EOBR / Bankruptcy link

I read both articles. Easy to see the correlation. And other regulations are causing just a much financial stress(new truck emissions reliability, cost, utilization etc. We are entering a brave new world with little understanding of the unintended consequences. Operationally my own company of 275 owner operators is slowly adjusting to the HOS constraints, kind of getting used to the fact that we will have ELD's someday. We are a very segmented and specialized end of the trucking business, and none of our competitors have adopted any of the new technology, and will be the last to do so. But this end of the industry(power only) has a large # of older experienced drivers who don't need a lot of miles to survive, indeed, by trucking standards we do 30% less annual fleet miles than a typical small truckload carrier. And make less money also.
This has kept me and thousands of others from updating equipment(running 15 old tractor), because the rate structure in the industry still has not reflected the realities mentioned in the article. We have "early adopters" who bought emission trucks and have not done well. A friend of mine whose company adopted ELD's has had the same loss of income as indicated in the article.

 

What I read was "companies who profit only from being illegal tend to go broke when forced to follow the same rules as everyone else". How does an EOBR cause one company to go broke but not another company? If there are XXXX tons of freight to be moved, it will take XX trucks to do it. One company figures out how to profit from moving that freight, another company loses money moving that same freight.
I could understand the EOBR's being the reason for Bankruptcies if the companies running EOBR's were the ones going broke while companies that do NOT run them were profiting more. That is not the case so how could EOBR's be to blame? I think its because of the old mentality of "i need to run more miles (hours) than my competition to make more money than them". If you are hanging on to that business plan, your days are numbered. You had better figure out how to be profitable running legal, figure it out today because trying to do it the day after DOT shows up at your office is obviously not going to work.
The sad reality is this, trucks hauling general freight are limited to small profit margins. If you are competing with SWIFT, you had better figure out how to survive on the same profit margins as them, thats about $30 per day per truck. Good luck!

 

It is a well known business principle that companies by far usually fail due to mismanagement, even when they get everything else right.

 

Ok first I want to ask where do they get this data because not one time ever in trucking have I been asked anything? 2nd I still don't understand why the FMCSA thinks that drivers on paper drive 16hour days we don't...........I never drive over my 11 most days don't drive that if I do edit my log it's from being held up at shippers and receivers I'm not going to log my five min commute from the truck stop when it takes the shipper 6-7 hours to load when I'm at slow places I'm in the sleeper sleeping rested for when there ready, I take more than five min getting out my truck at night to use the bathroom and don't log that!

Most people that go under make bad business decisions they don't run there trucks as a business and are not good with managing their money! It don't have anything to do with how many hours they can drive in a day or how many miles!

 

People don't want to say "yeah we failed" so they blame the HOS or the Elogs or the big companies or sun spots or the weather. Anything but them.

 

There is a wide variation in the return on investment in the trucking industry. USA Truck has been running in the red for several quarters but Heartland Express in a similar business is one of the most profitable out there. Both run ELD's and have similar business models. In the opinion of the fellow in the article, small carriers tend to go out of business when relatively small stresses are met. Indeed, it is mismanagement. The reason he wrote the article is to give the rest of the industry a heads up and start charging more to make up for the loss of productivity. Also a heads up that if you are well run company, small or large there is opportunity to take the business that your bankrupt competitor just dumped into the market place. The playing field at the moment is uneven. It will be even in the HOS enforcement soon.

 

Swift makes FAR more than $30 per day per truck in profit! Where you come up with THAT number, I'd be very interested in knowing... Their P&L statements indicate 20x that number per truck... otherwise, how would the execs be able to afford those yachts?

 

And Heartland got bought up by Gordon. Not sure if that falls in to the "one of the most profitable" like your description stated.

 

I believe that's the other way around but: potAto; potato...