Fleet owner observation

[Tennesseahawk]

The post was hinted towards my remark about owners watching tv while drivers work.

I agree with Dave totally, but only as it pertains to him. He is the EXCEPTION to the casual owner. Dave treats his title as a full-time job. And I'm sure he does as much, if not more brainwork, than his drivers.

Having said that, I will not pull away from my statement, as the majority of owners, I believe, let their drivers do their thing so they can collect a paycheck. With the exception of answering a few calls, making a few calls, and cutting checks, there is little else I've seen owners do. In fact, the last owner I worked for didn't even do that on a consistant basis. That's why I don't care for owners who get into buying fleets when they have NO experience in trucking, let alone expediting.

Dabulzman... Dave does not post to be self-grandizing. He does so for a reason. And this time, it was to put me in my place. Dave has the experience most of us would dream of having. And the best of us in the business call him for advice.

 

[ATeam]

It is important for expediter wannabees to realize there is more than one fleet owner business model. Some fleet owners run just a few trucks on a variety of compensation arrangements. There are a few that run a much larger number of trucks.

Like drivers, fleet owners get into the business for a variety of reasons. Some of those reasons make good business sense, and some do not. Fleet owner levels of business skills and intellect vary as well.

Entering the business by running a fleet owner's truck is often recommended here in the Open Forum. Still, fleet owner horror stories are legion and the fleet owner choice should not be lightly made. Even the so-called "good" fleet owners have former drivers that have negative stories to tell about them, and some of those stories are true.

It is an interesting phenomonon in this business that the same fleet owner can be held in high regard by one successful driver or team and be held in very low regard by another.

 

[highway star]

It sounds like Dablusman has a classic case of class envy. If someone doesn't want to deal with "the Man", the solution is simple. Buy your own truck. Can't swing that? Do something else. We all guide our own destiny. If you're with a bad owner, find another. Dave's not the only good one out there.

That was a good post, Dave. If you feel like you need to post it again in a couple of years, by all means, go for it. So, go ahead and fire up a big, fat coheba, pour yourself a shot of lavishly expensive scotch and put your feet up while your trucks generate revenue. You've earned it. Most of the class envy types don't appreciate what it takes to be successful.

 

[ds1450]

Dave, you are an exception. Sounds like you and your drivers have a good understanding. I have sold all of my trucks and have gone back to driving for an owner and we have a good relationship. He trusts me to run the truck on a profitable basis and Lord willing, most times I do that. I don't agree 100% on your pay scale but as long as your drivers are happy and not sitting around, it's a moot point. I can count on 2 hands the reputable owners out here that I have run into but have lost count of all of the shady ones. Keep up the good posts.

 

[TSexpediter]

I'd say let's talk 'trillions'. If words can't hit you, maybe numbers can.

2007 actual numbers:
- total revenue $94K
- contractor exp (driver remuneration) $56K
- other expenses $24K
- auto purchase $30K
- net profit/(loss) ($16K)

So I ended up paying $16K out of my pocket and my driver made $56K - $15K (FSC + BM which DO cover the gas according to driver's calculation) = $41K.
Even if I don't calculate the cost of the vehicles (cause I won't have this expense next year) I would have made $14K.
But I guess I'm a BAD owner.

So if these numbers don't make you a good owner, WHAT DOES?

The owner will ALWAYS make less than the driver. But has the liberty of having another sourse of income. Or run a fleet. I assume drivers would be happy if the owner would make less that the entire fleet...

One more thing. If you've been an owner once, and had to sell all yout vehicles to become a driver once again, can you still complain about how much money the owners make. Something doesn't make sense to me...

 

[davekc]

I will try to answer parts of certain posts to clarify the purpose of why I thought my personal observation was warranted.
I felt it was necessary based on some recent posts to clear some of the misconceptions of what a fleet owner actually does. "Self serving"? Absolutely, if it brings a different prospective to members then I certainly benefit.
The wife and I have been very successful in expediting as well as other projects outside of the industry. The purpose of the post was hardly a reason for me to garner sympathy for fleet owners. Only a understanding.
A post that implies owners are "making trillions" is an indication of the lack of knowledge, thus another reason for the post.

