Lease/Purchase Tips

Plus get little side bonuses to move crappy freight.

Prime is just like Swift. They are in this business to make money and they do not run a charity. Their method did not work for me. Forced dispatch, crappy loads, a FM who didn't give a rat's fanny, refusal to move me from that fleet....all on top of having a truck that was a lemon.

Prime has one of the highest tractor lease payments in the industry. You have to pay for reefer fuel, APU rental whether you want an APU or not, the vast bulk of tolls, some of the highest insurance rates I've seen, etc.... yes, folks are able to make it over there. I had poor results and was highly stressed almost the whole time I was there.

My fixed costs dropped to nearly half of what I was paying at Prime. Swift pays all tolls. I don't buy reefer fuel. My average mileage rate, all inclusive, is $1.30. At Prime, it was $1.08...all inclusive. I don't have to work nearly as hard for the same payoff I received at Prime. Part of that is I am not completely reliant on one single person to make or break my business. It's up to me how many miles I run in a week, where I go, what I do. I don't have all the surveillance equipment on my truck, which was another stressor over there.

I'm not trying to say Prime is a POS company. I am saying their business model is not effective for everybody. You might call what I do "chasing miles" and look down your nose at the way business is done here, thinking Prime's way is best. Well, maybe it is for you. It wasn't for me.

Just switching companies, I have a reliable truck that I like. My fixed costs dropped to below what my former tractor lease payment was by itself. I don't have to pay for reefer fuel ($300 some weeks) I will never see a load that pays 90cpm including FSC and lumper...(does Bradenton come to mind?) My mileage is predictable and steady. The only fluctuation in per-mile pay I will see is FSC. Extra drops and pickups are paid. I am never forced to run any particular load or go any specific place.

This is working very well for me. I'm glad Prime is working for you. I just hope you don't get caught in the volatility of the market like I was. It's a really crappy feeling to be doing everything suggested to you that is supposed to enhance your success, yet fall further and further behind. To ask for help (another fleet) and be continually brushed off. To be forced to talk to "the boss" every time there is a mild disagreement with the FM...even when he's wrong and he knows it. I felt helpless at Prime because I truly had no control over what my business did. They handed me a truck and a lease, told me I was running a business and then took every last bit of control away from me. Then tried to place the blame entirely on me for the results. When Steve Larson looked at my settlements, comparing year-to-year, even he had to admit I was doing everything right. I had already turned in the keys and he finally offered me a different FM.

I had to tell him....I already had a different FM. At Swift.

Now. If anyone wants to know how to make a percentage model work, don't talk to me. Talk to IronPony or someone who is successful at it.

If anyone wants to know how to make mileage pay work, don't talk to IronPony. Talk to me.

That's the point of this.

 

I'll say it................... Prime Sucks..................

I wouldn't get out of bed for 1.08 a mile! Especially pulling a reefer.

As for mileage pay, well, thats kinda idiot proof. Although I know some don't quite grasp the idea of it.

 

You would think mileage would be simple, Les. But it would surprise you how many just can't make it work.

The two concepts do not work the same and are definitely not interchangeable. As I'm sure you know from your own experience.

 

Me neither, my point was that everyone gets paid on percentage. If Swift books the freight of 10% less than they pay the driver, the driver gets 110%. If Swift books it for 99% more than they pay the driver gets 1%.

Back to tips--

As a lease operator, expect to earn a little more than your company driver colleagues.
Expect to earn a little less after you pay for the maintenance ie. tires, oil changes,minor and major breakdowns etc.
Keep your nose to the grindstone for the duration of the lease, keep the truck in tip top shape, pay it off and run it for several more years making big fat paychecks. However save some back to replace the truck or you will be right back there starting over on another lease truck.

 

Really? Must have a whole corps of guys to do that... like company drivers!

Well, you can turn down loads - so its not "forced" - and I've never suffered for doing so. I will agree that your FM has quite a bit to do with your success in their system. That's why I ran on the company side long enough to figure out where to end up. I agree your truck was a problem, but not until Freightliner screwed it up for you - wasn't that what you told me?

Yup, its a little stiff, but that payment includes all of the insurance payments too. They do a 3-year loan on the tractors (not 5) so the interest rate and payments are higher. OTOH, you're a lot closer to having warranty coverage throughout the lease that way.

They went to drivers paying for reefer fuel simply to get the reefer fuel down. Amazing how much more close you pay attention to that stuff when you're on the hook for that. But they also got much more efficent reefer units as well.

You don't have to pay for an APU if you don't want one - that's entirely up to you.

They split the toll payments the same way they split the revenue. Keeps you on your toes about when you're going to invest in a toll road.

What years were you there?

I look at it this way... in order for the mileage system to work your carrier has to have the miles available on the loads in order for you to gross enough to cover costs and have profit left over.

Look at Marten... USED to be a long-haul carrier, now they are very regional with a declining freight-base - at least from what the drivers I know over there tell me. They pay by the mile, but their loads are short... hard to make ends meet that way.

OTOH, the shorter the load, the lower my costs are - as long as the price quoted for a load stays up there. But then, if that starts crapping out, I think we'll be in another recession. Everyone suffers in that case - percentage or mileage.

 

My tractor payment alone was $790/week. That did not include insurance, over mileage, maintenance, etc. Total fixed costs except health insurance was $1,175. I was there Sep 2008 to July 2010.

Tractor payment here is $525, with total fixed being $665...which is all inclusive. My average per mile went up and deadhead dropped like a stone.

 

Through the worst of the recession - that had something to do with it, don't you think? A lot of the lease folks I know departed then because of revenue problems. That's also what I used to gage who the effective FMs are - how well their folks survived that mess.

How long is the lease term?

 

180 weeks.

 

Now, Some, not all companys are all the same. Once i decided to lease a truck, I withdrawed my employment from the company, so there for im not a employee. I use there authority to pull freight. I lease a truck through a seperate dept for the company. If My company went under, I can still lease the truck, but i would have to either 1. run my own authority or 2. use another companys authority. and make payments towards the lease. Also a "new" lease agreement would have to be in affect.

 

I believe we will be in another recession soon.