How Do You Figure Reefer Payback?
- Thread starter ATeam
- Start date
Let's not get too far from common sense in answering the original question, "How do you figure reefer payback?" For every variable offered that supports an arguement against reefers, another can be offered that supports the arguement for reefers.
I'm seeking an agreed-upon formula that can be used AS A STARTING POINT to answer the above question. Because so many variables exist and may or may not come into play depending on other variables, it is difficult to be 100% certain regarding reefers. But if we can provide a common sense approach, based on solid assumptions, we might be able to get to 80% or 90% certainty, and be helpful to those who are considering reefer purchases of their own.
This morning, I have been calling some of the vendors that advertise on EO and sell expediter trucks. This is to get from them the price differential between brand new dry box and comperable reefer straight trucks. I intend to create a hypothetical but realistic truck that we all can use for purposes of this discussion. I hope we can avoid getting bogged down with variables and side issues, and instead stay focused on producing, if we can, a reefer payback formula.
I'm seeking an agreed-upon formula that can be used AS A STARTING POINT to answer the above question. Because so many variables exist and may or may not come into play depending on other variables, it is difficult to be 100% certain regarding reefers. But if we can provide a common sense approach, based on solid assumptions, we might be able to get to 80% or 90% certainty, and be helpful to those who are considering reefer purchases of their own.
This morning, I have been calling some of the vendors that advertise on EO and sell expediter trucks. This is to get from them the price differential between brand new dry box and comperable reefer straight trucks. I intend to create a hypothetical but realistic truck that we all can use for purposes of this discussion. I hope we can avoid getting bogged down with variables and side issues, and instead stay focused on producing, if we can, a reefer payback formula.
You will only get essentially the original cost basis. That is why we looked at the way we did to get ALL of the numbers to compare, rather than part of them. The aid of an accountant was helpful as well to look at the differences over a period of time.
Like you, we couldn't get a fix on our investments without going down this path.
I will agree that different setups affect the return in many ways, but they do have to be factored in. We tried to look at it with the comparison field between units as equal as possible.
Davekc
owner
22 years
PantherII
EO moderator
Like you, we couldn't get a fix on our investments without going down this path.
I will agree that different setups affect the return in many ways, but they do have to be factored in. We tried to look at it with the comparison field between units as equal as possible.
Davekc
owner
22 years
PantherII
EO moderator
Some numbers are more clear than others. It is relatively easy to determine the extra insurance cost a reefer adds to a truck. It is less easy to determine what impact, if any, the extra weight of a reefer will have on the truck's overall operating expenses.
Let's focus on the easy numbers. Expenses include:
1. The cost of the reefer (installed).
2. The additional cost of the reefer body (vs. dry box).
3. The extra insurance cost a reefer adds to the truck.
4. Reefer maintenance costs.
5. Cost of downtime and deadhead for reefer maintenance.
6. Reefer fuel cost (1/2 gallon per hour?).
7. The cost of reefer extended warranty (if purchased)
8. Cost of deadhead and downtime for T-Val certification (if applicable).
9. The data logging system for T-Val (if applicable).
10. Reefer depreciation.
11. Other (Am I leaving anything obvious out?)
Reefer revenue includes....
I'm open to suggestions on that one.
Let's focus on the easy numbers. Expenses include:
1. The cost of the reefer (installed).
2. The additional cost of the reefer body (vs. dry box).
3. The extra insurance cost a reefer adds to the truck.
4. Reefer maintenance costs.
5. Cost of downtime and deadhead for reefer maintenance.
6. Reefer fuel cost (1/2 gallon per hour?).
7. The cost of reefer extended warranty (if purchased)
8. Cost of deadhead and downtime for T-Val certification (if applicable).
9. The data logging system for T-Val (if applicable).
10. Reefer depreciation.
11. Other (Am I leaving anything obvious out?)
Reefer revenue includes....
I'm open to suggestions on that one.
greg334
Veteran Expediter
I think that revenue is based on the business model of the owner operator or a combination of the owner and driver.
Also Deadhead to and from a location for PM and Tval would be hard to pin down for a couple reasons; one is CPM of the truck per the business model and the other reason is the equipment that is on the truck, Carrier opposed to thermo-king - not all service centers will do all servicing or tval.
Maybe I am wrong?
Also Deadhead to and from a location for PM and Tval would be hard to pin down for a couple reasons; one is CPM of the truck per the business model and the other reason is the equipment that is on the truck, Carrier opposed to thermo-king - not all service centers will do all servicing or tval.
Maybe I am wrong?
I've never had a reefer, never contemplated having a reefer, and have no reefer purchase nor operating experience; my beer fridge doesn't count.
Having read the above posts, it seems to me that a missing variable is that of the layover reefer truck either waiting by choice or carrier locked for reefer freight. A three day wait as recently reported in another thread, may have produced one or more dry box loads. So, what's the average time awaiting reefer loads vs time awaiting dry box loads? What is the average lost revenue during the wait.
