Been lurking the forum for some time & love it here. Soaking up a lot of good information.
I am writing my business plan for operating a small fleet, starting with 1 truck & 1 company driver (not me), and growing from there if we turn a decent profit. I dont want to jump in and buy multiple trucks even though it could reduce cost with a bulk purchase. I am new to the industry and want to start slow and build from 1 truck & 1 driver. My 1st driver will really be more like a teacher for me & a partner in the business. My dream is that he would grow with the company eventually becoming a VP of Operations or fleet manager.
In the beginning we will obtain freight on the load boards and I will dispatch the driver myself, with a goal of building direct shipper relationships as time goes on. As we grow I will hire more drivers and dedicated dispatcher to assist me in the office. We plan to run dry van and reefers, nationwide from our home base in the Midwest.
I have a strong cash base and will not be taking loans for any assets like trucks & trailers. My main goal is to reduce or eliminate as many operating costs as possible. This includes maintenance & MPG.
With that in mind, I am having trouble choosing between an older truck (W900 or 379) with a rebuilt S60 or C15, or a newer truck with aerodynamic design and warranties (589, T680). I see many pros & cons with both options. Older truck with rebuild will have a legendary workhorse engine, pride of ownership/driving, & leave more money in the bank for expenses, but it will have worse MPG and other non-engine related maintenance issues. Newer truck will have better MPG & a limited warranty, but will have higher initial cost, DEF & other potential problems with the newer emissions engines. As a new company, insurance will be insanely expensive with either choice.
The most important thing to me is keeping my driver happy & reducing operating costs, building profitability.
Sorry for the long winded post, but I wanted to give you context to my situation. If you had cash to buy outright, what would be your advice for my situation?
Planning to build a small fleet, which truck to start with?
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I just picked up a Volvo VNL760 on lease purchase. 2021. My co-driver and I quit our company driver jobs and started a one truck company with intentions of purchasing more trucks after we familiarize ourselves with this side of the industry.
This Volvo is extremely comfortable, every aspect of it is tuned to provide the driver who has to live in it with comfort. I've driven Internationals years 16-20, and a 2020 Freightliner. The Liner was nice, but didn't compare to the Volvo.
As for fuel, we are 7000 miles in on the truck. I didn't know things like brand new tires provide up to 7% lower fuel mileage than after they are broken in with 30-50k miles. There are so many little things.
We governed the truck at 70mph. Hauled a mix of things so far but two runs across West Virginia Turnpike killed our fuel mileage. A 2000 mile trip we just finished tonight averaged 7.5 the whole way, our overall for 7000 miles is 7.0mpg.
We use RTS fuel card.
RTS is 75 bucks for a one time fee, gives you a fuel card with a $1,500 limit for fuel per truck (team trucks 3k limit).
The app shows you all the locations for discounts. I've managed to average right around $2.00/gallon so far. Had an expensive fill up in Chicago when I got the truck at 2.38/gal, but fueling in Missouri and Nebraska lately I have managed $1.87-1.98g at a few locations with huge discounts on the app.
Be prepared for stupid expenses. My week 1:
Finishing my 2nd trip on the truck, I heard air hissing extremely fast while doing 70mph. I got to the shoulder as my brakes locked. The air lines and ABS line underneath my trailer were gone. Nothing was in the road and no damage to the cab or undercarriage, so some animal I assume ran under my trailer and ripped all my lines out. $500 repair and I'm currently running illegal with no trailer ABS line.
2 days later I do a pretrip and see a drive tire off the rim. I get it to bead and inflate, and as I'm checking it out I see it has a metal spike in it. Couldn't be patched, $757 for a brand new tire because the trucks brand new, gotta match the tire sizes.
Yesterday morning my truck derated to 5mph for a DEF issue. Volvo has remote support and diagnosis so I called and they read me what the code says. I got to a dealership before it actually derated me (gave me 60 mins at full speed and 180 at a reduced). A splash guard was installed wrong and flapped over to cut some wires to my DEF doser. Warranty covered it, up and running by 11am, but I arrived at 7am Sunday and was down 24hrs, costing me a potential 3k in earnings.
I'll post my week 1 numbers shortly.Last edited by a moderator: Dec 1, 2020
Reason for edit: Edited out referral
Our other expenses are going to total around $2,700 as its the first week of the month when the monthly payments are due (extra $1,000). Tolls are also not factored in right now.
For the east coast you'll need EZ Pass. Call their hotline and advise them you want a commercial vehicle ezpass. They'll take a deposit (minimum $25) explain the rules and ship it out. Said it could take 2 weeks.
You'll need tire chains if you're going anywhere West. I ordered mine online. Colorado requires you to have 7, 6 on the wheels plus a spare. But they come in sets of two and who's counting? 3 sets of chains, 6 total chains, ordered online based off tire size: $491.
Theres special permits for a few states, I know you need a permit to enter Oregon.
I pay myself and my co-driver .76cpm split down the middle for all miles the truck moves. This is a very good pay rate, however we are worth it in our ability to handle all aspects of the job regardless of issues or new situations arising.
I put .02cpm into a maintenance account. This was determined before business began, and we are reevaluating an increase to .03 or .04cpm. Have had bad luck the first week as I explained.
My company I'm leasing from charges 12%, so we get 88% of the line haul. My numbers are all factored based on actual income, varied mpg, and varied fuel cost based on averages at the beginning of the loads.
Fuel costs were actually 1392 for the week, however factor in an occasional wrong turn or missed exit, a bit of idling,, plus I still have half a tank of fuel left beginning the next week, the costs are within an acceptable variable range.
Tried to shoot you as much as I could think of that I've learned being new to the owning a company side of things. Heads up: team drivers are nearly 2x more profitable for the same truck and insurance payments.
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Kenworth, Kenworth, Kenworth,,all trucks are about the same today, at least with KW, you get a good dealer network, and the driver will be happy. Also, a better resale. Volvos are NOT crappy trucks, mechanically, they are all the same, it's just I'd take a 20 year old KWhopper anyday over a 20 year old Volvo. Electrical gremlins on older Freightliners and Volvos will drive you nuts.
A lot of red flags with the idea.
first don’t worry about the model of what truck you are going to use, they are ALL THE SAME!
If you buy new, then spec it to what niche you are going after. If you buy used, then go through your due diligence to buy it.
don’t worry about equipment like chains or oil, there is a lot more to learn and you have time to buy what you need.
after years of owning a lot of trucks, I picked two product lines to keep my maintenance cost lower and because a lot of purchases are easier (better deals). I have a bunch of other makes and models, like w9 and so on, all are just junk to me.
You worry about how you plan managing of the company, never depend on a driver for any management of the company unless they managed their own company and that is rare. Drivers come and go, very few will stick to a new company, this is a very mobile (no pun intended) industry. Trying to depend on someone who drives is not bright.
I would start with this, getting a cdl and getting on the road first as an employee, then as a lease operator with a company like landstar, this gives you the foundation you need.
Second is this industry may see a serious contraction in the future with the new administration that hates truck drivers and the industry, I see it as a problem after a few years of improving conditions, but that’s political nature of the government.
also think financing, cash sounds great but you are running a business and if you do it right, you come out ahead. One thing that people like you don’t realize is you pay your drivers first, no matter what and that takes cash reserves, cheap pos owners pay as they go and this is why they have the junk on the road, too cheap.
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