Vehicle Hauling, new and looking to expand capacity

Discussion in 'Experienced Truckers' Advice' started by TurningLeafAutomotive, Sep 13, 2019.

  1. TurningLeafAutomotive

    TurningLeafAutomotive Bobtail Member

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    Hey all,
    So I own a small towing company and the past three months I've been running a rollback tow truck to move vehicles across the VA/NC/SC states. I stay under 26k and am exempt from all the ELD rules, so no CDL needed. I'm not getting rich, but it's better than sitting around for those two to three days a week, and well more than covers gas and maintenance costs.
    I had plans to buy a larger rollback, but still a non-CDL truck, so I could more safely and comfortably haul vehicles, and in the next few months put someone in that truck so I wouldn't have to drive. It's not that bad, it's just young kids at home and a wife with a back problem makes me want to be much more flexible with my time, like I was before I started moving cars.

    So I got to thinking maybe a bigger rollback isn't the right way forward since yesterday I got a call from someone looking for work, and that person has a CDL class A license and OTR experience. So it got me to thinking that my vehicle upgrade should be a CDL setup, for the sake of greater revenue per mile. But oh the options!

    1. Dually with a 4 or 5 car trailer.
    Pros: Marginally better gas mileage than a road tractor (8-10mpg?)
    Cons: No sleeping quarters (okay some custom setups have this, yeah)

    2. Class 8 road tractor with a 5-6 car trailer. (Surprisingly affordable compared to many dually trucks)
    Pros: sleeping quarters more common.
    Cons: poorer gas mileage (6-7mpg?)

    3. Car Hauling rig (very unlikely anyone will convince me of going this route, but, well, I'm listening!)
    Pros: capacity!
    Cons: probably don't have the demand to keep the rig full.

    All setups would require ELD, so that is what it is.


    Also, yes I know maintenance matters. I have a fleet maintenance mechanic that works on road tractors and dump trucks that's next door to my office/impound lot, and a fleet maintenance facility right down the road. Both very knowledgeable people who I have relationships with and trust, so there's that.

    Purchase Costs: options 1 and 2 don't seem to be much different, surprisingly.

    What about insurance costs? Is one setup significantly different than the other?

    Maintenance Costs? Between the dually and a road tractor, the trailers won't differ too much. It's more the difference between a dually (I'd go Cummins), and a road tractor (not sure of make).

    I'm sure there's other factors I'm not considering, so educate me if you'd like to help a brother out!

    Thanks!

    Erik
     
  2. FoolsErrand

    FoolsErrand Road Train Member

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    Make a call to your insurance company and get a quote on 48 state interstate insurance with 1 million liability, 100k cargo and coverage on an unknown driver on a new MC#. If you can stomach the premium they quote, we can then discuss ifta, irp, HUT, drug programs, hours of service, driver pay abd so forth.

    Maybe its a good move for you if youre in the right position to buy good equipment cheap and have a hearty savings account to start it. If you dont LOVE regulations and filings and compliance, interstate trucking will be a disaster compared to local rollback.

    Id suggest dumptruck instead of OTR if you dont want the compliance headaches.
     
    starmac Thanks this.
  3. TurningLeafAutomotive

    TurningLeafAutomotive Bobtail Member

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    I've got a call to discuss quotes (yearly renewal) with my insurance broker this upcoming week. and I plan to bring this up as well.

    I can run a rollback within a 150 mile radius, as long as it returns to dispatching location every day and not need a CDL. So maybe that's considered 'local'. It's basically what I'm doing.

    I don't LOVE regulations. Who does? Can you elaborate?
     
  4. snowwy

    snowwy Road Train Member

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    Does cdl have anything to do with eld?

    Or is it the weight?

    How does the 150 miles work? I know AG gets 150 miles. Everyone else gets 100.
     
  5. HillbillyDeluxeTruck

    HillbillyDeluxeTruck Road Train Member

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    I know the towing business. Your insurance cost doesnt even come close to commercial trucking insurance and actual car hauling coverage.

    2nd you will have to get your own operating authority. While this is easy, the compliance that you have to do is not.

    3rd hiring a driver and buying equipment for him to run is not a small venture. Thats a whole lot of outlay of $ to give someone a job.


    And if your running a tow truck and you're not busy almost 24/7, then Id say you have plenty of expansion capability right there. There are so many ways to get different contracts. Local & state gov agencies, motor clubs, insurance co's, etc. Theres also the repo side. Then there's the medium and heavy duty side towing commercial vehicles and doing recovery.
     
  6. TurningLeafAutomotive

    TurningLeafAutomotive Bobtail Member

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    I have a DOT # and MC authority, so good there. But not being or needing CDL removes basically all of the compliance headaches, yes.

    I have insurance to cover me going no more than 500 miles from my dispatching location. $100k on hook, 1M general liability. Adding car hauling coverage (with the above mileage limit) didn't increase my premiums by more than $2.5k, and me doing this part time for a few months has well cleared that in profits. Maybe true OTR makes insurance go through the roof. I'll ask my agent.

