems can help drivers quickly and accurately provide DOT or law enforcement officers with current HOS logs. Many fleets and owner-operators will be affected by the final ruling on the ELD mandate so keep your eye out for the final ruling over the following months. While it may seem like a lot of work and money to purchase these devices and switch to a new system, ELDs can help you reduce costs, reduce risks, and increase your overall revenue.

If you are thinking about becoming a lease-purchase owner-operator, there are a few things to consider before signing an agreement. Leasing a truck is a big commitment and you want to make sure you are entering into something that will work for the long term. In order to help make this decision a little easier, check out these things we suggest you know before signing a lease-purchase trucking agreement. Know what your monthly truck payments are going to be Leasing a truck through a carrier means you will commit to making monthly payments to the carrier in order to drive the truck. Carriers should clearly state how much the monthly payment is going to be and when you have to start making payments. If a carrier is not clearly stating the amount of the monthly payments, you should not sign an agreement with that carrier. Some carriers also offer different truck payment options depending on the truck model and age. Knowing how much you can afford each month is something you must understand before signing a lease purchase trucking agreement. It can also be one of the more important factors to determine which lease is right for you. Know how long the term is Another important thing to know about the lease-purchase trucking agreement is how long the term of the lease is. It is common for carriers to have lease terms between one and three years. After the term is up, you may have the option to start up another lease agreement with the carrier, or walk away. Some carriers may also provide the option to purchase the truck after the lease term is up with the monthly payments you have been making applied to the purchase price. A lease-purchase agreement is a contract between you and the carrier or the carrier finance subsidiary. Most carriers will not allow you to simply walk away from a lease-purchase agreement whenever you want. That means it may be difficult or costly to get out of an agreement before the term is up. This makes knowing the term of the lease agreement even more important. Know what costs will be covered by the company As a company driver, you are an employee of the carrier you pull for. This means they will cover the costs that come with driving a truck. As a lease-purchase owner-operator, you are the boss of your own trucking company. This means you will be responsible for the majority of the costs. However, some carriers will offer to cover a few of the costs in order to incentivize you to sign a lease-purchase trucking agreement with them. One of the more common cost coverages you will see is a truck warranty. This coverage can save you from catastrophic maintenance costs so it's important to understand what is covered. Some of the other costs that may be covered by your carrier are license and permit fees, Federal Highway Use Tax (FHUT), Qualcomm fees, trailer fees, and cargo insurance fees. There are many costs associated with being an owner-operator, so any costs that are covered by the carrier are helpful. Know what kind of truck you will be leasing The variety of trucks you have to choose from differs from carrier to carrier. Some will offer new trucks while others will offer three to four year old trucks. Many carriers offer only one brand and model of a truck while others offer two or three. Aside from spending most of your time in the truck, knowing what kind of truck you will be leasing is important for two reasons. If you are leasing a truck that is older, the cost of maintenance will typically be higher. The other reason is if your goal at the end of the lease is to purchase the truck, you won’t want to purchase an older truck that will cost more to maintain and upgrade. These are just two of the more important reasons for why you should know what kind of truck you will be leasing. Ready to sign a lease-purchase trucking agreement? Hopefully, you find this information valuable when deciding which carrier you want to lease a truck with. These are all things that are very important for you to know before signing any contract or agreement. If you have any questions or concerns about signing a lease-purchase trucking agreement, feel free to give us a call at (888) 640-4829.

