Buying A Truck....

This is the same thing I've said there is NO FREIGHT add your numbers up all you want!

 

Also, with regard to paying for fuel? How is that any different than managing cash flow to pay for fuel during good times?

With regard to checking credit, how is that any different than checking credit during good times?

I don't want to be diminutive. I, too, believe that these issues are important when you are an O/O. But, they are important in any business, at any time. So, yes, I agree with you in this regard.


Yet, I want to emphasize the numbers. The numbers that I represented as a B/E point are about right, I believe - regardless of whether it is good times or not. I think many new O/O wannabe's, like myself, would be better served if we discussed the key factors that go into this B/E point and how to influence it.

For example, Steve Williams founded Maverick and is a very smart businessman. He has 1,200 aerodynamic columbia trucks, versus TMC's 2,500 non-aerodynamic Pete. This advantage might not matter much when diesel prices are below $2.00/gal, but when they spike to $4.75/gal like they did last Summer, it becomes a competitive advantage. How much so? This much:

6.7 mpg (Columbia & Maverick) vs. 5.5 mpg (Pete 379 & TMC)


125,000 miles driven per unit / 6.7 mpg x $4.75/gal = $88,619
125,000 miles driven per unit / 5.5 mpg x $4.75/gal = $107,954

A savings of $19,335/yr (all other things being equal) for Maverick's Columbia vs. TMC's Pete.

This is alot just in terms of one driver. Multiply it by 1,000 trucks, and it is a $20,000,000/yr savings for Maverick. Multiply it by 2,500 trucks, and it is a $50,000,000/yr disadvantage for TMC.

This is the importance of approaching becoming an O/O (or a businessman like Steve Williams) from the perspective of design. I believe it should be the same if you are buying one truck or 1,000.

I mean, I used the .80 B/E number in a previous post - but I assumed 6.0 mpg. What would happen if I bought an aerodynamic truck and diesel prices remained at $2.40/gal. How would 1 more mpg affect my B/E numbers?

$2.40 per gal. / 6 mpg = .40/mi.

$2.40 per gal. / 7 mpg = .34/mi.

So, the decision to buy an aero truck would save you .06/mi. and bring your B/E down to .74. It would become an even greater advantage, of course, if diesel prices rose back to $5.00/gal.

I used to get disappointed when I heard about trucking companies going out of business last Summer. That is before I understood that many of them had 5 trucks - 4 of which were brand new $120,000 Pete's with $1,700/mo. payments, were paying an extra $20,000 a year for fuel as compared to a more effiicient company because fuel prices had jumped to $4.75/gal, and had driver pay along with everything else in addition to having just bought a new home. Then, they come on here and say you just can't make it in the trucking business anymore. Well, no crap!!

I guess it all comes down to this... You are entitled to your own opinion, but you aren't entitled to your own facts. There are so many opinions on this site, but few hard facts. I hope we can change that.

 

TMC bought some freightshakers at one point based on that fuel savings idea. They had a lot of problems with the trucks and went back to Paccar products.

 

Good posts B&T more power to you brother get that truck and make it happen, you might have it hard now but you will be in a good position when things turn around.
Freight maybe cheap but if I can hit my break even point I will haul it I may not like it, but for every day that I sit waiting for better load I'll be twicw as P O. We all know that if the wheels are not rollin then neither is the MONEY$$$$$$.
In times like this you have to cut expenses even your own if it comes down to that, every company out there is cutting expenses in any way they can. I don't want to I like profit for the company but I also want the company to be there when it turns around so I can can see that profit again.

I hope that when you are up an runnin that things do work out for you all can do is Plan and Excute things will bounce back. Good Luck and keep us Posted.

Dirve Safe Target Zero 2009

 

Emo,

You are good at crunching numbers, but they still do not add up. And if you think you will make it out here running at break even numbers you are only fooling yourself.

Do you even know what getting your own authority REALLY costs? You just don't call 1-800-Authority and start rolling.

Do you have say $20,000 to start out? And you will need at least that in cash, above and beyond your start up costs. And I mean that, 20 grand CASH minimum, not credit cards. Stay away from the credit cards. Do you have a house payment, rent, car payment, wife, children, utilities, health ins, etc... Or do you plan to live out of the truck?

And where is all of this magical freight coming from? Do you even know how to go about getting freight? Load boards? Contacts? Your carriers customers? Do you know that many reputable brokers and shippers, especially now a days, will not even deal with a carrier with a new MC#?

