Question about Owning a few trucks.

Income $1.70 per mile for all miles
3000 miles at 6mpg with $4 fuel = .66cpm
Driver pay at .39cpm
.02 cpm for tires
.02 cpm for oil changes
.15 cpm other maintenance
.21 cpm truck replacement
.01 cpm tags/permits
.02 cpm insurance

You have $1.48 with this small list for expenses, factor in all the taxes, work comp, etc. and you are not making anything, in fact you would be in the negative.

 

Bingo.Great Post.

And people wonder why i stay home alot and WILL NEVER haul less than 2.25 a mile AND under 20,000 lbs.As it sits now i am at 3.50 a mile dedicated and all runs are 7,000 lbs or less..I will ride this horse until the horse breaks his leg.Then it is back to the drawing board.

I am in trucking to make ''profit''.This is not a Non Profit Org..

 

Spartacus, you plainly state you don't a clear picture of how trucking works. I dare say my comment may very well turn out to be the most reasonable comment or response you will receive.

now if you would have said you were buying one truck and going to drive it yourself , my response would have been different.

however under the circumstances you have posted since I made my comment, your chances of success are about 2 per cent at the moment. If you cant figure out why, your chances of success drop to a half percent.


hiring drivers is a crap shoot even under the best of circumstance, and yours is by far the best of circumstance.

you basically posted here looking for verification of your great idea, tell ya what print your original post and my response put it in a safety deposit box, buy the two trucks and hire the drivers, 6 months later, open the safety deposit box , read the your original post and my response, you will then say, I should have listened.


what I bluntly told you was advice for any industry , example would anyone in their right mind go buy a restaurant when they knew nothing of running a restaurant? of course they wouldn't.

what really induced my response to you was your statement that you had been in logistics and involved in hiring companies to transport goods but yet you know nothing of trucking. that alone told me you haven't been paying attention and have just been drawing a paycheck and did nothing extra to learn the business, which may very well entail why you were laid off two ago.

bluntly , you have worked with cargo for 6 years, have been involved with acquiring trucks to haul cargo, but still know nothing about trucking??? seriously , think about this long and hard if what cash you have hand will be used for this venture.

that's good solid advice , it may not be what you want to hear, but its what you need to hear

 

If you are going down this road then start with one truck and see how it goes before getting two. With my .02 I would find another industry to venture into then trucking as the number of variables is far too great and too many are going to be out of your control. The good thing is that paying cash you can go to the auction and get an 07 Columbia for 18-20k - does the company you plan to lease the truck onto plan on going into California? Is the truck all set up for CA rule that will be implemented soon?

The 3000 mile per week guarantee - is that in writing?

As a former owner of an 06 Columbia please see the following thing that broke down in between 500,000 and 750,000 miles:

New Cranks Sensors (2) - $40 Labor - out of this world
A few A/C issues
EGR Cooler - 725,000 miles give or take
Fan Clutch - 725,000 miles give or take
New Clutch - 550,000 miles
New Heater Cores
Radiator
Turbo Actuator
Unloader kit for Air Compressor
Steering box ( reman )
Brakes ( Shoes and Drums )
Brake Cans
Air bag
Tires

While many of these items were expected several were not - especially when in a 4 month period. As others have commented that .65 or so cents is dedicated to fuel, plus idle time fuel as winter is rapidly approaching or an APU. Tack on the .40 that a driver gets plus any taxes, etc...your net is rapidly decreasing. Will you get a PM service every 6 weeks or so at $285 a piece plus any of the above mentioned costs and the 200 or so costs I didnt mention. If you think you can still make a profit then by all means go for it - I think you would have a hard time with it though. Check the TTR for MNDriver and search his posts - he has a great Excel spreadsheet that breaks it all down or if your further inclined there is a great entry level accounting book called: Dude, Where's my profit? that really shows you where it all goes. Good luck with whatever route you choose.

 

Some people ask questions, thinking they already have all the answers. They do not want to listen to those who have already been down the same road. What is fella is proposing to do will probably fail.Most others like him do. Hiring GOOD drivers will be a nightmare, making 3,000 miles EVERY week is a dream, fuel is going up, and he really has little knowledge of trucking. Good recipe for a major headache.