For any business, the formula for increasing profits is pretty simple - you’ve got to maximize your revenue and minimize your costs. And while it’s important to maximize your revenue, managing costs can have an even bigger impact on your profitability, here’s why. ATBS’ data shows that the average owner-operator has a profit margin of 44%. That means if you generate $1.00 in revenue, only $0.44 goes into your pocket as profit. However, if you reduce your costs by $1.00, one hundred percent of that $1.00 goes into your pocket as profit. That’s why managing costs is so important. On the cost side, there are two kinds of costs: Fixed Costs (FC), and Variable Costs (VC). The easiest way to think about these costs for owner-operators is to remember that fixed costs are the expenses you pay regardless of whether your truck is moving or parked i.e. truck payments, insurance, FHUT, etc. And variable costs are the expenses that you only have to pay when your truck moves i.e. maintenance, fuel, etc. The single biggest expense for owner-operators is fuel, and how you choose to manage fuel can have a major impact on your profitability and your quality of life. To understand the impact of fuel, we begin with some of ATBS’ exclusive industry data. In 2021, the average owner-operator worked 240 days, drove 95,763 miles, and made $0.74/mile in profit. In addition, the average VC (not including fuel) was $0.15/mile, and the current average cost of diesel fuel is $4.85/gallon. Using these numbers, if your truck averaged 6.5 mpg, you would spend $71,454 on fuel for the year. Here’s how the math works: (95,763 mi ÷ 6.5 mpg) x $4.85/gal = $71,454. Likewise, if your truck averaged 7.5 mpg, you would spend $61,927 on fuel for the year. So the difference between 6.5 mpg and 7.5 mpg is equal to $9,527 ($71,454 - $61,927 = $9,527). And as we know, when you reduce costs, 100% of those cost savings go straight into your pocket as profit. The math gets more complicated, but here are a few different ways to think about all of this: *Improving your fuel economy from 6.5 mpg to 7.5 mpg improves your profit for the year by $9,527! *At 95,763 mi per year, $9,527 in profit is equivalent to a 10 cents per mile pay increase! *If you operate your truck at 7.5 mpg instead of 6.5 mpg, you can run 15,395 fewer miles per year and still make the exact same profit! *If you operate your truck at 7.5 mpg instead of 6.5 mpg, you can work 39 fewer days per year and still make the exact same profit! As you can see, managing your fuel economy and fuel costs can have a significant impact on both your profitability and your quality of life. We used 6.5 mpg and 7.5 mpg simply as examples. Regardless of where your current mpg is at, the more you improve it, the greater the impact! To read the previous article in the series, click here!

Nothing can dampen your day like a roadside inspection. They are a fact of life for owner-operators and independent drivers. A DOT truck inspection may seem like a nuisance, but it's important. Roadside inspections serve as an on-the-spot safety check-up for commercial motor vehicles and drivers. With new technology, inspections can happen practically anywhere along the highway, rural roadways, truck stops, and rest areas. So it’s best to be ready for them! There are several types of roadside inspections with the most common being conducted by Commercial Vehicle Safety Alliance (CVSA) and DOT-trained inspectors. The CVSA has six different levels of roadside inspections with varying degrees of detail. Level I is the most common and involves the examination of documents and a detailed vehicle inspection. It normally takes about 30 minutes to complete this type of inspection, which might seem like an eternity when you’re on a tight schedule. However, if you plan ahead and prepare, you’ll pass your roadside inspection with flying colors in no time! 1. Keep documents up-to-date and readily available A “typical” Level I inspection requires a review of your driver’s license, medical examiner’s certificate, driver’s record of duty status (log book), documentation of annual inspection, hazardous materials paperwork, and permit credentials. Your log book should be current to the last change of duty status, but inspectors might review up to seven days. Andy Blair , a DOT-certified inspector, suggests making your documents easy to inspect. Place all your documents in a binder or folder so the inspector can quickly go through everything at once. You’ll look organized and professional and will probably be on your way faster. 