Buying A Truck....

From O/O to mom's basement??

Holy cow now I'm really terrified!!!!!!!!!!

 

Yuppers,..I had the world by the ballz's and then the floor fell out from under me,...I hung on hoping it would turn because I know what the potential was,..but potential does not pay the bills,...

 

Did you have a breakdown? Is your car-hauler attached or pulled by 5th wheel? You own the truck outright, can't you pull something else in the meantime? DETAILS PLEASE!!!

 

It has a three car head rack with a seven car trailer,..It has a lowmount stinger 5th wheel witch is down low behind the tractor...no way to pull a "highmount" trailer,....Unless I get out a torch and cut the head rack off,...and there isn't anything to pull if I did...

 

Don't laugh. And I am dead serious. I have lost 80%+ of my income in less than 6 mos. I was just down at the store here, another guy, tool and die, company going tits up in a day or two. He has kids, was in a panic, loosing his house in short order, paycheck to paycheck, and there are many here in the same boat.

It is not good out here, and time to think outside the box. F trucking.

Mike

 

No, definitely NOT laughing.

But, I don't see how this can continue much longer than 6 months to a year. The industry could not possibly survive at below cost.

I DO see how it could sustain itself for a short period of time on the backs of low overhead operations taking small losses. But as soon as 1 full cycle hits of breakdowns and truck retirements the freight is going to HAVE to go back up. I don't see any way around it. Shippers will continue to cut costs but this won't be an available avenue to do it. They'll just have to raise prices on the consumer end. And so it goes.

 

The big guys can stick it out, that is a given. But, the specialty guys will be sunk.

And here is the conundrum... Will the little guys, like me, still be around to fill the niche? And will the credit be there for the new guys to take advantage of the situation? They (shippers) need our equipment to fulfill the need, and it ain't cheap to buy these rigs. Credit is scarce out here, as few are getting the money they even need to even stay in business. Right now, if you are in business, you are the bad guy, just watch the news.

We are moving to a command and control economic scheme (look it up, a loose/loose situation [in my day, we called it Communism]), which does not favor entrepreneurs like myself as a specialty carrier or business owner. I am out here to make money... I am not out here to line the governments pockets... Which is the current economic scheme.

Homey ain't biting. And I will not say the rest, because who knows, it may come against me in a court of... Law?

I think we have been duped.

Mike

 

Ok, I'm your huckleberry, waterloo..

First, nice truck; second, nice conestoga; third, I like strong debates (truth comes out better that way); so fourth, here's my response:


I ran the numbers to find a B/E point for operation. I wasn't arguing about start-up costs or what freight is paying right now. You say my B/E numbers don't add up, but then you go into a debate about start up costs and finding decent paying freight:


Let's keep the focus here:

1) B/E operating numbers: I stand by my previous post.

2) Start-up costs: I agree with you. Personally, our house and car are paid for. My only major monthly expense is a student loan of $350/mo. We have $35,000 cash (if we can't get a loan to buy a decent truck in this credit environment, then forget it). For my plan - which I have yet to decide to do but am leaning towards, I would put $6,500 down on a $33,900 2001 Kenworth W900 that just had it's transmission and engine overhauled 8 months ago. I would buy a used flatbed trailer for about $7,500 (want to sell your nice conestoga? haha). That leaves about $21,000 cash to get everything else going, $1,000 above your number (amazing again that I hit someone else's number once I plugged in my own after actually discussing all of the assumptions). I practically live out of my truck now as it is as a company driver, so what's the difference? Ride Hard or Stay Home, right?


3) Freight Rates: I believe this is the crux of the argument. I mean, you can spend the money and figure out your B/E all you want, but if the freight isn't there to make a decent living, then why do it? (See discussion below).


4) Other questions and answers:

Payment - Direct billing, but if cash flow didn't permit, then I would have to use factors to 'ramp up' to the capability of direct billing. To be honest, I have looked at the cash flow analysis briefly, but I have concentrated more on the overall question of B/E and income potential in this economic environment first. So, yes, I would have to look at this in more detail as you suggest. I don't have any hard figures here, just $21,000.