Having read the above posts, it seems to me that a missing variable is that of the layover reefer truck either waiting by choice or carrier locked for reefer freight. A three day wait as recently reported in another thread, may have produced one or more dry box loads. So, what's the average time awaiting reefer loads vs time awaiting dry box loads? What is the average lost revenue during the wait.
>I think that revenue is based on the business model of the
>owner operator or a combination of the owner and driver.
I think so too. Three models have been referenced so far.
Given his customer arrangements and service package, Paul56 would not distinguish between reefer and dry freight revenue. For his purposes, the reefer is simply part of the truck. When the truck is paid for, the reefer is paid for. Is that a fair statement, Paul56?
Exp10yrs talks about reefer revenue on a per mile basis. He receives $0.25 per paid mile whether he has reefer or dry freight on board. Using prior years miles as a guide, his reefer revenue is somewhat predictable at $25,000 a year. His reefer revenue is also clearly identifiable. I am presuming this is the Panther model, am I correct?
The FedEx reefer pay is different. Reefer trucks receive a slight bump on the fuel surcharge for all miles on which the surcharge is paid. The difference varies with the price of fuel as shown on the FedEx chart. I think for our purposes in this discussion, it is fair to ball park it as an additional $0.02 per mile for all surcharge-paid miles. Thus in a year where 100,000 surcharge-paid miles were driven, the bump would be $2,000. For 80,000 miles, it would be $1,600. As with Exp10yrs's arrangement, the "bump" money is 100% attributable to the reefer and clearly identifiable.
That then brings us to the more problematic issue of reefer loads that pay a percentage of the load. It is problematic because in many cases, FedEx dry freight loads can pay more than reefer loads. There is no good way I know of to reliably determine on each load what the reefer differential may be.
So let me throw this question to the body. After adjustments are made to include all of the above-listed expenses in the cost of running a reefer truck over a given time frame, is it fair to say that in time frame X, with reefer costs Y, a reefer will pay for itself when revenue from reefer loads plus the surcharge bump equals Y?
In other words, is it fair to say that if you pay $30,000 for a reefer (including reefer body) and say $5,000 in the first year to fuel, maintain, repair, insure, and certify it (plus whatever else may be done to keep it running), the reefer will have paid for itself when revenues from reefer loads combined with the surcharge bump reach $35,000?
Or is it best to do as Paul56 does and simply blend all reefer expenses and revenues into one package and talk in terms of a truck that pays for itself instead of a truck component (reefer) that does?
>Also Deadhead to and from a location for PM and Tval would
>be hard to pin down for a couple reasons; one is CPM of the
>truck per the business model and the other reason is the
>equipment that is on the truck, Carrier opposed to
>thermo-king - not all service centers will do all servicing
>or tval.
>
>Maybe I am wrong?
Deahhead expense will vary with the truck since truck operating expenses vary. But the per-mile number will be known by the truck owner and can be plugged into the calculation as appropriate to that owner.
>owner operator or a combination of the owner and driver.
I think so too. Three models have been referenced so far.
Given his customer arrangements and service package, Paul56 would not distinguish between reefer and dry freight revenue. For his purposes, the reefer is simply part of the truck. When the truck is paid for, the reefer is paid for. Is that a fair statement, Paul56?
Exp10yrs talks about reefer revenue on a per mile basis. He receives $0.25 per paid mile whether he has reefer or dry freight on board. Using prior years miles as a guide, his reefer revenue is somewhat predictable at $25,000 a year. His reefer revenue is also clearly identifiable. I am presuming this is the Panther model, am I correct?
The FedEx reefer pay is different. Reefer trucks receive a slight bump on the fuel surcharge for all miles on which the surcharge is paid. The difference varies with the price of fuel as shown on the FedEx chart. I think for our purposes in this discussion, it is fair to ball park it as an additional $0.02 per mile for all surcharge-paid miles. Thus in a year where 100,000 surcharge-paid miles were driven, the bump would be $2,000. For 80,000 miles, it would be $1,600. As with Exp10yrs's arrangement, the "bump" money is 100% attributable to the reefer and clearly identifiable.
That then brings us to the more problematic issue of reefer loads that pay a percentage of the load. It is problematic because in many cases, FedEx dry freight loads can pay more than reefer loads. There is no good way I know of to reliably determine on each load what the reefer differential may be.
So let me throw this question to the body. After adjustments are made to include all of the above-listed expenses in the cost of running a reefer truck over a given time frame, is it fair to say that in time frame X, with reefer costs Y, a reefer will pay for itself when revenue from reefer loads plus the surcharge bump equals Y?
In other words, is it fair to say that if you pay $30,000 for a reefer (including reefer body) and say $5,000 in the first year to fuel, maintain, repair, insure, and certify it (plus whatever else may be done to keep it running), the reefer will have paid for itself when revenues from reefer loads combined with the surcharge bump reach $35,000?
