Questions, questions, and even more questions

No. To all of it. Don't do it.

 

How long have you had your CDL and how long have you been driving?

Why would you want to all of a sudden take on a personal endeavor that used to pay almost 3x as much as it pays now?

You could get a company gig that pays .40cpm vs owning your own company that pays $1.03cpm with overhead costs and it sounds like some of the miles are deadheading not paying anything. One of the costs not mentioned was fuel. You also mentioned not having down payments and such (understandable not my main issue) but after mentioned not liking leases that you can't walk away from. Don't do it. I wouldn't.

 

Not to be rude but I'm going to be. Here is a few things to ponder about.

First is you got a lot to learn, get rid of all of that crap you are thinking of. Don't ask other drivers, seek out successful owners who know what they are talking about - HINT there are not a lot of them on forums.

When ever anyone brings up cost of living, wages and other crap, it shows an ignorance of sorts and you can't worry about that when you are building a business. The same goes for this crap (and it is) about the fmcsa, you work within those regulations and if you want to change them, then get properly involved in politics to change them. There is a real reason for these regulations and truthfully it ain't what drivers think. The amazing thing is, I and a whole bunch of others make a lot of money, provide good paying jobs and expand our fleets under those rules and regulations.

Speed limiters? No problem.

Elogs? No problem.

No crying from my drivers because they know they can do the job without worrying.

So my advice is as follows:

Start with learning how financing works, how leasing works and what makes for a good loan or a high chance of getting one.

Then go to learning how to plan this out. You should take the knowledge of the financing part and craft a plan that those finance people can read.

Then learn how the system works. Start with what moves the freight. Yeah it's the truck but break it all down, insurance, the truck, the trailer and so on. Learn how maintance works, how to figure out what a break even point is with replacement costs and how to setup metrics to know when to dump the truck.

Then go back to your plan and revise it, because your POV will change.

About sales, I hate sales people because they can be stupid, doesn't matter what they sell. They are all the same, so keep this in mind, a lot of logistics people think like I do and cring when they see someone hit the door trying to sell them something. But I digress ... It isn't about just who to talk to but how to talk to them. My deals are made above the shipping manager, I have to show them how using my trucks can be cost effective but you may not have to go that far. I do this because a couple of the trucks are setup just for those products they need moved so it isn't really cheap to have a company come in and do the work ad hoc.

On the other hand I have never had to deal with CWT rates or give a quote based on CWT, it does not matter what weight is on the truck but the rate that you charge for the use of the truck. I have a few deticated routes that I negotiated with a price break after X time and it declines a bit further after X+Y time for retaining and shore up their budget bottom line but it is all within my operating budget. See deticated routes are all about exclusive use of that truck and they pay for it, it is not about capacity on demand. They can put an envelop on the trailer or 35k lbs - it costs them the same no matter what and never varies because operating costs never vary.

 

Sound advise, ridgeline.

 

Forget your at home expenses.

You are starting a business. You will employ a driver. Will that driver be you? That driver wants a better job that pays more than someone else, swift, Schneider, etc. will pay him. You also happen to be a business owner. Can your business turn a healthy profit after you pay your demanding driver and also pay for all trucking expenses? Your home expenses will come out of your personal paycheck just the same as they do now.

If you work for 1.03 per hundred (cwt) for 475 miles you will go broke very quickly. You will be pulling for about 1.00 per mile and you think you'll go back empty? 50% deadhead you now are at 0.50 per mile gross. Where's that paycheck coming from now? And set money aside for taxes? You won't make a profit to pay tax on at this rate.

Lease purchases work in the drivers favor approximately one quarter of one percent of the time. Most fail. This does not make you an owner operator. This makes you a sucker who takes on the financial responsibility of owning a truck and all the costs associated with it (risk) for negligible return. If it's windy and your fuel mileage goes to 5 mpg you would make more if you were a company driver. That's how thin it is with those programs. Lots of a/p are 30 days some are 90 or even 120. They don't want you to hound their butt either always asking when the money is coming. That's the sound of someone who is possibly in financial distress. Doesn't look good. That isn't to say you should be a pushover either. Just have to have it laid out what the terms will be up front.

What is the goal here? Own a truck and drive it yourself? Find your own freight? Hire employees to drive for you? All of these require more capital than the last. Finding your own loads and then hiring someone will make buying the equipment the easy part.

 

You summed it up quite well.

 

You can jump into the O/O side of things at any time. Anyone can buy a truck or sign a lease purchase contract with a carrier and call themselves an O/O. Buying a truck is the easy part. Driving it is even easier.

To be successful you have to let go of the company driver mentality. If you are working 2 jobs and still barely treading water then sorry,. but its doubtful that putting yourself into deeper debt buying a truck will show you a light at the end of the tunnel. Learn to live within your means. There are people who can gross 100k annually and still end up living in a cruddy mobile home park living week to week. Thats just who they are. They will never be successful because they lack the self discipline and self control to manage their own life properly.

There are a series of personal checks and balances you have to conquer in order to get into any kind of self employed business venture. Thats exactly what becoming an O/O is all about. This is a business. You need to have the right mindset and work ethic to survive. As such,.. you need to learn this business upside down. Where will your money come from? What will your expenses be? (Personal expenses/bills at home are not included in the business and should be separated) Do you have enough to survive a break down?

I'll give a quick example of how quickly money goes in this business. Last week I did a PM/Lube service, $300. Booked a load back to my home state. Went about 28 mi and the truck started running rough. Pulled over. set out my triangles and called for a wrecker.

Wrecker towed me to the closest CAT shop. $670 for 42mi tow. CAT informs me that the ECM is toast. $2300 for the ECM, $2000 for labor, $1000 to flash the ECM and program injector tables.

Right there,.. almost $6000 cash,.. poof. Into the wind. But wait,.. if you act now you to can enjoy the wonderful world of being an owner operator. Because CAT discovered the source of why my ECM fried. How ever,.. they do not work on OEM side of a Freightliner truck. So another tow $500 to Freightliner to have the OEM side of the wiring harness repaired. Looking at probably another $2500 - $3000 there. Truck is currently still in the shop in Louisiana. I live in Fla. I dont fly,.. so I rented a car home. $406 for the week. My truck still needs 4 new drive tires, which I will have done somewhere else when I finally get my truck back on the road.

Oh wait,.. we forgot I was booked on a load. Yes,.. I called the broker to cancel the load due to unforeseen mechanical problems. Broker made a complaint about me to the loadboard,.. basically called me a liar. I had to show the tow bill and first repair bill in order to be exonerated of that charge. Total BS.

So not only am I operating in a flooded market with other people bidding and taking loads cheaper and cheaper,.. but I'm trying to hold on to cash reserves in order to survive this drought and cover periodic $10k - $14k expenses that will and do come up when you least expect them.

If you are living week to week now,.. what makes you think its going to be any difference once you buy a truck? Do you honestly believe that the money will come rolling in and you will magically be set for life? You need to get your life and finances in order now before ever buying a truck. Expecting to buy a truck and then recover from debt problems is a fantasy in my opinion. Get your life in check now. Find where the problem is and change it. If not,.. I do not believe you will survive for very long in this business.

Thats the cold hard reality of trucking.

Hurst