 

Nothing personal, but this is one saying that I really wish people would quit saying, and its not just here that it is said. Every business that I have owned or been involved in has all the same problems that trucking does. I own a construction business as well as a custom tile business along with my one truck operation, and I am looking at acquiring a lawn care business. Go to some forums for all of those, and do some reading, its the same tired worn out line that is repeated in them as well.

Here are the things that these four businesses have in common.
Rising fuel prices, high insurance, rate cutters, hacks, poor business minded people, customers that are difficult to please, parts/materials that continually increase in price, increased equipment costs, customers that pay late or don't pay at all, etc.

I could go on, but what's the point? Every business that I can think of ultimately shares the same effective problems, so to tell someone with a dream and a little spark of entrepreneurship to forget it and look into something else is just wrong.

Instead why not use the knowledge that you/I/we have gained and enlighten people and teach them, then let them decide if this business is something that they want to get into.

Rant over.

 

There is still money to be made in trucking, but it is becoming more and more challenging by the day. When you run by the mile you should understand that most carriers and brokers don't pay actual miles. Some still pay HHG miles. I would count on running 8-15% more miles than you will be paid. You need to know how miles will be calculated. Whether you do power only or have your own trailers, you will do some deadheading. That is a cost which you will need to absorb. I would also not expect to be running 3,000 miles every week. Every segment of this industry has seasonal slowdowns. If this company is typical of others, you may only get as many as 1,800-2,200 during the slow times. I would suggest that you use 2,500 as an average. It will likely be closer to actual for the year. I would also recommend that you inquire as to the amount of deadheading that those currently leased to the carrier are doing and factor that into your costs.

It would be to your benefit if you could start out by buying a single truck and drive it for at least 6-12 months yourself. You never want to start a business without first having some first hand experience in the industry.

 

You never get the miles they say you will. I'd figure $10,000 - $15,000 a year for repairs. Sounds like you don't have much experience so would you drive 3000 miles a week and be away from family in an old truck all week with no benefits ? I highly doubt you will find a driver that can get 3000 miles a week every week - someone or something will definitely hold him up and or he will burn out at that rate fast.

I wouldn't call 700,000 miles low mileage. You should plan for a $12,000 - $15,000 overhaul it the next year or two and no it will not increase the value of the truck dollar for dollar. (I myself would spend more and get one truck with like under 300,000 miles that won't give as much trouble and if it does not work out won't loose much value yet at that mileage.)

The only reason my situation is working is I take nothing from the truck myself when I drive it a 1/3 of the time and my driver runs it during the day full time and home each night.

I would figure a scenario that has a good possibility of happening. 2000-2500 miles per week, 5.5 - 6 mpg, and like above $10 - 15,000 in repairs per truck per year. ( You will never have a bill under $500). 3 weeks per year lost income due to breakdowns and or driver quits until you find another one.

Pay cash all you like but if you don't make any money and your truck will depreciate fast you will loose the cash too.

I'd sure as heck start with one truck first. Keep the cash for the second one as even a truck coming off a lot that gives the impression of being checked over will almost for sure cost you $3000 - $4000 for a few things that didn't show up with its skirt off on the lot and sure will now that you are pulling with it. Some days I wish I had 3 trucks and some days I wish I did not have any.

The new trucks on the road don't gross any more than an old one but big companies (units of scale) get buying discounts from mfg, fuel rebates, insurance rebates etc. These savings is where they can offer insurance, retirement, etc. and with the hope that a new truck with warranty keeps maint. costs low. Getting big is buying power and their suppliers can't afford to not get their business. Whether you stop at their shingle makes no difference.

I have no desire to be big but no matter what the enterprise now days the paper and pencil say it is the only way that it works.

I'm guessing your mind is made up anyway and like a lot of ventures and marriages to be most folks just don't want to believe or take advice from their gut nor people that have been in the same shoes.

My venture makes enough but probably not enough for most. I call it my deductible hobby. I have a full time job and another enterprise on the side as well. The original ones keep feeding the new one.