2. Be professional and courteous to your inspector This should go without saying, but attitude counts. Inspectors have the discretion to inspect who they like. If you make inappropriate or rude remarks you’ve probably just increased your chances of being chosen for an inspection. Inspectors don’t have quotas for handing out citations, but they do have to conduct a certain number of inspections each day. You’ll get picked someday. It’s just part of the job. Just smile and be polite to your inspector. 3. Keep your truck clean and know where everything is kept Your truck cab doesn’t have to be immaculate, but it should be relatively clean. If your truck cab looks like a mess then you’ve probably increased your chances of an inspection. When Blair sees a truck cab that just looks and smells bad, he thinks “This guy really doesn’t keep after things too well. The chances of me finding something wrong with the truck are probably better.” Keep things as tidy as you can while you’re on the road. You should also keep the outside of your truck in working order too. Inspectors will look at things like brakes, tires, windshield wipers and much more. Before each trip make sure you check your lights to ensure they are all in working order. Look at your tires for baldness or sidewall damage. Any tire damage is usually an invitation for a thorough inspection. Additionally, know where the fire extinguishers and emergency triangles are kept. 4. Be aware of the “Out-of-Service” criteria Out-of-service violations are serious and need to be addressed immediately. If you attempt to leave before an out-of-service situation has been fixed, you could face disqualification and large fines. Know the out-of-service criteria and check the items when you conduct your pre-trip check . Items include the brake system, coupling devices, frame, fuel system, tires, and many other items. Roadside inspections are part of the job. They can happen anytime and anywhere. Inspections may be annoying and time consuming, but are important to ensure your safety and the safety of others on the road. So instead of waiting until the next time you are stopped, start by cleaning your cab now, organizing your documents, and brushing up the out-of-service criteria. Be professional, polite, and smile and you’ll be on your way to passing your roadside inspection with flying colors! This article was originally featured on TeamRunSmart.com .

With 2,000 owner-operators and 11,100 company drivers, Schneider National is one of the largest carriers in North America. To stay ahead in the industry they teach their drivers how to drive for fuel efficiency to keep this variable cost low. Here are Schneider’s top fuel efficiency tips from Rob Reich, VP of Maintenance Operations. Slow down. We set our trucks to cruise at 60 MPH. For every 1 MPH above 60, you will lose 1 percent MPG. This can add up to a minimum of $1,100 per year in unnecessary fuel costs. One of our owner-operators slowed down his speed by 10 MPH and realized he could take an extra 40 days off each year and make the same amount of money! Consider upgrading your truck. At Schneider we have tested all of the trucks in the market and have found that new trucks are becoming increasingly more aerodynamic. Manufacturers are focusing on fuel efficiency and are in compliance with Greenhouse Gas (GHG) environmental regulations. Look into the numbers and find out if a higher payment for a new truck will save you money, not only on maintenance but also on fuel. We have found that the Freightliner Cascadia Evolution with the Detroit engine is the most fuel-efficient truck on the market today. Freightliner continues to be our provider of choice because of their consistent performance, commitment to innovation, driver comfort, safety and fuel economy. Invest in trailer skirts. If you own a trailer, trailer skirts provide great fuel efficiency improvements for the best ROI (return on investment). For our fleet we have seen a 5-6% increase in MPG at highway speeds. Avoid Idling. Idling can cost thousands more on fuel alone per year. This doesn’t include the added engine maintenance expense that results from excessive idling, which is harder on your truck’s engine than highway driving. Maintain Your Tires. Maintaining proper inflation is free, relatively easy, and the highest cost-saving maintenance you can perform on your truck. Improper inflation is the greatest reason why tires fail or wear out prematurely. It also wastes fuel and weakens performance. Perform a daily pre- and post-trip inspection to check pressures, look for leaks, punctures, broken valve stems or embedded objects such as nails. Follow these tips for fuel efficiency and you will see your fuel costs decrease and you will be able to keep more money in your pocket.

