What happens to you guys during a recession?

Discussion in 'Ask An Owner Operator' started by Driver Eight, Jan 11, 2020.

  1. Rubber duck kw

    Rubber duck kw Road Train Member

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    In a year you should have the money to pay your owner ops like a clock, as long as you don't have a bunch of screw up drivers screwing up the cash flow with damages freight. Why would you continue paying 5k per truck per year when you could pocket that instead?
     
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  3. DUNE-T

    DUNE-T Road Train Member

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    Once you are in for a month, it's basically unrealistic to get out. To exit factoring you are not only gonna need money to pay o/o every week, you also gonna need money to buy out all the outstanding balance from factoring company, which kinda doubles the amount of cash you need saved up.

    Taking my example, a guy making $8000 per month will never save up enough cash to get out from factoring, it's not gonna be one year. It's better to bring more o/o on board and pay a smaller factoring fee, like getting 10 trucks and paying only 1% in fees
     
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  4. Midwest Trucker

    Midwest Trucker Road Train Member

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    I was talking about adding trucks to your fleet for what it’s worth. As in buying trucks and hiring drivers. Where if you have an engine go your on the hook for it vs just throwing the owner op aside and finding a replacement.

    I still don’t like factoring under any scenario though unless it’s to get started your first year and that’s not even ideal.
     
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  5. Rideandrepair

    Rideandrepair Road Train Member

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    Cash Flow, I was amazed to find out, during the Banking Crisis, that Major companies borrowed payroll on a weekly basis. That’s crazy. I guess it has to do with balance sheets, and stock price. The largest Corporations carry debt. It’s necessary for them to Operate. All the Governments Federal and Local, same thing. Our monetary system itself is a debt based scheme. I hate debt, but it’s a necessary Evil sometimes. Very few Trucking Companies are debt free. It’s similar to Farming. The Little Guy couldn’t compete, unless He borrowed money for equipment, and farmed more acreage. A lot of them lost everything, and some went into debt with Equipment, and Succeeded. The overhead for equipment and hard work involved with Trucking, is hardly worth the return. It takes a while to figure that out, at first. But eventually reality shows up. This is just a slowdown, not a recession. When a real recession shows up, that’s when the reality hits.
     
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  6. Midwest Trucker

    Midwest Trucker Road Train Member

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    Yeah same here. I envision it like a pyramid. You build the base out then build up from there, like a triangle. The companies that explode overnight essentially are built on an upside down triangle and topple over more times then not.
     
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  7. Midwest Trucker

    Midwest Trucker Road Train Member

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    10 trucks certainly is not going to get you 200k per week to get the 1% in your scenario.
     
  8. DUNE-T

    DUNE-T Road Train Member

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    I stand corrected, it's not $200k per week, it should be per month. I gotta dig my emails and find other quotes, but here is the first one I found
    Screenshot_20200114-011423_Gmail.jpg
     
  9. Rubber duck kw

    Rubber duck kw Road Train Member

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    That's why you should not ever factor, it's very difficult to get out and keep your 5%.
     
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  10. Montanaland

    Montanaland Light Load Member

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    I thought I would have the freedom to bone out a couple months a year. Thats not going to happen running general freight at spot market rates. I owe $30k on a 15' freightshaker. I dont lay down this easy as I will go back to hazmat tanker..which is all I know. Then after 6months if the digital nomad lifestyle is still what I want to do then I can walk away with money rather than break even.
     
    Last edited: Jan 14, 2020
  11. Midnightrider909

    Midnightrider909 Road Train Member

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    The military doesn’t care who is in the White House. But you’re right, I should amass my arsenal now while demand is low before the next election.
     
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