Starting a trucking COMPANY worth it?

and a lot of those chromed out trucks went into foreclosure as well.....chrome, stainless steel, mean nothing...

how one operates a business means everything.

a buddy of mine has always said, "in trucking, it takes a lot of money, to make a little money"

you claim you know of an o/o who did well....?? how do you really know...?? was all that chrome an indication to you he did well...???

all that chrome tells me is that he spends his money foolishly, when he could have been perhaps getting better health benefits, maybe an APU unit, maybe another truck, maybe a bigger warehouse...maybe buying newer trailers or expanding into a different aspect of hauling....you know, "re-invest" back into the company, instead of buying fancy doo-dads for the truck, which mean nothing in the resale value of the truck...??

like the others have said, go to school, get a business degree, even if only an Associates degree, go to trucking school, then get a job and drive for about 2 to 5 years, all the while learning and saving your money, then maybe, buy into an established company where the owner is retiring, or open up your own business.....to go in "cold turkey" is a recipe for disaster.

 

I don't know how much it cost's down there, but up here is cost us $1057.00 to get our running authority, and with that you can run as many trucks as you want

 

You are right about that, spending that kind of money on chrome and fancy stuff is foolish, and is not an indication of wealth, it just means he is spending all his money on crap.

In my experience with having drivers, there is no point in putting anything nice or shiny on a truck because they will only break it, they will smash fancy bumpers, and they do not care about your equipment the same way you do. You could have someone who is the best driver in the world but he will never take care of your truck the same way you do.

That is why we do not let our drivers drive any of our long nosed trucks anymore, because they could not stop smashing bumpers and hitting stuff. Our drivers have very plain Cascadia's, they don't seem to have a problem driving the sloped nosed trucks. We spend money on things the drivers need like inverters, and auxillary heaters, they appreciate these things more than chrome.

 

Buddy of mine works for a Construction Company as a Foreman. His job is the oversee the Logistics, Repair, and operation of all Trucks and Heavy Equipment on the site.

The way the Construction Company is designed, is it works through the Unions of each Trade for employees, trucks, etc. They pay the cost to pay Journeymen and Apprentices, and the foreman wages.

Only "Permanent" employees they have are the Engineer and Architect Teams, and the accountants. Otherwise, they are all hired out through the Unions to do the job. Because they are unionized like that, when the job is done, or doesn't require as many Apprentices/Journeymen, they cut back. Go on the list, and then rehire Journeymen and Apprentices as needed for the next job, etc. However long the jobs are.

Buddy's been working For the same guys going on 5 years straight. The Company he works for through the Union is actually spending LESS on Apprentices/Journeyman than non-Union or No longer Union counterparts.

As far as Trucking, depending how far you may be going. Might actually want to look into the Teamsters for Drivers. Journeyman Teamsters have Hazmat Endorsements, Tanker Endorsments, Double/Triple Trailor endorsements etc. by Journeyman level.

May prove cheaper in regards to employment wise. Construction Company's like the one my friend works through, saves hundreds of thousands yearly by pulling guys in through the Unions.

 

If you start up your own business, get in line with a Diesel/Equipment Repairman. (Cheaper if you go through a shot run by the IUOE or Teamsters)

If you get 2-8 trucks a Repair Team contracted for weekend work would do wonders in maintaining your trucks. (Doing general checks and services for preventive maintence, etc)

Going through a non-Union shop, would mean paying a min of $22 per hour, per Mechanic on the team in the Shop. Vs a Journeyman and Apprentice Wage set up. (Services would be more expensive for non-union).

Doing repairs on weekends etc. when your drivers (since it's most likely a small company for a while) are on weekend leave would save time, and money for things that come up. Regardless if you contract out with a union/non union repair shop.

Even if you start out as an O/O, working a maintenance contract with a repair shop may save quite a bit of money in the long-run if you set it up right.

Talking with my buddy for a while, he explained to me the best way to cut costs, is to either contract with a place, or hire your own Repair Team. (Usually 2 or more Mechanics, 2 at the minimum, because truck maintenance requires two people to safely do the work) Unless you have older trucks, or only have 7 or less trucks, better off contracting out for weekend service checks etc. Unless your trucks are going to be heavily used.

Also, he said to get customer bases set up PRIOR to constructing your business. (include it into your business plan) Be sure to calculate what kind of work will be done, what stuff you plan on transporting, etc. (To plan type of trucks, and trailors accordingly to save money, and add-on types of trailers as-needed based on demands of customers. I.e. if you got loggin company's wanting truck drivers to haul their stuff, might want to look into a log trailer, etc.)

Another way to cut costs: Provide your own training. First Aide/CPR + AED Certs for each Driver, etc. (That also cuts costs on insurance) OSHA 10, Sending Drivers based on need of customers to get their Forklift Certs. (They are your employees who're investing in the company as is, and the more you invest in them, the more your company benefits based on demand of those certs/quals) This is all based on the idea you go for non-Teamsters. If you go for Teamster Union Drivers (Apprentices/Journeymen) they'll already have funding/training through the Union to get the above certs.