Preparing for winter starts with a maintenance policy Fleets and drivers should always have a well-written maintenance policy in place. This policy should be specific to their vehicles, equipment, geography, distance they travel, loads they carry, time on the road and other pertinent facts. Conditions for winter travel can obviously be more challenging and safety is the top priority. In general, drivers should follow this checklist prior to any trip: Maintain proper tire pressure Monitor tread depths Watch for irregular wear Inspect suspension components A pre-trip inspection is not only important to improving safety, it is also critical to ensuring the most efficient performance from the trucks. The advantages of a pre-trip inspection include improved highway safety, reduced downtime, increased productivity and better on-time load delivery. Cold weather tire pressure requirements Tire pressure monitoring is a key component of a complete tire maintenance program. The number of tire related issues and roadside events will be significantly reduced by maintaining proper tire pressure. This ultimately results in less downtime on the side of the road. With the onset of cold weather, tire pressures will drop. It's believed that for every 10 degrees Fahrenheit the temperature falls, tire pressure is also falling between two and three psi. It's imperative to set the tire pressure prior to operating the vehicle at the onset of the trip while the tires are at ambient temperature. The ideal time to check tire pressures is during the pre-trip inspection prior to departure. Driving, even for a short distance, causes tires to heat up and pressure to increase. Drivers should always use a properly calibrated gauge when verifying the pressure of a tire and should not rely on the aspect of the tire. If the tire is 20% below the recommended pressure, it must be considered flat. It should then be removed and inspected for punctures or other damage. Failure to do so may lead to unwanted downtime. Winter treads Fleets and owner-operators know their specific operating and delivery conditions. If the fleet is located or operates in conditions that are likely to experience winter conditions (such as the Northeast, northern Plains, upper Midwest, Pacific mountains or Canada) they may want to consider a specific tire tread or a retread for those conditions. Michelin offers specific products for these conditions. The MICHELIN XDN 2 tire and the pre-mold retread, all-weather, non-directional, drive selection are optimized for exceptional traction on slippery surfaces. The MICHELIN XDS 2 tire and pre-mold retread are designed for year-round drive axle traction optimized for challenging winter conditions. Inappropriate tires in winter weather applications If during the tire inspections the driver starts to notice circumferential cutting, chunking, spin damage or tearing, these could be signs the tires are experiencing low traction conditions. The fleet operator needs to have a dialogue with the driver about the specific conditions that he is experiencing. The fleet operator should work with the dealer to discuss the appropriate tire selections for their operations. The use of tire chains in severe winter weather conditions Tire chains are often necessary in certain regions and with challenging winter conditions. Chains are often required as determined by local law enforcement. Operators should also make sure to follow the chain manufacturers’ instructions for properly mounting the chains with the correct type and size to ensure safe operations. They should also refer to the tire manufacturers’ service manual for recommended directions for both speed and duration of use. For new drivers and drivers new to a fleet, it may be beneficial for the driver to be trained on the equipment specific to the vehicle and be sure the equipment is correct for the season. This can be done in the yard when the weather conditions are fair, well before they are experiencing the challenging conditions with the weather elements. The end goal is for the driver to be comfortable with the process.

One of the biggest issues the trucking industry is facing right now is some of the problems involving maintenance. Maintenance costs are going up significantly and the time it takes to get maintenance done on your truck is increasing. This comes at a time when freight rates are at an all-time high which means owner-operators can’t afford to take time off the road to get a major problem fixed on their truck. What is causing these issues and how can you reduce the chance you have to deal with a major maintenance issue? In this article, we will be answering these questions and more. Labor Issues Many jobs and industries are dealing with labor shortages right now, and truck mechanics is no exception. Currently, qualified mechanics are just as hard to find as qualified drivers. This, combined with the truck shortage, is causing major problems. Due to the truck shortage, truckers are driving older trucks longer, which means they are wearing down and need parts and maintenance to continue to