Looking for Insight into being a lease operator

Just so you know I am with you 100%--I know it is tough out there--especially since that was a heavy union freight hauler area--and a lot of very seasoned vets have been put out of work in the past few years--so it is tough--but don't sell yourself short--while you may not have 20-25+ years--6 full years in the NE with YOUR excellant driving record is nothing to sneeze at--just look around this board at the amount of struggling drivers w/less than you--who already have license issues--so keep pounding away--there is work out there for a guy like you! I know it isn't easy--but like an old timer told me years ago--looking for a job--has got to be taken as a job itself and requires alot of effort--so first off--don't write off some of the places you talked to--follow up--be proactive--go in person(and yes I know gas is high and riding around the valley isn't cheap)
but showing your face and interest can go along way! I personally know of 3-4 companies in your area that have NEVER ADVERTISED a position--they are known as very good classy small outfits and people come to them--yes it still happens in this day and age.
Also talked to a buddy of mine earlier--that tells me that there are a couple of temp agencies on the westside (RT100) area that are always looking for on-call drivers for 3or 4 accounts that pay about 18 an hour plus OT--says they advertise on local craigslist all the time--may not be perfect--but it is higher than unemployment and might buy you some time to make a rational decision about your future--and you would still be driving--and it is much easier to find a job when you have one(my experience anyway)and I firmly believe no one would hold working as a temp against you--when you were honestly LAID-OFF--frankly I would think it shows just what type of person you are!
So good luck--I'm sure things will work out for you!!

 

Thank you for the confidence boost 'olhand. I'll be honest I am getting really frustrated with the job search. I've always been that annoying guy who usually gets the job by bugging the crap out of the managers who do the hiring. They call me first normally because I bug them so much my name is the first one they think of when an opening comes up. But I think a lot more people have figured out that doing that works.

If a lead comes up and it's within 20-25 minutes I do take a drive and talk to someone in person. But I drive a 500hp diesel pickup and with no FSC it gets real expensive to drive an hour to the valley. Once the weather gets nicer I can take the bike but until then I really try to limit my travel.

As far as buying a truck and leasing it to Mason Dixon. What do you think you would do if you were in my shoes. Say I submit my application, get approved, get my letter of intent and can buy a sound truck and stay within my $785 a week fixed exspenses. Then being able to average $4000 a week to the truck and stay within 250 miles of the port. I did a break down for a business plan and these are the numbers I got.

$4000 -gross to the truck
-110 -plates, insurance, cargo fee
$3890 -gross balance
-175 -truck payment
$3715 -gross balance
-500 -Maint. acct
$3215 -gross balance
-1500 -Fuel (estimating at 6mpg * 2000 miles per week # 4.50/gal)
$1715 -gross
-30%-income taxes
$1200 -take home pay

I got the $4000 average to the truck by speaking with the terminal manger where I'd be running out of. She told me she has lazy guys who make $2000 a week and she has her runners that make $6000 a week but most of the guys are making in the middle of that.

Could I make that much as a company driver, absolutely......if I could get hired at a decent local or semi regional company. But the struggle I'm having in my head is do I turn down the opportunity to start making that money now or wait it out and try and land a company job again? What would you do?

Justin

 

There is no question in my mind using your figures you could probably do alright--But I think there may be a hole or two--you show 30% income taxes--I'm wondering what you based that on? Also does that included SS taxes--I know many small business owners do not--also--what about health insurance for you and your family--is that in the insurance figure or is that just truck insurance--also any retirement planning?--I know many jobs may not provide these or at least nothing very good? So b4 I make an opinion--these really need to be answered--
Also where does MD pull out of in your area? Is it rail or sea? Do they use their OWN chasis--or the shipping lines--big difference in my opinion-(especially with the new cvsa2010 scoring system)-are all miles paid or just loaded--I know there is a lot of DH with containers--like I said earlier I am not a fan of containers--BUT it is arguable I am spoiled!
It seems to me you have put a lot of thought into this and done a lot of homework--and compared to many starting out you have done a good job and should be commended--also since the truck is going to be yours--you will have other options--once you get going and won't be tied to them
I do not know much about MD--but aside from their (long gone LTL division)they have been around a very long time--so they must be doing at least some things right.
And btw I do understand the fuel situation--I ahve been home for awhile due to 2 major surgeries--I typically do not use my personal vehicle--other that going to my truck(8 miles) or running a few errands every week or so--and my 4x4 hasn't left the driveway in a month! LOL and I am hoping after I finally recover to be able to go back to riding my motorcycles--but that is still up in the air!
Either way--continued good luck to you!

 

Lets see if I can't answer your questions 'olhand. As for the taxes, I figured on 30% being enough to cover all of my taxes. But I haven't had my appointment with my accountant to discuss all of this with her yet so that is still up in the air.

Medical insurance.....my wife has her own that we pay for out of pocket as she works for a small hair salon that doesn't offer benefits. I myself do not qualify for health insurance because when I was 18 I had open heart surgery. So I'm really not to concerned with insurance. As for retirement, the only plan right now is to make our savings account grow as much as possible.

