Should I buy a 4 year old trucking company?

You’re on a public Internet forum ask if you should buy the company? You want us to reaffirm your decision that you have already made, the answer would be no. If you can’t make this decision based on your own knowledge, experience and research about this industry then you should not even purchase one truck let alone 11…. Unless you simply want experience bankruptcy and failure.

 

There’s a reason why there selling the business. Think about it.

 

The trucking Industry is more than a year deep into a massive freight recession. The only reason to be buying into trucking right now is to get in cheap and hope to survive until the next boom. New trucks are usually only kept until 500k miles when the warranty runs out and then traded in for new ones as the motors/emission equipment come due for extremely expensive maintenance at that time. It's likely the trucks were bought with cheap money and have extremely low interest rates. You should factor in paying 8+% interest on truck notes to replace the fleet and see what the net margin is with that taken into account as within 1 year that will be your reality. I'd also be checking the loan to value ratio on those trucks as equipment has depreciated massively and they may be showing an oversized net margin by keeping payments low and overvaluing the equipment on the balance sheet.

I'd also be looking at your contract with Fedex as you'll be extremely beholden to them. If you lose that contract after purchase it's unlikely you'll even be able to break even on the spot market right now and competition for all other work will be extremely stiff.

Trucking in general is a low margin business with lots of cash flow that can be extremely deceiving. Given your significant experience in managing business you can probably make it work although I think without industry specific knowledge you'll struggle to make it a very profitable venture.

 

Hell no!

 

A four year old company and they're already trying to cash out ?! What does your CPA and Lawyer think? This sounds like a used car dealer trying to sell a lemon to an unsuspecting buyer who knows nothing about cars! Because you know nothing about trucking the risk reward ratio is way out of whack! And given the current climate in the industry plus the seller is in bed exclusively with Fed Ex. I say no - walk away and start a trucking company from scratch.

 

Note also....that finding & keeping truly good drivers....who also take care of your equipment....will likely prove to be problematic.

-- L

 

Obvious reasons its for sale. Just sit there and really think about. This video might trigger sone extra thoughts of the current market.

 

i have yet to see a FedEx vendor's drivers take good care of the equipment, or drive professionally.

i have seen better driving at the figure 8 demolition derby