My personal observation is that there are as many bad drivers, as there probably are bad owners. The only difference is the owner is an easier target. But, that goes with the territory as drivers tend to be more transient.
For every bad story about a fleet owner, I would imagine the owners could post about the drivers. But, it is a working partnership, with different levels of investment and risk.
If "they both go down", those risks are not proportionate.

With regards to profit margins on 2000 miles, that is something to consider IF that is the average one is operating at. Our averages are above that so our margins are different. We are running straight team trucks only, with regards to expediting.
I am assuming you are running solos at that average? If so, the HOS is a major issue working against your revenue.

On TSexpediters post, you are indicating a loss, but if you generate revenue over the life of the vehicle, then you may or may not be in the red. Also, income and vehicle depreciation starts to come into play as well. I could go on, but that is another post.

 

[jaminjim]

You don't mean ROI, do you. Sorry I just had to say that.

 

[dabluzman1]

I guess stating the obvious is a common place thing here in EOland.
As to my "trillions" comment, the reason it was in quotes was to be facetious as the amount
of money being made. Wheeeeeoooo i hope that cleared the air there.
But the comments about us and them are not class envy or even penis evny on my part, just another true statement about how "owners" are looked upon as being rich capitalist.
Having been an owner in another industry I too was subjected to, "oh man he must make a lot of money he owns his own company" mentality.
No-one outside of the circle sees all the preparation, sweat, commitment and time required to have a business, let alone a profitable one.
Yet, those that cant or wont step into the owner arena do look upon those in it as being a golden child, lucky, fortunes son however you want to say it.
Sorry for the over simplification but it was needed. this peon is just curious, there very well
not be another peon in expediting, as for me i will always be one, all the way to the bank.
Class envy is for those who need there position in life to mean something.
Just to simplify/clarify once again, i am here with my wife as we decided when and where we want to retire while making some great money on someones dime (truck).
we are short timers no doubt, so i have the advantage of being a little obtuse in my comments as we use expediting to cap off an already successful life.
The original post wasnt an insult to davekc, but a question why a man with his obvious success and experience would even feel the need to clarify the position of fleet owner,
when fleet owners are the minority that the majority will never aspire to nor really understand no matter how many times dave repeats his post.
sorry for the over simplifications again.

 

[davekc]

You don't mean ROI, do you. Sorry I just had to say that.

Shhh......I read somewhere that it doesn't exist

 

[jaminjim]

Dave does not need anyone to speak for him, as his reputation speaks for itself. But I think Dave posted that for the same reason that he makes other posts, and that is to help, and educate the masses who come here looking for information, assistance, and help.

 

[dabluzman1]

"For every bad story about a fleet owner, I would imagine the owners could post about the drivers. But, it is a working partnership, with different levels of investment and risk.
If "they both go down", those risks are not proportionate."


I see we are playing forum tag.
The family that lives on a budget of $50,000.00/year vs a family that lives on $250,000.00 or
in fleet owners cases one trillion dollars a year all lose everything if they crash and burn.
everything is everything no matter your station in life, it is just as devastating.
now in the case of success, it should be pointed out that the rewards are not proportionate
either.

 

[ATeam]

You don't mean ROI, do you. Sorry I just had to say that.

Shhh......I read somewhere that it doesn't exist

Until someone can explain with a straightforward formula how to calculate ROI, it remains a meaningless concept and it might as well not exist. What good is ROI if no one can tell readers how to calculate it?

 

[Vinnie T]

With regards to profit margins on 2000 miles, that is something to consider IF that is the average one is operating at. Our averages are above that so our margins are different. We are running straight team trucks only, with regards to expediting.
I am assuming you are running solos at that average? If so, the HOS is a major issue working against your revenue.

Str8 teams

Ok I ca see how that may work better. Base rate is what 1.25 per mile? That puts you around .50-.55 per mile to the truck. I can see where you can make a living if you had multiple trucks...you must be very busy recruiting!

 

[davekc]

The original post wasnt an insult to davekc, but a question why a man with his obvious success and experience would even feel the need to clarify the position of fleet owner,
when fleet owners are the minority that the majority will never aspire to nor really understand no matter how many times dave repeats his post.
sorry for the over simplifications again.


Don't worry, I didn't take it as a insult. But........i do disagree with your observation. I give drivers much more credit than what you eluded. I think in that "majority" many do have a understanding once they see ALL of the picture. Liken it to dispatchers and drivers. There is a new found respect when one fills the shoes of the other.
At some point in time it may be of value to repeat a thread of this nature. I am confident that a portion of the "majority" will become educated and thrive with that knowledge.