    My local towing operation is a one-man driver/manager situation, with me as the owner. It's busy 24/7 as we have five police rotations and a few good businesses we work with. It's how I bought it and don't intend to fire my employee so I can do everything. Many reasons why that won't work.

    Done the motor club approach and it's pretty poor pay; doesn't make sense for me.

    Medium duty towing might be an option. Our impound lot doesn't have space for bigger trucks, so as long as it's disablement to repair shop that's reasonable. I'll look more into that.

    Thanks!
     
  7. FoolsErrand

    FoolsErrand Road Train Member

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    Well for starters i think your current operation is running on luck. I think state lines extinguish your air miles thing there .. Im not certain but look into it.

    VA troopers can be some serious sticklers and youre running interstate for profit. I dont think that is exempt and even if it is, as soon as a trooper puts pen to pad and scribbles "driving out of class" you have a felony problem. I was genuinely exempt by the definition on page 1 of NY's then current manual, moving my own shop stuff on a 2ton and got an out of service and driving out of class that cost me 3 grand when the dust settled. And no it didnt get cleared up in court, i had to plea bargain. I commend you trying to make a living and i dont want to see that happen to you, it really messed up my whole life for quite a while. As far as needing a CDL or not. 9 troopers might let you go. 1 says thats engaged in commerce, its commercial here is your ticket. Now you need a lawyer, whether he is right or wrong youve been charged.

    So to put a for hire truck across state lines like youre considering, youll need a DOT number and MC number.. These are cheap. But you cant get them without the insurance policy and base plates [irp] ..first year new MC, figure $15-20k insurance premium first year, plus $2000 base plates, plus $550 or so heavy use tax per truck. The annual expenses cost more than a starter truck. Insurance probably wont quote you for just a few states. If you leave your base state hauling general property theyll want you to have 48 state policy to cover their butts.

    The whole thing is outrageously expensive and youre probably more profitable staying in your own jurisdiction.

    See if you can get into local shed, container and machinery moves to make [and actually keep] more money. Some rollers, rigging tanks, steel sheets and a rollback can do really well. A bobcat with forks will double the options. Add in a dually and a gooseneck dump and you have a home every day odd jobs/cleanup type operation. I know tons of people doing very well in this type of stuff.
     
  8. FoolsErrand

    FoolsErrand Road Train Member

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    i posted while you were typing.. Your dot/mc number changes a lot of things for the better so disregard most of my post. The rest i will stick with about expansion. Scrap, cleanouts, sheds, tree trunk and dead campers hauled off for the "we buy houses" crowd can pay very well very fast if you are prepared to do anything necessary.
     
  9. TurningLeafAutomotive

    TurningLeafAutomotive Bobtail Member

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    Below is taken from superdispatch.com

    Short haul (also known as the Time Card Exemption or the 100 air mile exemption): When a commercial driver operates within a 100 or 150 air mile radius. (CDL required drivers have a maximum of 100 air miles while NON-CDL required drivers have a 150 air mile maximum.) In addition to this requirement, the driver must meet a few more:
    – Start and return to same location during operating time
    • Drive no more than 11 hours
    • Have ten consecutive hours off between shifts
    • Operate no more than 12 hour days

    FAQ: What are air miles?

    Think of air miles in flight terms: Air miles are the straight line from Point A to Point B, as opposed to the literal distance it would take someone to travel from Point A to Point B.

    E.g. Houston to Austin, TX is about 165 miles in road miles, whereas it is only 145 in air miles.

    How do I calculate air miles?

    Here is a handy air mile calculator that you can use to estimate.

    What if I occasionally exceed the 12 hour rule or other parameters of the exemption?

    That’s okay – FMCSA knows that short haul drivers do not drive short distances all the time. If you do not exceed these parameters more than 8 out of every 30 days then you are still exempt. 30 days means every 30 day period, not every month (i.e. May 15 – June 15 is a 30 day period.)

    How do I record my drive time on days I exceed the exemption?

    As long as you don’t exceed the exemption for 8 out of 30 days, you must record your

    What is a time record and how is it different from RODS?

    A time record is a simpler version of a RODS. It is not an official legal document and can be recorded in any format. These are the elements a time record (or “time card”) should have:

    (A) The time the driver reports for duty each day;

    (B) The total number of hours the driver is on duty each day;

    (C) The time the driver is released from duty each day; and

    (D) The total time for the preceding 7 days in accordance with 395.8(j)(2) for drivers used for the first time or intermittently.



    So, no ELD for me, no mention of state lines (I know a trooper on a bad day can make my life hell, regardless of complaince or not), and no RODS.
     
  10. HillbillyDeluxeTruck

    HillbillyDeluxeTruck Road Train Member

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    Okay I see where you're authorized for interstate and car hauling and tow away, so thats good.

    I think you need to have a good talk with your insurance agent on going into the multi-car hauling business. Make sure you have the right coverages for this.

    If you're running multistate right now, how do you handle your fuel tax? I think you're really skirting under the radar because of the rollback truck. Most officers dont look at them like they do larger cmv's.

    What are your plans for getting the freight (3+ cars) at a time to keep the trailer filled and the truck/driver moving?
     
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