run. All of this means mechanic shops are way backed up and owner-operators are willing to pay whatever it takes to get their trucks fixed. Labor rates are rising quickly. A few years ago, maintenance on average cost $125 per hour. Now, maintenance is up to $190 per hour. This is because labor throughout the country is in short supply. Mechanics are harder than ever to find and the rates paid to these trained mechanics keep going up. Also, shop fees are being added similar to the type of fees you would see on an events ticket website. This is because shops can charge whatever they want with truck maintenance being in such high demand and maintenance options being in such a low supply. Supplier Cost Increases Every supplier of truck parts and fluids is also increasing costs as they are dealing with the same labor and supply chain issues as everybody else. Of course, as suppliers are forced to increase costs, maintenance shops are forced to as well. Fluids Fluids have increased two or three times this year already. Oil, transmission fluids, and DEF fluids have all seen significant increases. Parts The cost of metals has increased overall which is what’s causing truck parts to increase so significantly. Also, manufacturing plants for these have been closed which is creating issues all the way up the supply chain. Tires The price of tires has already gone up once and manufacturers are saying more increases are coming soon. Just like everything else, raw materials, labor, and shipping costs are all up. Labor Time With all of the issues that are going on at the same time throughout the supply chain, labor time has been extended significantly. As we’ve mentioned previously, parts shortages, lack of trained mechanics, and older trucks on the road are just a few of the factors that are not just causing the cost of maintenance to increase but also the amount of time you need to wait for maintenance to be completed. All of this is making it really easy for owner-operators to leave. They don’t have the time or the money to wait for a repair and there are other options out there. Fleets are offering a good salary with sign-on bonuses as high as $10k to drive for them as a company driver. Trucks are in such high demand that owner-operators can sell their broken truck for $10k-$20k more than they paid for it a year ago. There are also other industries that are hiring for good money which makes it easy for drivers to be home every night. Opportunity Cost The biggest takeaway is the opportunity cost of lost revenue in such a hot market from being off the road waiting for a repair. This might be the biggest issue for owner-operators that are facing maintenance issues. On top of maintenance costs being high, owner-operators are also losing out on significant revenue if they are forced to be off the road for a significant amount of time. This is because freight rates are at an all-time high so missing out on these earnings even for a short period of time is a big opportunity lost. If you’re down for a week, it means you’re losing about $2,400 in take home pay or more when considering the loss of revenue plus the fixed costs you still have to make with the maintenance as well. What Can Be Done? The most important thing you can do to keep yourself on the road is plan preventative maintenance around home time. Try to catch stuff before it becomes a serious issue so you can wait for the part you will eventually need or get it fixed quickly before it becomes a big issue. This can be done with good pre and post-trip inspections and checking for any leaks or drips. Now would also be a good time to find a preventative maintenance program. One type of preventative maintenance program is a fluid analysis. This analysis can help identify metals that are wearing down within the fluids that need to be replaced early so you can get the parts you need ordered ahead of time and get the maintenance scheduled when you know you will have downtime. Another type of preventative maintenance is after treatment ultrasonic cleanings. Doing this will clean out your DEF systems ahead of time so it stays functional for longer. Lastly, now would be the time to adjust how much money you are putting aside for future maintenance issues. We’ve updated our recommendation for how much you should be saving based on how old the truck is and how many miles it’s driven. You can see our recommendations in the chart below. This is no master savings program. Every trucking business should have their own individual maintenance savings program based on the type of freight, length of haul, and road conditions they see most. We see the cost of maintenance continuing to rise for the foreseeable future. Make sure you’re taking the appropriate steps to mitigate the problems if a maintenance issue arises. We can’t emphasize this enough, the cost of being off the road right now due to a maintenance issue is detrimental not just because of the amount of money you have to spend on the maintenance but also because of the amount of money you will be losing while taking time off during a hot freight market.

