Steel Hauling pay for O/O

Hauled some more of this awful steel today. First load deadheaded 84 miles, 3 sheets 1/2" x 96" x 480" 20k. $900 on 56 loaded miles. Reloaded where I delivered. 38k assorted beams, 3 stops, 515 miles $1867.75. No tarps

 

you have got to be kidding me..... no wonder this industry is in the toilet. Have you ever heard the term don't poop where you eat?
assuming I could run at less than $1.50 or $1 or whatever, I would still shoot for the highest rate I can get out of every customer not call and tell them they can take advantage of my ignorance and my equipment and give me the lowest possible rate. And if I was naïve enough to do what you were doing I wouldn't come on here bragging about it.

 

That's more like it!

 

The bolded is one thing that has always interested me. While you owe money on the truck, do you use depreciation or payments as your cost structure? If you use payments, your cost is essentially zero when it is paid off (cash flow method), if you use depreciation then for the first few years your depreciation is lower than your payment which causes problems if you have negative cash flow (but still show profit). You can't run without positive cash flow. Both methods have drawbacks. Replacement cost isn't much of an issue unless you want to pay cash for a truck. Most guys I know hold on to their trucks for long periods.

 

Well, the way I look at things in life is "If he can do it, I can do it too, and probably do it better!"

So yes it's viable. Brutal but viable.

 

the rule of thumb I was taught a long time ago is buy an $80,000 truck, run 5 years, 500,000 miles, sell truck for $30,000. $80,000-$30,000= $50,000/500,000miles = $0.10/mile. Now that formula and those numbers are a bit antiquated, it may be wiser to buy a $25,000 truck, run for 2 years, stick more money in it, run for another 5 years, etc... But I still go by $0.10/mile as a benchmark, you can even beat it if you do it right. You can figure it other ways, $120,000 truck, 4 years, 400,000 miles, sell for $80,000... sounds reasonable. 0.10/mile is reasonable cost of ownership, does NOT include repairs, tires, etc... that's seperate.

Payment has nothing to do with operating cost IMO, other than whatever interest is paid per year.

 

I like this method, but there are drawbacks like I said before. Your actual cash flow is less while making payments. The business shows a profit on "paper" but may be negative in cash flow.


I also like my method, buy $20,000 truck, keep forever, laugh all the way to the bank.

edit: I also find it interesting that you average out depreciation rather than taking "actual" depreciation which is wishy washy anyways.

 

Which is owned by CRST now,go figure.

 

You're kidding right?

 

It wouldn't surprise me. Whenever I have a load brokered through BESL steel yards loathe me because they think I'm one of their drivers. They've told me they have issues with following directions and plant rules, so just what you'd expect from CRST.