How will you get paid? Direct billing? Factor? My avg days to pay were out 54 days when I hung it up and parked my authority a few months ago. What are your plans there?

Then your fuel, yes fuel? How are you going to swing that? Take advances? A fuel card? Let's say your credit is good enough to get a fuel card like FleetOne. They want their money every week, you pick the day. Or if you have exceptional credit they may put you on bi-weekly. Where is the money coming from to pay the fuel bill? Or, will you run it on a credit card? Same deal, but now you have 30 days to pay along with 10 cents more at the pump and some outrageous interest when you are late on that first payment. Then what?

There is so much more to all of this then you think. And all of the wishful thinking in the world will not make you successful out here. I know many guys out here right now that are much smarter than myself in regards to this industry. And they are in the same boat, sitting, scrounging freight for a decent rate out and than finding themselves dead heading home after sitting for a week out of frustration.

I don't mean to discourage you, but it is not good out here. I ran my numbers, and it was good up until July, well into 6 figures, then the bottom fell out. And I mean it FELL OUT! Right now, my equipment is paid for, no equipment payments! I have a small house note of $1000 and 2 car payments of $279 and $212, along with utilities and 3 credit cards at around $10 grand total. My insurance for cars and truck runs $400 a mos.

I would say that the above is pretty average, and not living high on the hog. Well, after "crunching" the numbers, I am having one hell of a time making ends meet out here. My last two loads paid me around $2 a mile. But, after all was said and done, I made maybe $300. I had to dh 150 miles to get the first load, and wound up dh'ing back to the house, no freight. The second load, 100 mile dh, and again, wound up dh'ing home, no freight. Same thing with my buddies, dh, dh, dh, dh... On our dime. The freight is just not there. Sure, you can always get a load to bfe Texas, but than what?

And yes, I am now leased to a carrier, but I can broker my own freight. I have an iPhone loaded with brokers and direct shipping contacts, the internet in the truck, 3 load boards, etc. The freight is just not there to support the numbers you are so flipantly tossing about.

If your numbers were reflective of the reality out here, I would not be coming across with such a negative attitude. I run my show as a business, no diesel in these veins. And right now, I would not recommend this line of work to even my worst enemy.

If you want to buy a truck and trailer, you can purchase mine. 2007 Volvo (2006 emmisions), 135,000 on odo, loaded, on board scales, 530 hp Cummins, 13 spd, 3:42 gears, 7mpg, etc... It even has sat tv with a 27" Samsung LCD HDTV and 2006 Great Dane Freedom w/conestoga kit incld. all of the gear for $100 grand.

And why such low miles? Because I work smart, not hard. And I have had the truck for since Aug of 06.



Mike

 

You're right about having cash money. You need liquidity to operate. But I would like to point out that if you have a business and are "lending" it to your corporation from money you've made free and clear, that it should also be considered a form of credit for business purposes since you should never set out to run at a loss. It should be paid back to yourself before anything is considered "profit".

 

Want to buy a truck? ; )

And I know where you are coming from!

Here are some numbers, 08 year to date till July of 08, on my own authority...

Gross, before fuel $105,660.89 1/1/08 - 7/1/08

July to Oct 08, not a dime, call me stubborn, but I ain't working or running for free!

From July 31 to December 31, with the other guys, as a lease op. I did not drop my authority until October 08, as I sat and waited for things to turn. And they did not. And I was still actively chasing freight. But could not afford to move...

So, in or around Oct. 08 I leased my arse out... Here are my numbers... After starving on my couch...

Gross before fuel $19,789.67 7/1/08 - 12/31/08

You tell me?

Something wrong with this picture?

And you guys want your own authority!!!!!???????

Good f'n luck! And my truck only has 135,000 on the odo! And I have owned it since Aug of 06! Work smart, not hard!

So show me the money Emo!

Mike

And on edit: I just got my first paycheck from the outfit I WAS previously leased onto, $103.64. That same load would have paid at the very LEAST $1700, Detroit to Louisville for Ford MoCo. Nope, paid under a grand. Had to be there! Expedite no less! You need 3 MILLION DOLLARS in CARGO insurance to haul this crap! So show me the money!

So before I say something rude towards the number cruncher, anyone want to buy a truck!?

 

I'm sorry I'm not seeing what your point is. Are you drawing attention to the time frame or the numbers O/O vs. L/O? Cause it looks like you did a WHOLE lot better (even if it was bad) as an O/O??? 100k gross for 6 months vs. 20k for 3?