Cold weather and lack of sun can be a dreary time for anyone, but as an owner-operator, the troubles that occur during this time of year can affect more than just your mood. Storms can feel like they come one right after the other, and they only add to the already long list of weather-related issues. Higher truck idling times and high winds can lower MPG, and poor road conditions can not only increase the risk of an accident, but also the likelihood that you won’t get enough miles each month. So what can you do to help counteract these issues? Here are our eight tips to keep you ahead of winter storms: 1. Communicate with your Driver Manager Discuss concerns with them from the start. Work as a team to create a strategy that works best for you to obtain more miles to make up for a deficit. 2. Always be prepared Plan each trip to avoid winter storms if possible by checking forecasts and potential construction areas along your route. Chart out fuel, meal stop locations, and allow extra time for traffic delays. Click here for weather mobile apps available for download. 3. Fill up on fuel Fuel can thicken or gel in extremely cold temperatures, so remember that a full tank is less likely to have problems. You can limit (and sometimes eliminate) the number of additives you have to use if you decide to purchase fuel farther North. Consult your engine manufacturer for additive guidelines. 4. Play it smart and stop If your gut is telling you to stop, pull over and stop. It’s better to play it safe than gamble with your safety. One carrier claimed that they would trade lower operations (and a little less revenue) for not having weather-related accidents anytime. 5. Reduce your idling costs Purchase an Auxiliary Power Unit (APU) to provide electricity and heat. Save your receipt to claim the APU expense on your tax return. Click here for a full list of Idle Reduction Equipment from the U.S. Department of Energy, and click here for tips on how to save fuel. 6. Check your cargo Icy roads and goods shifting in the trailer are not a good combination. If possible, monitor the shipper’s loading procedures to ensure weight has been evenly distributed within the trailer. 7. Perform a thorough pre- AND post-trip inspection Be diligent with inspecting everything visually and hands-on. Listen carefully for air leaks, because small leaks can become big leaks in extreme cold. Post-trip inspections can reveal problems that might be fixed while in the sleeper berth or off-duty. 8. Set up emergency funds Having a reserve savings account set aside just for these circumstances will take a lot of worry off your shoulders. Although bad weather can’t be controlled, you can take the right steps to prepare yourself before it hits where it hurts the most. Above all, remember that your safety and the safety of others should be of the utmost importance. Indicators are showing that we will have a fairly mild winter, but it's important to always be prepared.

Organizations that manage a fleet of vehicles can achieve significant savings by following certain fundamentals on sustainability and using new technology. In the process, they will conserve fuel and cut down on carbon emissions, as the following focuses on fuel savings. Savings Calculator The best way to save money on fleet maintenance and fuel economy is to keep each vehicle in top shape. Periodic inspections and the use of appropriate oils and other lubricants help extend the life of a vehicle. Fleet managers should use a savings calculator to get a clear view of how much they can reduce expenses by checking oil and fluid levels. The savings calculator can help fleet managers determine the number of trips or miles to accumulate in one day to achieve goals of cost-efficiency. It can also be used to decide how many drivers to schedule for a particular day, week or month. Drivers, maintenance, and fleet operators all contribute to fuel costs. How to incorporate the savings calculator into your fleet plan A big part of fleet management is monitoring gas prices and figuring out average annual miles per vehicle. By watching this data, along with average miles per gallon, a company can analyze fuel cost projections and possible alternatives or strategies on how to cut costs. There are many methods of cutting costs on fuel or getting the most productivity out of your fuel costs, including planning tighter routes. Keeping engines well lubricated helps lower overall fuel consumption. Saving by Taking Care of Your Fleet One of the best ways to optimize fuel economy in terms of miles per gallon is to use modern fuel tracking technology. By keeping careful track of your fleet with a software platform and using commercial heavy duty quality CITGO energy oils you can achieve 3 percent fuel economy savings. Software such as FUELChex monitors fuel usage of each vehicle in your fleet. A common practice for fleet management is to refuel in the morning rather than later in the day. Checking and replacing the air filter regularly will help keep the vehicle running smoothly. Another way to save money through fleet management is to use Oil Drain Interval Optimization. This strategy can triple the time between oil changes. It's part of CITGO's Guaranteed Efficiency Program. Other Ways to Increase Fuel Efficiency It's best to review the manufacturer's manual before making any type of adjustments to your vehicle. Pay attention to tire pressure and traveling with less weight. Only use an appropriate motor oil that is compatible with your engine. More fuel will be saved if you shut off the engine and restart than letting it idle for a lengthy period. Conclusion The key components to regularly inspect for keeping a vehicle in top shape are tire pressure, engine performance, oil level, and air filter quality. Using fleet management software is the key to gaining the greatest amount of fuel efficiency with your fleet. By targeting, measuring and monitoring specific metrics, you can make adjustments to your fuel cost planning.