New Trucks

In a word. "Volume".

Someone produced a "Business Plan". Ran with it to a friend at a bank. Got a bunch of $$. And then did what you observe.

They hope they have enough reserve to get ahead of a break-even point, B4 they run out of money.

Someone made a calculation X# of Drivers + Y# of trucks = a profit.

 

Money laundry? Very possible.

 

Big companies often buy out smaller ones solely to get their contracts with shippers. The assets and drivers are inconsequential, they are just thrown in with the lucrative contract that the big company actually wants.

 

When they are buying companies they are mainly buying contracts and customers. The assets are of secondary value.

They lease 50+ more trucks and drivers because it costs them virtually nothing to do so and it makes office work and planning easier the more trucks and drivers you have. More trucks and drivers with hours, the easier it is to plan the freight on the dedicated contracts you just bought. Since all the drivers are paid on a CPM basis it costs you nothing to hire more drivers. In fact, given the tax breaks for hiring new drivers, you actually can earn money hiring even when you don't have the freight.

The trucks are not the expense people think for these big companies. Sure for an O/O a truck is a big expense. For these companies that lease, the terms of the lease make these trucks a insignificant expense and they can even depreciate the trucks over the terms of the lease.

Hence you get big fleets growing like weeds, lots of new drivers, and cheep freight.

 

I'm sure the companies get great deals on trucks because they buy many hundreds at a time. They also sell those trucks when they reach 4-500k miles from what i read.

 

One other possibility is that they are bidding on a new contract, and the terms of the contract state that they must have 'x' number of units in order to qualify to bid, that way the customer is certain that, if awarded, the trucking company has adequate units to cover the freight lanes. But then larger companies come in and under bid, so now they have the trucks, and no freight to fill them.