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<p>[QUOTE=&quot;boredsocial, post: 6841527, member: 141720&quot;]It&#039;s also very important to make sure you keep your costs as low as possible with any new business venture. The reality is that the revenue environment in trucking is incredibly unstable. What this means is that what you bring in is going to change a lot from month to month or year to year.</p><p><br /></p><p>So what does that mean? First of all grade yourself on a curve. In this environment it&#039;s definitely possible to average 3 bucks a mile on 2,000 miles a week as a solo. Not only is it possible but it&#039;s actually sort of easy if you know your way around the markets. Right now this is a solid B dispatch grade. Not an A... those guys are making more money than I care to speculate on. This also means that if you were averaging 1.80 a mile in January 2016 you were the god of dispatch or not running very many miles. You want to adjust how you&#039;re doing to the market conditions. You have to be willing to work a LOT harder when rates are great because you need to make as much money as you can and get a cushion for when rates will be downright ####ty.</p><p><br /></p><p>This is a HIGHLY cyclical business. Right now we are in an up cycle that will go on for an undetermined amount of time. What we can be sure of is that with prices at these levels there is a LOT of reason for trucking companies to add capacity and for people to start new trucking companies. You&#039;re already starting to see this in driver pay which was up a lot in 2017 as companies squabbled over (very profitable) drivers.</p><p><br /></p><p>The rush to add capacity in the last paragraph will inevitably push supply over demand again and rates will collapse. At this moment we&#039;ll discover who the competent operators are. What will follow will be a brutal period where rates are actually below the cost of ownership. Used truck prices will fall rapidly from their current highs (driven up by people trying to get into the trucking business and add supply!) Operators whose overall cost of doing business is too high will be forced out of business as their burn rates will eat through any savings very quickly. They (of course) have less savings typically than the low cost operators because their margins in the good times were worse because of their higher costs. </p><p><br /></p><p>This is a good time to be adding trucks. Even with the insane cost of equipment, drivers, etc the rates are more than justifying it. At the same time it&#039;s probably a really good idea to expand with an eye to how easily you could downsize and how much that would cost. You want to be able to reduce your exposure when the rates go back down... Which honestly isn&#039;t looking likely for 2018. I&#039;ve been hearing things about things like renting/leasing Ryder trucks at pretty reasonable rates. It&#039;s important to remember that this is the trucking business not the truck owning business. In fact I&#039;d probably measure any used truck purchase against a Ryder truck and make sure the Ryder trucks numbers aren&#039;t better. I&#039;d say that&#039;s pretty much the max cost you can tolerate without the kind of premium freight that established trucking companies live off of.[/QUOTE]</p><p><br /></p>

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