Are Californi Heavy Haul companies making profits?

Discussion in 'Heavy Haul Trucking Forum' started by kptnt2016, Aug 31, 2020.

  1. kptnt2016

    kptnt2016 Light Load Member

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    2020 a hell of a year. Im all but hanging it up in the trucking world. I absolutely can't find the profits in California.

    My goal was to become the best 1st generation heavy haul company in the state. In a short span of time I don't know that that makes sense. Through quite a bit of research, conversation and networking some things have become very apparent. Theres a lot if money in heavy haul, the bad part is its all coming OUT of your pocket.

    Numbers:
    Income:
    for a nine axle load around here is between $275 - $375/hr. In Northern California.
    If you can average 3 full days of work with it (24 hr. @ 325/hr. = $7,800/week 31,200 a month) Your doing well. A few companies get them rolling more frequently but they own far more of them.

    Expense:
    A new cozad is $600,000
    A legit heavy spec 230" Peterbilt is $190,000 after FET
    You can add $1,000 tire/wheel failure expense just about every week.
    Add insurance likely $2500 / month (Thats purely a guess)
    And routine maintenance at $300/ mo.

    So just to be able to run a 9axle your monthly expense seems to be in the neighborhood of


    I come up with $14,300/month just to run the nine axle. Thats not including a likely 60k down payment, permitting, lumber and all the accessories needs of a 9 axle.

    On a normal basis I see these things sit for months at a time. Given the fact that a company is very unlikely to be able to run a 9 axle every load they usually run a bunch of 16 tires 130k each new
    A couple 7 axles 320k each and a load of steps and flats.

    If all of your money is inevitably in the yard (you have a mortgage on or excessive rental fees) , how do you turn a profit.

    Or..

    Am i genuinely mis informed
     
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  3. Arch Stanton

    Arch Stanton Light Load Member

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    I have been hauling dirt local for 31 years and decided to expand and bought a used 16 tire and a new KW 880 it took me awhile to get the truck working every day due to rain and the kung flu but the last 3 months I have been killing it and I am sub hauling for the same family that gave me first job 31 years ago so my thinking on the 7 Axel and 9 Axel trailers is why would a trucking company thats already in the business and as you pointed out has millions of dollars in rolling stock sitting half the time ever give you a load that they can do themselves , they will put a haul off until one of their trailers can make the big $$.
    The reason I bought a 16 tire was so I could haul the most varied of equipment it does not matter if its a skid steer or a 336 if it fits it ships.
    My first Selfie
    IMG_0304 2.jpg IMG_0342.jpg IMG_0344.jpg
     
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  4. kptnt2016

    kptnt2016 Light Load Member

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    I appreciate your response. However, the question is not, " why won't they give ME there 7 & 9 axle work?" The question is...

    Are they profiting in the first place. As you said millions in rolling stock thats usually in the yard. Additionally "big bucks" is still just $375/hr.
     
  5. Arch Stanton

    Arch Stanton Light Load Member

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    I believe they make a nice profit but this happens because these companies have purchased the trailers over many years if not decades. The companies I know have been doing this kind of work for a least 20 years, heavy haul is not like the dump truck business where some new guy comes in lowballs all the work hires cheap sub haulers and buys a bunch of used trucks and hires drivers out of trucking school for cheap and is gone after the first slow down.

    That is probably the most accurate description of the dump truck business in California that I've seen in a long time. Excellent.
     
    Last edited by a moderator: Sep 2, 2020
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  6. m16ty

    m16ty Road Train Member

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    I have no idea about rates in CA (never been to the state), but what you say about big trailers sitting a lot makes sense. These people you see have already "made it", and aren't casing equipment payments or mortgages. They can afford to let the equipment sit, but when it does go out it makes big bucks.

    Our 100 ton platform trailer is basically the same way. It's paid for itself, and does probably 6-8 jobs year now. It don't eat anything just sitting there, and it's sitting in a shed to preserve the tires and other weathering.

    In this area (middle TN), you'd be hard pressed to average 3 days a week on a single 9 axle setup, just running local. The people you see with the big trailers started out small (say 7 axles), built up the business and cash reserves, and added to the fleet at they grew.
     
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  7. kptnt2016

    kptnt2016 Light Load Member

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    I appreciate that response.

    But you guys also don't have to pay $500/sq. Ft for land. Yeah I'm just missing a piece of the puzzle. Trust me these aren't old wagons. And I was quoted 320k for a 7 axle. Out here we can't use quads, and quints, so trunking are our option. Cozad, murray, and rackley may as well be named rolls Royce, ferrari and Lamborghini lol.

    I'm just a young guy attempting to learn...
     
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  8. m16ty

    m16ty Road Train Member

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    Does that $375 per hr include permits and escorts? If so, that is awfully cheap.

    Like I said above, those outfits you see with the trailers sitting aren't making payments on them, or if they are the other work they are doing is more than covering the payment. They also don't have a truck just sitting there with the trailer, they have their trucks pulling other trailers. It doesn't cost them much at all for the trailer to just sit there.
     
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  9. kptnt2016

    kptnt2016 Light Load Member

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    No.. my references within these companies say 375 + permit/pilot but thats not really a profit worth accounting for. In california you can BARELY get a guy to show up every day for $25/hr. Any pickup costs u $20/hr. For fuel and the going rate for pilots is $50/hr.

    True they may not be making payments. But how long does it take to actually pay a 600k trailer off from 375/hr. Minus your expenses? (I've calculated it) but your not foing to keep a 80 ton trailer around for 25 years. After 15 years of normal use you have to plan on a rebuild.
     
  10. m16ty

    m16ty Road Train Member

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    $500 per sq ft just to buy an empty lot? That is almost $22 million per acre. If that is true, you're going to have to find you somewhere else to set up shop.
     
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  11. kptnt2016

    kptnt2016 Light Load Member

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    No thats an exaggeration... but you can plan to spend $150k in an industrial zoned acre. Unless your 2 hours from civilization.
     
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