Vinnie......as far as recruiting, not looking for any drivers at this time. Hey it is expediting! Could always change

 

[highway star]

The family that lives on a budget of $50,000.00/year vs a family that lives on $250,000.00 or
in fleet owners cases one trillion dollars a year all lose everything if they crash and burn.
everything is everything no matter your station in life, it is just as devastating.
now in the case of success, it should be pointed out that the rewards are not proportionate
either.

The only way everyone would lose everything in a failed expediting endeavor is if they put everything at risk. The rich folk you speak of would probably pay cash for the trucks and in the event of failure would sell the trucks and get out. There's no one that comes and takes everything you have because you didn't make it in expediting.

Rewards are not proportionate? What's the proper proportion? And why is that proportion the proper one?

 

[dabluzman1]

In my experience, employees are more concerned with payday and weekends (time off) than
a better understanding of the job, in the "big picture".
Some may like or even want to know more about what you do as an owner but the vast majority just want you to do, whatever it is, good enough to make sure the settlement is in their hands when it is suppose to be.
this is a common element that is prevalent in all of the work forces in this country.
i believe the bemoaning of poor drivers or lack of good drivers, posted in EOland, just goes to support the statement.

I guess this is one of those " we agree to disagree" things.

 

[dabluzman1]

The only way everyone would lose everything in a failed expediting endeavor is if they put everything at risk. The rich folk you speak of would probably pay cash for the trucks and in the event of failure would sell the trucks and get out. There's no one that comes and takes everything you have because you didn't make it in expediting.

Rewards are not proportionate? What's the proper proportion? And why is that proportion the proper one?

Hi highway star,
in the nth condition of ultimate lose would be a bankruptcy. In my example that is what i was implying. a total devastating lose just lands everybody back to ground zero, no matter how far the fall.
i guess i can ask the same question, what is the proper proportion of risk? why is it the proper one?
circle question are cute but, in the end, bottom line and your business plan define the "proper one". for each that is a unique and personal scenario.

 

[DannyD]

Dave,

I liked the post except for one lil part. The part where ya apologized for it being so long. By all means take the time to fully express your thoughts. In some cases people are reading your posts quite possibly to make a career decision. I'm sure they'd be fine reading one more (or 2 or what have ya) pages if ya have valuable information to share.

So I'd say the more information the better. I personally enjoy long posts from people over the 1 sentence things everytime. Make it a book. It's not like people are reading this while driving. They're probably reading it while sitting & have a fair amount of time.

Sooooooo, if ya wouldn't mind editing it could ya fill in that other page ya said ya could write? I found this to be quite interesting & would like to get your full thoughts rather than the condensed version.

Be well,
Danny

 

[greg334]

Until someone can explain with a straightforward formula how to calculate ROI, it remains a meaningless concept and it might as well not exist. What good is ROI if no one can tell readers how to calculate it?

Well Phil what can be said, it seems that you hit upon a discovery that some things that have dogged man for centuries can't be answered.

But really if you are lost in trying to find a definition, maybe start with understanding the definition of LUCK which could lead you down the path to nagging question 'What is that magic formula for ROI?'

You may be surprised that there is and always has been a definition for ROI, maybe you missed it?

It is not that hard of a thing to grasp.....it can be like the definition of Luck...... but I defer any explanation at this point to professionals who can explain things like Luck and ROI and a bunch of others in the context of your situation and suggest others do that.

ROI is not like.... say.... Hamilton–Jacobi equation (if you know what that is) ... but it is much simpler to get......

 

[Vinnie T]

The only way everyone would lose everything in a failed expediting endeavor is if they put everything at risk. The rich folk you speak of would probably pay cash for the trucks and in the event of failure would sell the trucks and get out. There's no one that comes and takes everything you have because you didn't make it in expediting.

Rewards are not proportionate? What's the proper proportion? And why is that proportion the proper one?

Rich folk?
Pay cash for trucks?

Fleet owners..even the largest ones with 50+ units are not "rich" folks by any means! Some may do better then others, but I assure you even the biggest most successful fleet owners do not make riches from just leasing out thier trucks alone!