What happens to you guys during a recession?

Discussion in 'Ask An Owner Operator' started by Driver Eight, Jan 11, 2020.

  1. Driver Eight

    Driver Eight Light Load Member

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    Who survives? I’m assuming there is a rate depression, but how bad, worse than 2018-19? Sorry, it’s Friday night. Beers. Just that the prevailing thought is that after a record 10 year economy expansion, what goes up must come down. During a recession it makes having paid for equipment appear at a premium to the outside observer. So I’ll have to avoid financing and pay in full, which is a lot of risk with your savings. The main curiosity is about recessions, how much hey do or not resemble the recent rates depression. 2008 was an historic event, hopefully we don’t cycle through anything like that again. But there is a lot of debt out there.
     
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  2. olddog_newtricks

    olddog_newtricks Medium Load Member

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    Those who do no save enough to make it through the hard times go out of business . And you are correct about the massive amount of debt out there. 2019 has been a pretty bad year for spot market rates. Those who don't have decent paying direct customers are hit the hardest. Let's hope the rates improve and we all make it.
     
  3. starmac

    starmac Road Train Member

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    It generally speeds up the weeding out process a little for those that stay on the verge of folding or put all their eggs in one basket anyway.

    Every so often trucking just goes to the devil, recession or not, it can be caused by several things.
     
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  4. Doealex

    Doealex Medium Load Member

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    But there is a lot of debt out there.

    Debt is not an issue if the asset prices and income levels don’t decrease significantly (debt to asset, debt to income ratios). Of course, this is assuming that liabilities didn’t change.
    Supposedly government put a mechanism to stress test the banks periodically after the last recession. Banks supposed to check companies before issuing new loans.
    PS. Didn’t help but notice that unlike during last recession most truck/auto manufacturers laying off employees now before they have to add more liability to pay higher wages as a result of recent union strikes.
     
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  5. D.Tibbitt

    D.Tibbitt Road Train Member

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    Hammer down n keep making money. People still have to eat and need a place to live , recession or not. Somebodys gotta bring all that stuff. It may force out some smaller companies and tighten the market , but freight is still moving like always. I guess at which price is the question. I wasnt in trucking in 2008 so idk what it was like then
     
  6. Midnightrider909

    Midnightrider909 Road Train Member

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    I haul arms and ammo. America will never stop feeding the military industrial complex. I will be among the last to go out of business.
     
  7. lastgoodusername

    lastgoodusername Medium Load Member

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    You do your best to insulate yourself from the downs by building good relationships while things are up.Working just to work is a recipe for disaster. I have never looked for a customer. I am always on the outlook for a relationship. They are totally different as each has a different mindset. One will bear out, most times, and the other will play out at the first change of wind direction. Paying for my own fuel since 1990. Consider this free advice and worth every penny.
     
  8. Rubber duck kw

    Rubber duck kw Road Train Member

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    If you think 2019 was bad you're not going to survive a real recession, last year was barely a slow down.
     
  9. Midwest Trucker

    Midwest Trucker Road Train Member

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    The economy and trucking don’t always go hand in hand from my experience. There has been slow economic periods where trucking is booming and great economic times when trucking rates are low like 2019. It’s all about the amount of trucks on the roads vs the amount of freight available. Supply vs demand.
    Basically though you have to hustle hard in all times, the good times even more. Many guys take more time off when rates are great, then work hard when rates are bad only to still go out of business. I think the ability to save and control your costs is what’ll keep you in business long term.
     
  10. blairandgretchen

    blairandgretchen Road Train Member

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    Paid for equipment certainly helps in tough times, but we should all still be tucking back funds for the inevitable replacement or repair of equipment.

    Unless you’re say, 5 years out from retirement and plan on wearing everything out until you park it.

    We keep a ‘maintenance fund’ and a separate ‘equipment upgrade fund’.
     
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