Fuel Payments - Fuel Card




Summary:

I realize there is alot to this. That's my point too, Waterloo. So, it must be discussed (numbers must be run, assumptions must be explained, questions must be asked, etc.) It's too easy as an experienced O/O to say to someone else that things are bad and don't try it. Well, what assumptions are you making in saying that. You made alot about my situation, which I have tried to answer. The real discussion right now should be about an O/O's B/E and current freight rates - all the rest is regular business sense that if someone doesn't understand, they might be better served by picking up a book about owning your own business before asking specific questions on a trucking forum about the viability of owning a trucking business in a recession.

But, the real strength of an argument comes from the strong debate of two different points of view, all while keeping an open mind toward doing what is right.

I agree with your start-up costs, but I agree with my B/E numbers (since no one has made a rational argument against my previous post).

But, the rate question still remains.

I know the bottom fell out last Fall. I was there, too. Late November to January is bad for flatbedding anyways. We know that. Combine that with the worst part of the worst recession since the Great Depression, and yes, I agree with you.

But, I want to state one major assumption that I have about our economy going forward. The government will print as much money as they need to in order to re-inflate the economy. They want inflation. They desperately need inflation. And, they will get it. In that, I think the worse of the Recession/Depression is over. The 900 billion dollar stimulus package, the 0% Fed rate, and a housing market that is finally nearing a bottom along with a trillion dollar bank plan that is coming out next week in order to get banks to loan again (that will pass Congress, btw) will all begin to work over the next year. In the end, it's crazy to say this, but it just costs less to spend 3-4 trillion dollars to save our economy than to spend tens of trillions of dollars to try to re-create it after it has imploded. And no, I am not saying things are going to be great again. I just think they aren't going to be as bad as this past Winter (not nearly as bad, actually).

So, can I find freight that would average $1.30-$1.35 a mile right now as a flatbedder (working through brokers, loadboards, and developing contacts with shippers like Nucor Steel out of Blytheville AR, Auburn, Birmingham, Indianapolis, Jackson, Kankakee IL, Memphis, South Carolina, Utah, Texas, and Seattle) to make it worthwhile - assuming that I believe the worst of the recession is past us, and it won't get any worse than this moving forward?

Well, in seaching on loadboard, I just found a load that goes from Eminence KY to Reading PA and pays $1,000 for 608 loaded miles (1.64/mi).
Within a 150 mile radius of Reading is a load from Baltimore to East Chicago paying $1050 for 675 miles ($1.56/mi).
Within a 150 mile radius of East Chicago is a load from Burns Harbor to Elgin Tx paying $1752 for 1184 miles ($1.48/mi).
Then, you're stuck in Texas and have to dead head 500 miles to find a decent load.
So, for the 3 loads plus 150 mile deadhead in between each (and before from the house), the 500 mile deadhead at the end of it, and the 4% O.O.R. during it all I get this:

2,467 loaded miles + 98 O.O.R. miles + 950 deadhead miles = 3,515 total miles / 6.0 mpg = 585 gallons x $2.30/gal = $1,345 for fuel costs

$3,802 (total revenue) - $1,345 (fuel costs) - $1,000 (fixed costs) = $1,457 profit.


Now, when I was checking, I didn't find these loads over November, December, and January. And yes, I still see ridiculously low paying loads around $1.00/mi. or less. But, I did find these in a quick search, and I find many like it on a daily basis now.

So, I guess the question is: are they for real? Are they? If so, what is wrong with my numbers if you assume my B/E is correct, and I assume your start-up costs are correct.

Thank you for the debate,

Emerson

 

All that paper truckin works out pretty well. Then you get reality. I'm in Carlisle PA and yesterday loaded a 32 foot, 12000 lb load on my 48 step going to Barstow CA for $2640 thinking I have 16 feet and 2 days to fill it with a partial. Guess what??? No partial. So, I'm stuck going 2550 miles for $1.04 per mile gross. Company takes 13%, $350 a week more or less for insurance, workers comp and trailer, leaves me 78 cents a mile. Since I'm under a military load I call it government subsidy - me subsidising the govt by hauling their freight under cost. Every week the freight gets scarcer and loads get cheaper... Mind you, if anyone can survive I can. I have no home, car or bills other than my $1138 truck payment. But, is this what life is about??? Then, when I get to Barstow I gotta hope it's warm because they ride around the truckstops writing $300 idling tickets.

 

Waterloo, just out of curiosity what kind of rates would it take to make it worth your effort?
P.S. That's a nice rig, almost wish I knew how to Flatbed.