Another way to cut costs, is to get fueling contracts/negotiated deals with a fueling company. (corporate, or individual gas station) That's a good way to cut costs on fuel.

Another way to cut costs per my friend, would be to finance for FUNCTIONAL components of a vehicle. Keep your drivers comfortable, but focus on function. Not looks or anything like that. Get a part-time car washer as well. Can be a kid in HS or whatever. But make sure you keep your vehicles washed/clean throughout the week. It prevents debris/dirt from getting into parts of the truck if the outside is routinely cleaned. Including trailors.

And he said the BEST way to save money, is to MAKE your drivers NOT get tickets. Biggest expenses for his company trucker wise, are tickets. accidently going over their max load by 0.25 of a pound, is an overweight ticket. rule of thumb, keep weights 10lbs at the MOST under the max weight. And give incentives for X miles/hours for NOT getting a ticket, NOT speeding, etc. etc.

The second biggest expense, is repair and maintenance. preventive Maintence for the company he works for, is the second greatest thing in keeping costs down.

 

I believe that everyone should have a back up plan. You don't need a business degree to run any company, however there are things that you can learn while studying for your degree that will be beneficial to you no matter what you decide to do. Another thing a degree will do for you is afford you options that a non degree person may not have available to them. For instance, let's say that you do get a truck and authority and fail. Many do fail. You can either get a driving job, providing you have kept your MVR and CSA clean. You may also be able to go to work for a larger trucking company and move up the corporate ladder. You may also decide that trucking is not for you. A degree will open doors for you.

The more experience you have and the cleaner your MVR the lower your insurance premiums. You are likely to need to spend at least $6,000-8,000 for your first year insurance premiums. You don't necessarily have to front all that money. Most will finance your premiums with about 20-30% down. HUT costs $550, authority $300. There are other costs, but those are the major ones associated with getting your authority.

Many people come into this business with misperceptions. While it sounds great to go out and get your authority and start your own trucking company, there is much more to it than driving a truck. You could probably run your authority without any experience, but your chances of failure are much greater than if you take this step by step. Drive a company truck for a while. I would suggest at least 2 years, more would be better. With 2 years experience you can get a break on insurance. With experience you will learn more about what you are doing. You won't learn how to run a company by driving a truck, but you can learn how your employer handles certain issues, such as breakdowns, etc.,

You can start on a shoestring. As long as everything goes well you can survive. Unfortunately, that isn't the way things usually work in life. It is always good to prepare for the worst scenario when you come into any new business. Having a good nest egg can keep you in business. You should be able to have enough to do any major repair before you start. A minimum of $10-20,000 would be best. That will take care of an engine overhaul. That will be your most expensive item. If you don't have the money then you need to have a line of credit or other means to get your truck repaired should that happen. Breakdowns happen in this business, no matter how new the equipment.

If you want to be successful in this business start with an inexpensive no frills truck that is in good shape. There will be time for the hood and chrome later. Buy those once you start making money and can pay cash for them. When people are young, we often have tunnel vision. We want what we want now. We don't want to take it step by step. Unless you prepare for your new venture you will likely have difficulties. There will be ups and downs. All businesses have cycles, trucking is no different. You might be able to swing buying the hood and chrome, but it isn't good business sense. You could often buy 2 good used plain jane trucks for what you would pay for one Pete or KW. The plain trucks will make you more money because you will spend less to purchase them. You will also spend more money on fuel with a hood. A no frills or plain jane truck doesn't have to be ugly or worn out. You can find a good truck that looks decent for much less than a hood with all the chrome. Remember, this is a business.

 

Great information everyone I log in everyday to read this thread lol learning alot

 

Good points,

Best thing to do is lock the trucks down, anytime you give a driver an ungoverend truck they will always have the foot to the floor. Fuel is one of your biggest expenses, you can't afford to waste it. Remember it is not their truck or their fuel, they don't care about wearing out your truck or wasting your fuel.

We have a GPS unit in our trucks so we can track them, and we can see exactly how fast the trucks are moving. The guys always have the pedal to the floor even though they say that they don't, good thing they can do about 62 mph.

 

If you aren't wise to how to run a business, you will fail. Doesn't matter what type of business it is. Also, you must have a drive that aims for success and doesn't waiver. Owning a business and truely having it turn to a success takes a daily devotion well before day one. Learn all you can BEFORE you go for a loan or buy the first truck because mistakes once you start can cost you big time.

Last, understand that you would be entering a pool that contains many big fish and you will be chum. The big fish make the rules. Also, the government is the game warden and they are there to protect the big fish.

 

A small operation can be profitable. You don't have some of the discounts available on such things as fuel as a large carrier, but you can act quickly to rapidly changing markets. The larger the company the less flexible in meeting those changes. Large companies are like government. The larger they become the less efficient.