I'm not looking for political commentary in this thread. The Soapbox forum is for that. This is a business question.
With the election over and results now known, what, if anything, will you do different with your expedite business?
To answer my own question and set the tone for replies:
In the near term, Diane and I (one-truck owner-operators leased to Landstar Expresse America) will do nothing different. We saw a healthy upturn in rates last month and enjoyed the highest gross-revenue month we have had in nine years of expediting. When something like that develops, the sensible thing to do is to keep doing what you are doing; which is stay in service and make hay while the sun shines. The plan is to keep running through Christmas, celebrate the holidays with relatives at home in Minnesota like we always do, and then take a winter break in Florida where we have a vacation home.
Longer term, it appears that we will be forced to put tens of thousands of dollars into our truck (2006 Volvo) to make it and the reefer California compliant. The truck has too many good years and miles left in it to think about trading it in on another. California is too important of a market for us to ignore.
Nothing in the election results suggests that California's requirements will be modified in a favorable way. If we want to continue serving that market (we do), we are left with no choice but to bite the bullet and spend the money to upgrade our truck and reefer.
We will likely replace the entire reefer instead of just upgrading the engine to become California compliant. It makes little sense to put a new engine in an old reefer. We have never had a reefer engine issue. It's the other stuff that goes wrong when something does. While the reefer runs like a top now, and has done so with just a few repairs in its six-year history, a full reefer replacement makes sense because the other stuff is aging.
It also makes sense because the reefer is becoming an increasingly important part of our business, now and in the future. Reefer loads have been infrequent at Landstar in the 16 months we have been here, but when they come, they pay great. Two or three of those loads would pay enough to fund a full reefer replacement. In fact, they already have. Cash from those loads was banked to fund a reefer replacement.
Also, with Landstar gearing up to do more reefer business, more reefer business can be expected. With more reefer business expected, we like the idea of having a brand-new, fully reliable reefer.
The election results did nothing to ease concerns about the coming fiscal cliff. No one knows at this point how that issue will play out in Washington and in the global and U.S. markets. Know one knows how fiscal cliff developments will affect expediting. When faced with that much uncertainty, all we can do is be as flexible as possible and stand prepared to act, one way or another.
We may end up parking the truck and extending our Florida vacation if freight dries up and rates collapse. Or we may cut the vacation short to take advantage of great opportunities that the marketplace may serve up. It is impossible to know at this point but we are prepared either way.
Longer term, we plan to continue as a one-truck, owner-operator, married-couple expediter team as we have for the last nine years. No expansion to a fleet operation is planned. That is not so much a function of the economy and the 2012 election as it is us living our lifestyle of choice.
Longer term still, we continue to save and invest for retirement. The government has already reduced the social security benefits it promised years ago and we expect more cuts in the future. As self-employed expediters, the only health care and retirement benefits we have are what we provide. With social security benefits doubtful in the future, we're on our own when it comes to funding retirement.
The short story is that the government is forcing us to spend tens of thousands of dollars on a truck that needs no repairs, and they are forcing us to pay self-employment taxes while cutting the retirement income benefits those payments were once supposed to provide.
The 2012 election changed none of that so we press on, doing the best we can, and doing everything we can to pass our costs onto the customer by pricing our services as high as possible. Our post election strategy is the same as before; provide premium services, pricing those services as high as the market will bear.
That's my answer, now back to you. With the election over and results now known, what, if anything, will you do different with your expedite business?
With the election over and results now known, what, if anything, will you do different with your expedite business?
To answer my own question and set the tone for replies:
In the near term, Diane and I (one-truck owner-operators leased to Landstar Expresse America) will do nothing different. We saw a healthy upturn in rates last month and enjoyed the highest gross-revenue month we have had in nine years of expediting. When something like that develops, the sensible thing to do is to keep doing what you are doing; which is stay in service and make hay while the sun shines. The plan is to keep running through Christmas, celebrate the holidays with relatives at home in Minnesota like we always do, and then take a winter break in Florida where we have a vacation home.
Longer term, it appears that we will be forced to put tens of thousands of dollars into our truck (2006 Volvo) to make it and the reefer California compliant. The truck has too many good years and miles left in it to think about trading it in on another. California is too important of a market for us to ignore.
Nothing in the election results suggests that California's requirements will be modified in a favorable way. If we want to continue serving that market (we do), we are left with no choice but to bite the bullet and spend the money to upgrade our truck and reefer.
We will likely replace the entire reefer instead of just upgrading the engine to become California compliant. It makes little sense to put a new engine in an old reefer. We have never had a reefer engine issue. It's the other stuff that goes wrong when something does. While the reefer runs like a top now, and has done so with just a few repairs in its six-year history, a full reefer replacement makes sense because the other stuff is aging.
It also makes sense because the reefer is becoming an increasingly important part of our business, now and in the future. Reefer loads have been infrequent at Landstar in the 16 months we have been here, but when they come, they pay great. Two or three of those loads would pay enough to fund a full reefer replacement. In fact, they already have. Cash from those loads was banked to fund a reefer replacement.
Also, with Landstar gearing up to do more reefer business, more reefer business can be expected. With more reefer business expected, we like the idea of having a brand-new, fully reliable reefer.
The election results did nothing to ease concerns about the coming fiscal cliff. No one knows at this point how that issue will play out in Washington and in the global and U.S. markets. Know one knows how fiscal cliff developments will affect expediting. When faced with that much uncertainty, all we can do is be as flexible as possible and stand prepared to act, one way or another.
We may end up parking the truck and extending our Florida vacation if freight dries up and rates collapse. Or we may cut the vacation short to take advantage of great opportunities that the marketplace may serve up. It is impossible to know at this point but we are prepared either way.
Longer term, we plan to continue as a one-truck, owner-operator, married-couple expediter team as we have for the last nine years. No expansion to a fleet operation is planned. That is not so much a function of the economy and the 2012 election as it is us living our lifestyle of choice.
Longer term still, we continue to save and invest for retirement. The government has already reduced the social security benefits it promised years ago and we expect more cuts in the future. As self-employed expediters, the only health care and retirement benefits we have are what we provide. With social security benefits doubtful in the future, we're on our own when it comes to funding retirement.
The short story is that the government is forcing us to spend tens of thousands of dollars on a truck that needs no repairs, and they are forcing us to pay self-employment taxes while cutting the retirement income benefits those payments were once supposed to provide.
The 2012 election changed none of that so we press on, doing the best we can, and doing everything we can to pass our costs onto the customer by pricing our services as high as possible. Our post election strategy is the same as before; provide premium services, pricing those services as high as the market will bear.
That's my answer, now back to you. With the election over and results now known, what, if anything, will you do different with your expedite business?
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