As far as using their own chassis, I''m not sure but I've added that question to my list to ask them next time I call. They do both sea and rail in my area (NJ Port). The trips are mainly drop and hooks from what I've been told and there is always a load coming back to the port so each trip is a round trip.

As far as MD goes, I'm sure there will be days I'm hating life just like working anywhere. But I look at my friend who's pulling containers doing the same loads that I could be doing with MD and he said it's the best decision he's made. So I'm still trying to get all of this figured out in my head and put it down on paper because I don't want to be one of the statistics of guys who become O/O and fail.

Thank you for your continued support and advice 'olhand, and I really hope that every goes well with your recovery so you can get back riding that motorcycle again.

 

DM, the only issue I can see is that your gross is based on 2,000 miles a week and that averages out to $2 a mile for $4000 gross. I am certainly not saying that it can't be done, since sometimes local moves from rails to nearby cities pay $200 for a 50 mile round trip and if you get enough of those along with some decent mile pulls you can probably bring the average up. I would hound your friend to see his pay stubs and statements, total miles, revenue, fuel surcharge etc. broken down just to make sure its coming out even. You can really tell someone who is on top of their operation by the answers they give to simple questions. What kind of fuel mileage do you get? I dunno, 6 maybe 7 mpg. Ok, how long did your last set of drives last? I dunno, I had them for a year. Like guys on here say all the time, watch the pennies and nickles and the dollars take care of themselves. I wish you the best, hope to be in your shoes soon.

 

Thank you Shogun, for the reply and you are absolutely correct about how some O/O don't tell you the whole story on their numbers. My friend pulls for a different company other than Mason Dixon, but they get most of the same loads. The truck gets 70% of the line haul and 100% of the 28% FSC at both companies. But after speaking to the NJ terminal manager again today there are some differences between the two companies.

My friends company he is leased to has their own fleet of chassis' which are well maintained and run radial tires on so breakdowns on the the trailers are few and far between when compared to a shipping line's chassis'. And here in lies the deal breaker for me at MDII. When I inquired about who pays for the repairs on the shipping lines chassis' I was told that the contractor payed up front and then with receipt would be reimbursed within two weeks. This simply does not make any business sense to me what so ever. It's nothing have at least one bad tire A DAY during the summer months. So me putting away my $500 a week for MY maintenance account does me no good when I'm basically loaning the company interest free money for the repairs. I personally don't have $2-3000 a week laying around to pay for their tire bills because I only have 10 grand put away for my own maintenance.

Now at his company he has to pay $165 for his plates and insurance as well as the fee for using the companies chassis'. So that is about $55 more a week than MDII, but when you factor in the little down time due to trailer issues it really is nothing. So after speaking to my friend today he told me that his company just got another large contract that pays $1875 including the FSC for a 700 mile round trip that goes out empty and comes back loaded and they may need more trucks for this. So for now I'm going to keep putting whatever I can in the savings account until I hear that they need a truck.

 

Wow, it is different on the east coast compared to when I was going into west coast ports. Not a single port in '06-'08 allowed a chassis to leave that was not inspected or taken to a contracted facility that did the inspection. It made for a real pain and added time on the loads.

But I hear ya in tires. Lost all tires on one side in Utah one summer when a tire went down, caught fire and did enough damage to the other three (including brake lines) that I would not drive it until all got replaced. That was over $3,000.

Good to hear you are figuring this out. But keep looking at thinking. I am starting to see bigger companies offering $.50/mile with 3-years experience. It may not be in your area yet but it will put preasure on other markets.

 

Glad you checked out the chassis part--that what I was mentioning early--and as for East Coast ports--you cannot begin to imagine the junk that comes out of there--it is unreal.
As for the x-tra for the base plate--that is still pretty good compared to what it actually costs if you did it--
Sounds like you are getting some good solid information--hope things go well!

 

Well I'm really glad that you brought that question up because even though my friend had told me his company has their own chassis' it slipped my mind to ask MDII about it the first time. And you are dead on when you say that most of these container chassis' are junk.

I don't really mind the extra fee for the base plates and insurance because I've seen how they keep my friend moving and he's gone from 1 truck to 3 in a short amount of time. He's also never had anything bad to say about the company is leased to but he's a lot like myself and he understands that it won't always be rainbows and unicorns and can take the good with the bad as long as his bottom line is being looked out for.

Like I said before 'olhand, I do not want to go into being an O/O if I'm setting myself up for failure. I want to get the best information I can before I do anything so I can make an informed business decision and operate a profitable business. To me trucking is a business no matter if I'm paying the bills or someone else is. The more I know how that business works the better off all parties involved are.

 

Does anyone know about MDII in the southern California area? I see them pulling the CRE reefer intermodal containers.

I am trying to find something where I can be home every weekend or maybe every night as an O/O.