No experience but getting Authority

Discussion in 'Ask An Owner Operator' started by That New Guy, Feb 7, 2011.

  1. That New Guy

    That New Guy Bobtail Member

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    Feb 7, 2011
    Ypsilanti, Michigan
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    I've been a successful business owner in the past and have always had a love for trucking. I am researching getting my own authority and starting my own Incorporated company. I plan on hiring an experienced trucker to drive for my company. I plan to pay him/her well (.50 to .55 a mile) and give good benefits.

    I will start out with 1 truck and 1 driver (obviously not me)

    I need to buy a good reliable used truck for about 30K. I have heard stay away from Volvo because repairs cost to much and parts are hard to find. What are your thoughts on a Kenworth or Peterbilt? They tend to have a high resale value but do they break down alot?

    I am going to start out using a broker since I have no connections and build from there? I hate employing a middleman but whats your feeling about brokers?

    Can you also tell me some reasons why you've seen other small trucking businesses go out of business.

    Thanks alot to everyone who responds!
     
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  3. 7mouths2feed

    7mouths2feed "Family Man"

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    Nov 29, 2007
    Jacksonville, AR
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    One truck with driver will not earn you anything. The only reason for doing this would be to A) Just be able to say you own a truck. B) Are a great guy looking to give someone a job that you finance or C) understand that your not going to make anything before getting at least 2 more trucks and want to keep your risk cost lower.
    As for trucks yes Petes and KW's have higher resale but not only do they cost more up front parts and service are typically much higher. Personally (assuming you insist on doing this) I would take the $30k and buy a pre-03 Columbia with a 12.7 Detroit and rebuild the engine, put in new clutch and have every last detail checked by a reputable mechanic. Now assuming you hire a trucker and not a window licker to drive the truck you will have a good milage that will last for 800k plus with hopefully minimal repairs on the road.
    I could say sooooo very much more here but I'll leave some for others to hit upon.
     
  4. Blackjack

    Blackjack Light Load Member

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    Sep 18, 2007
    Right on the Left Coast
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    Where do you intend to find brokers that will pay well enough to cover your expenses? Fifty-five cents a mile plus good benefits is very generous and should buy you a great driver, but a lot of your competition will be paying 20 or more fewer cents per mile with almost-as-good drivers.

    What do you intend to live off of while you build your company? One truck may earn you a little profit, but it won't be enough to pay yourself even a modest full-time salary.
     
  5. Big John

    Big John Road Train Member

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    Oklahoma
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    I want the driving job, .55 cpm and bennie's also where do I sign up. This is the best thing I have heard in awhile. With your business plane I would request I get paid up front.
     
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  6. Transport Fool

    Transport Fool Bobtail Member

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    Mar 7, 2009
    SC
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    Look at reality... Some O/O's that drive themselves hardly get by; how do you expect to with hiring a driver?
     
  7. Brandonpdx

    Brandonpdx Road Train Member

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    Dec 27, 2007
    Elkhart, IN
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    I don't understand how the math would work if you're paying a driver and all the overhead. What would be left for you?
     
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  8. Big John

    Big John Road Train Member

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    Oklahoma
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    7mouths2feed, I agree with everything you have said here but this one.

    When you go to buy new they are all around the same price it is just how well you negotiate on the sale price and you are correct on the resale value. The hoods are a lot easier to work on then an aeryodyne truck and the hourly rates are the same no matter what they are working on. Volvo and shaker parts are just as high or higher. Ever work on or buy parts for a Mercedes engine. lol
     
  9. G/MAN

    G/MAN Road Train Member

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    Sep 3, 2010
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    I hope that this isn't a serious post. I will respond as though it is serious. To start with, you cannot afford to pay a driver over $0.50/mile pulling most freight, especially when you add benefits.

    You can get a good truck for $30,000. You can also get a good truck for under $20,000. You don't need to buy a KW or Pete to have a good truck. Personally, I prefer more aerodynamic trucks. They will cost less to buy and you will spend less on fuel. In other words, you will make more with an aero truck than a hood. They hold their value a little better, but you will also pay more to buy one of them. No truck holds their value very well.

    You can make money using brokers as long as you know how to negotiate and how to calculate your operating expenses. Brokers control most of the freight in this country. All carriers deal with them to one extent or another.

    The reasons most people fail in this industry are pretty much the same as any other business. People come to this business and buy a truck because it is something that they have always wanted to do. They often have no experience, poor credit and limited resources. Two of the primary reasons for failure are lack of experience and lack of capitalization.

    It will be difficult to make much money running one truck, especially when you are paying so much to the driver. You will be paying $0.50-0.60/mile just for fuel. Add the driver pay and you will be over $1/mile and that isn't including benefits. You will need to add about $0.20+/mile for benefits and taxes. You didn't mention the type of freight you want to haul. If you run your own authority, you will need insurance. I would expect about $0.075/mile just for liability and cargo. I won't get into some of the other costs. There are a number of other expenses involved in running a truck. No driver will take care of your equipment as well as you.

    I have owned other businesses over the years that are not related to the trucking business. Trucking is a little different than other types of enterprises. I think that it is a mistake to buy a truck, get your authority and put a driver in it before you have some actual experience yourself. Just looking at what you plan on paying a driver tells me that you will start out having cash flow problems. Most carriers start drivers out paying about $0.30-0.35/mile. Rates are down, fuel is up. Drivers will steal from you. They will sell your fuel and find other ways in which to take your money. Some drivers will not take care of your truck. I think some deliberately try to tear up your truck. It doesn't matter how much you pay a driver, some will take advantage. I pay drivers percentage. I had one driver who made over $1/mile on some loads and he still stole money and sold my fuel. You will be turning over you business to someone you don't know and you have no idea what they are doing when you are not around. And, if you are staying home, there is NO way you will know what your driver is doing while he is on the road. At least if you have some experience, you will have a better idea of what you are getting into.

    At this point you probably don't even know what rates are doing. How do you plan on buying fuel? You DON'T want to give a driver a credit card. What about a breakdown? How will you pay for it? No matter how new your truck or how good your maintenance, you WILL break down. I have owned trucks and dealt with drivers for years. It is great when you find a good one. It can kill you if you get one that is bad. You can check references, MVR, DAC and still get a bad driver. How about a road test? Do you know what to check or look for when checking a commercial driver? From experience I can tell you that you really want to take a driver on a road check. I had one who said that he had driven for 16 years but could not shift without scraping the gears. You never want to take a drivers word when it comes to his experience.

    In short, you have a lot to learn. The learning curve in this business can be very costly, even when you have experience. You can probably buy the truck and put a driver in it. I would expect you to sell the truck within 6 months.
     
  10. hawkjr

    hawkjr Road Train Member

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    Virginia
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    hell with owning my own truck... hey boss for .50 to .55 cents a mile and driving a 379 pete hook me up!!! im sure we wont be in business long but hell, lets have fun while it last..
     
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  11. Mr. PlumCrazy

    Mr. PlumCrazy Road Train Member

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    Jul 30, 2009
    Lexington NC
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    This got to be a joke right. $.55 a mile and good benefits one truck operation. I'll park my truck and work for you the two weeks you'll be in business. But look in my contract I need you to put if you don't pay me I get to keep the truck free and clear. and I need $22.78 an hour for delays and detention. Two weeks paid vacation the first year which I will take the first two weeks. I'll dig up one of my old union contracts and bring it with me we can go over it and we'll be like YRC (just wont last as long)
     
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