Factoring/New Authority

I used OTR Captial out or Roswell, Ga. Now, everything was not their fault as many brokers found excuses not to pay. I think I would use Loves next time as they are a more established and reputable company as you know.

 

Whether you finance or pay cash, you still need a good amount of money in the bank-thats the point.

 

If FMCSA were to get a law passed dictating how much capital a new O OP needed to get authority and get going, that would be great news to the mega carriers as it would inhibit a lot of small and single owner ops from getting going and also put a lot out of business. If you take an overall look at the industry over the past 25 years, mega carriers have kept wages low and swallowed-up a lot of small to mid-sized companies by being able to pull cheap freight via low wages and buying large amounts of equipment at cheaper prices than the small guys. Carretta Trucking is a prime example of a carrier who paid 30 cents per mile in 1990-top wages at the time, but when the megas came on the scene with cheaper contract rates, they could not compete. These big carriers came into the northeast with cheap rates and put them out of business, such was the case with Dick Simon, Rhett Butler, Brownie, Butler and a host of others. As mentioned, no matter financed or cash paid for equipment-you need plenty of money in the bank to be safe. Financing equipment can be good, but all it takes is a spun bearing to shut a driver down for a week or more, but you still have insurance to pay, food to buy, and all your other living expenses regardless if your equipment is under warranty or not. Say a new owner op finances $60,000 for equipment, gets started pulling freight, then steps out of the truck onto ice and breaks and ankle (which actually happened to me), how much and long to get money coming in? Can workman's comp pay enough to keep a household, make bank payments on equipment? I know what the cost of monthly cargo insurance is and there is no way anyone could keep up without a good deal of money to fall back on.

 

Those are the same words an old- school driver gave me way back in 1984, pay cash if you can, keep your equipment up, and when/if have to sell; you can at least get something out of it. My wife and I have never bought anything on credit or financed-thank God. I know everyone is not in the position to do so, but believe me, you have much more peace of mind when you have no debts. We just sold our truck yesterday, and are retiring from trucking. All the time we pulled freight, the worst possible scenerio for us would be to have to rent a tractor to get the freight delivered, but that never happened. To let you know, we saved money to buy a used cabover KW, kept driving 2 years for a company while we completely refurbished the tractor, and then saved even more money before we put it on the road. To us, that was the way to do it knowing what kind of equipment you have and not worrying about bank payments. You finance- you are locked into running the equipment to make money. If you can pay cash for equipment, you have major breakdowns,not making enough money, or some other issues, you can park it at home and drive a company truck until things change.