Question for my Owner Operator Brothers

...as well as the demand in other countries. China, India, and bunch of other nations will keep chugging along without worrying about some mythical endangered unicorns and offending enviro-wacko groups.

Although I read today that part of the reason why oil price went down today was partially due to less than expected demand growth in China.

As far as what I'm going to do if fuel hits $5/gal, I'm leased to a carrier so I don't have much power to negotiate the rate. If our agents can't manage to get acceptable rate, I'll just park my truck for a while and take a vacation.

 

Hello,

I've been in the insurance business in Wisconsin for years now and have really gotten to know the trucking business well. i am looking at purchasing a truck and trailer and sending a driver out to nd. i understand all the legal jargain and know how to set all that up. i have one contact as far as getting on with a company but im curious how difficult it is to have contiunious work? would it be better to haul water or sand out there? any information would help. im very passionate about this, some people may think im crazy but its a small investment if it doesnt work out whatever at least i can say i tried. also i just need to find the right driver.

 

This thread isnt about your classified for a driver and learning everything about owning a trucking company. Please use the search function and quit trying to get all your info from us hardworking saps. It gets tiring reading all that "gee teach me everything you know crap" on a thread that is unrelated. Go hijack somewhere else.

 

yeah. what he said.

 

Sorry Bill, The price of oil these days isn't set by demand. It's set by traders in NY, and demand is maybe half the price. Some of these traders had the balls to rent tanker ships and put them at anchorage creating "demand" which they then fill. $5 diesel was the final nail in an overlevereged society a few years ago, and it will cause any momentum we've gained recently to come to a halt.

I agree with you on CSA, but $5 diesel is way bigger than it. Call me gunshy or whatever, but I lost $100,000 in the last bust, and I'm not about to do that again. I want to add a truck, but pricing is high, and so is the risk. I think I'll wait another 6 months and see.

As far as OP's question, at $5 the cut rate haulers can't be cut rate, and we saw this last time. Many O/o went out of business which was a good thing in real capitalism. The smart survive and the weak get run out. My cost per mile is based on 3.80 fuel right now and as that goes up, my rates do to. I got fuel today with no discounts at 4.04 so I raised my rates on the loads I'm doing by $100. The agent gladly paid it do to my reputation, and booked me out until saturday.

 

That's just it though, the ones that run cheap in general lack the capital to continue buying fuel or make repairs. At $5 previously, I demanded pricing from brokers and got it. They aren't dumb, even though they act like it sometimes. They want that load delivered without problems, and they are boosting their rates to their customers as well. If there's a broker or trucker working direct with a shipper that doesn't have a FSC in place, they deserve to go bankrupt, and they will at $5 diesel.

 

Yes, speculators will drive wild fluctuations. Just look at what happened this week. Iran says they are going to stop supplying a couple countries that use very little Iranian oil and we she a spike. But that will then drop back.

SUSTAINED levels ARE driven by the supply and demand cycle.

As has been said in different ways here, any broker or carrier that doesn't have FSC in contracts is going to get hurt during rising fuel prices. And will likely go bust.

But to put $5 fuel in prospective. From $4 to $5 has less than less than .6% impact on inflation. This discussion is focused on the micro aspect of the economy. That is what the guys that bought a job do. Forget the scare tactics of the news, politics and politicians. Start looking at economic history, data that is not slanted towards a political agenda and what IS happening.

As a business person I care about what is happening from a political prospective but I am not going to wait on what happens in an election or stop looking for opportunities because this or that might happen.

I don't invest and build a business with only a 1-2 year outlook. Honestly, investing based on what COULD happen over the next couple of years is the way to fail. I look 5-10 years out. If any of you do not believe in the next 5-10 years we are not going to see a period of sustained economic growth then you need to take advantage of the high value of used tractors and sell and become a company driver.

The combination of being a business person and a pessimist is a sure fire way to fail.