Why do most owner operators fail?

a lot of owner /ops fail because of the driver behind the wheel. he gets a little lazy, and inefficient.

i work it like i am down to my last ten bucks in the world. and thats all aspects of the business, a 2,000 mile week is avg for for me.
i sometimes sit around and check the load board on a state by state basis just to get a feel for rates and amount of freight all across the country. that way if a load is offered, i can quickly decide whether or not to take it, based on rates and reload opportunity i studied the night before.

 

Look, there's such a thing as "variance". That's a poker term, but it applies to trucking as well. And it's related to lack of capital or access to capital.

Like a lot of people I am starting with an older truck and trailer. 05 International had 700,000 miles when I bought it. 04 trailer.

Other people have mentioned knowing your operating costs. Well, it's all fine and good to know your costs are $1.20/mile over time, but that isn't gonna do you a bit of good if you're two months in and you need an engine overhaul.

I mean it's great if you can start with a truck and trailer paid for plus an $80,000 equipment fund, a $20,000 fuel fund, a $10,000 tire fund, a $50,000 repair fund, and a $40,000 operating fund. If you can do that and pay into these funds off of every mile you run, and pay expenses as they come out of these funds, and assuming you do things right, you'll do well. But most of us don't do that, we start out with all our money in our equipment and a little left over for fuel, probably even loaning money for the equipment. I mean we start off on thin ice hoping the major expenses come later rather than sooner. Even if a guy does things right, you can fail if too many expenses come sooner rather than later.

On the flip side of the coin, there are plenty out there that are failing and don't even know it. There's plenty of guys running too cheap, spending half their time wiring and ducttaping their stuff together. I'm not putting these guys down, we all know a few. And it's kind of amazing how they are always able to keep going without spending a penny. They always either have a truck out back to get the part they need off of or know where they can get something for 1/4 the going price. And we also probably all know a few guys who are independently wealthy who have nice, new big shiny trucks who haul grain or gravel locally (I call them 17 mile supertruckers). They aren't succeeding either, just like to cruise around and show off their shiny trucks part-time.

But back to "variance". The idea is that even if you do things right, over the course of time you are going to have good days, weeks, months... and bad days, weeks, months.... Time and fate don't always cooperate and even these bads and goods out in an orderly fashion. I would venture to guess that the vast majority of us would be in pretty bad shape if we had an engine overhaul, a few tire blowouts, and an accident or maybe a bad run of loads that delayed us or you name it in the course of a month or two. And that's what likely happens to a lot of these guys.

 

The above post hit it square on the head, very well put! It's exactly the reality of being an owner operator. Thank you for your post.

 

Not to mention the guys who buy a brand new truck, and just run run run, and have no clue about their costs and expenses. They just keep the wheels turning trying to cover that HUGE truck note. Sure, you don't have repair costs, but you have the cost of downtime while it is in the shop and the difference in the truck payment NEVER justifies the fact you have a warranty.

Many guys also fail because they get into this business having not ever driven before and do not prepare for what it takes to be a driver, such as being gone for a week or two or 4. They get out here, and the wife/family start complaining that your not around, and when that stress plus the stress of owning and operating a truck is laid on you, it's almost impossiable to overcome.

I feel those who really do research, and prepare the best they can, usually do very well. It take sa keen business sense to make it out here, and knowing your costs is a huge part.

My personal story is that i succeeded by pure luck. I had 0 knowledge of what i was doing, I had 0 research and saw what most company drivers do "I can make about the same wages as I do now (company guy) and have a truck paid for" Soon i realized that was not going to be the case, and I got lucky and got a heck of a deal on a used truck at an auction. Then my luck doubled when i got the truck paperwork and history to find out it had a brand new crate motor installed 80k miles prior (it was a ex-Penske truck) and for the next 7 years i drove that truck hard and it never broke down except for an ECM and some brake shoes. If that truck had 1 major failure in the first 2 years, I'd have gone down like a brick because I was not saving a dime and spending it all. I've learned since then, and always do my homework on a situation and try to make sure I prepare the best I can...... but if it wasn't for luck, I'd be turning wrenches instead of sitting on here enjoying a cup of coffee in my own house

 

Could we get some pics of that truck inside/out

 

To Snowy,
I believe most of what you said is misleading, it is true that if you are faster you may get to a customer and get unloaded and re loaded to run again, but that is not where you will make money. Most owner ops that one encounters speeding by you, you will see more than once the same day. They hurry to their next favorite truck-stop and start all over again. Assume 11 hours of running time at 7 mph faster than average will get you 77 miles further down the road at the end of the day.

Three issues arize, they are the following:
1) You have opened yourself up to speeding violation that will affect your driving record, hence insurance and employability
2) You can only log so many miles in a day anyway. So you got to stop your day 45 minutes early.
3) The gigantic problem is your fuel consumption, if you think that your truck is burning the same amount of fuel at 60 as at seventy , the method you are using to gather your fuel mileage data is flawed, or simply your truck is not set up properly for what you are doing, your gearing is all wrong. Have the engine sweet spot set up to correspond to 63 mph and the fuel savings will come.

Our trucks run an average of 3000miles/week and get around 6mpg ( we run light - generally under 20000lbs of cargo ) so 500 gallons at $4.00/gallon = $2000 in fuel.
3000 miles/week @ 4mpg = 750 gallons which @ $4.00/gallon = $ 3000.00

So hurrying just cost you $ 1,000/ week per truck. Hence why MR Schneider has locked his tractors for years.

 

to Cheez ,
You are absolutely right, your perspective is what counts.
I think that you must have a positive outlook , it requires an optimist.

I think luck has a great deal to do with it as well. Unless you have a rich relative or an investor , the 1st expensive problem , be it an accident or a breakdown can easily take you under.
Hopefully by being vigilant , you purchased good reliable equipment from the onset. You also have a reliable garage carrying out your service and preventive maintenance if you are not qualified to do so yourself.
I also think that it would be difficult to make it in this line of work if you do not have good mechanical skills or understanding, I do not mean a mechanic but an understanding.

 

I think your right Alex. I am not a good mechanic. I can repair/replace small things like lights mudflaps, fuses. Replaced a few hoses and things to keep me rolling. I can't do any major repairs but I have been driving long enough now that I do know what's going on with my truck. I can't fix it but I know what to tell the mechanics the problems are. I'm good at tracing down leaks and those odd noises before they leave you on the side of the road. I bet there are not to many drivers that can repair much on these new trucks.

 

This is where my background has also saved me thousands over the years. i was a diesel tech for Peterbilt before I started driving trucks, so repairs are not an issue for me at all. I already have the $10,000's dollar in tools and the knowledge, and the place to work on it. But one major breakdown out on the road in BFE would have put a big hurting on me.

I know it is very, very tough for drivers with limited time, but taking any kind of basic maintence course, or even just spending a saturday at your companies shop giving a hand can go a long way down the road. Sometimes just basic knowledge can save you a tow bill or even an hour or two of roadside rates.