Or is it best to do as Paul56 does and simply blend all reefer expenses and revenues into one package and talk in terms of a truck that pays for itself instead of a truck component (reefer) that does?
>Also Deadhead to and from a location for PM and Tval would
>be hard to pin down for a couple reasons; one is CPM of the
>truck per the business model and the other reason is the
>equipment that is on the truck, Carrier opposed to
>thermo-king - not all service centers will do all servicing
>or tval.
>
>Maybe I am wrong?
Deahhead expense will vary with the truck since truck operating expenses vary. But the per-mile number will be known by the truck owner and can be plugged into the calculation as appropriate to that owner.
>I've never had a reefer, never contemplated having a reefer,
>and have no reefer purchase nor operating experience; my
>beer fridge doesn't count.
>
>Having read the above posts, it seems to me that a missing
>variable is that of the layover reefer truck either waiting
>by choice or carrier locked for reefer freight. A three day
>wait as recently reported in another thread, may have
>produced one or more dry box loads. So, what's the average
>time awaiting reefer loads vs time awaiting dry box loads?
>What is the average lost revenue during the wait.
Perhaps other reefer owners can chime in here with their experience. I've never known anyone to wait for reefer freight when fair-priced dry freight is available to haul. Regarding the White Glove lock where FedEx may lock a truck out of certain loads because the reefer truck may be needed for a WG reefer load at a later date, it falls to the truck owner to be smart in managing the WG lock. The lock can be removed at any time upon driver request. We view the lock as a good thing and leave it on most of the time. It keeps us from having to say no to cheap load offers and thereby makes it easier to maintain a good acceptance. But if a certain amount of time passes with no load offer, we will tell FedEx to remove the lock if they are not at the moment working a specific load for us.
My sense from other reefer owners is that a reefer gets you loads you otherwise would not have. In other words, the reefer helps get you moving when you might otherwise sit.
>and have no reefer purchase nor operating experience; my
>beer fridge doesn't count.
>
>Having read the above posts, it seems to me that a missing
>variable is that of the layover reefer truck either waiting
>by choice or carrier locked for reefer freight. A three day
>wait as recently reported in another thread, may have
>produced one or more dry box loads. So, what's the average
>time awaiting reefer loads vs time awaiting dry box loads?
>What is the average lost revenue during the wait.
Perhaps other reefer owners can chime in here with their experience. I've never known anyone to wait for reefer freight when fair-priced dry freight is available to haul. Regarding the White Glove lock where FedEx may lock a truck out of certain loads because the reefer truck may be needed for a WG reefer load at a later date, it falls to the truck owner to be smart in managing the WG lock. The lock can be removed at any time upon driver request. We view the lock as a good thing and leave it on most of the time. It keeps us from having to say no to cheap load offers and thereby makes it easier to maintain a good acceptance. But if a certain amount of time passes with no load offer, we will tell FedEx to remove the lock if they are not at the moment working a specific load for us.
My sense from other reefer owners is that a reefer gets you loads you otherwise would not have. In other words, the reefer helps get you moving when you might otherwise sit.
Something else to contemplate is your personal stress level. Many reefer loads are dispatched in the heart of winter in order to keep thecargo warm. Some people including myself like to take it easy in the winter. I did not want the stress that comes along when you load in Cleveland and it's 5 degrees out then drive all night to Minneapolis where it's 5 below. So while it's a personal decision as too where and when you run the cost and maintenance of the reefer should be factored into your own life style.
Then there is always the problem that your carrier can lose some key accounts for any number of reasons and your reefer freight could dry up. No one has a crystal ball in this business. Right now Fedex National Ltl (Watkins) is pushing reefer freight. Will it affect Custom Critical,I would think so.
Then there is always the problem that your carrier can lose some key accounts for any number of reasons and your reefer freight could dry up. No one has a crystal ball in this business. Right now Fedex National Ltl (Watkins) is pushing reefer freight. Will it affect Custom Critical,I would think so.
Broompilot
Veteran Expediter
Terry has a great point! In answering the post (which I enjoy doing) I look at as how the general Expediter could benefit from our discussions and not just those who know or think they they know. I probably fall into the (think they know).
What I do know is from my past business and purchasing equipment, the easier I kept things the easier life was. Now that business took a speciality tool for every job and something to haul it from location to location in and I had to recoup my investment. 1.5 was the # that always worked, some pieces of equipment returned 10 times there revenue in a year (walk behind floor scrubbers with the capticity to leave a floor clean, and dry) These machines were my bread and butter, grocery stores, warehouses, and auto dealerships it could do it all. Now my looser was carpet cleaning equipment barley 1.5 and labor intense.
The single biggest item I see being overlooked here is WHAT IS YOUR LABOR WORTH? Expediters get out here buy a truck and FORGET that your time is $, we are away from home for weeks on end and yet many forget the value of time. One cannot recoup a day EVER, once its gone its gone. Thus to answer your question, there is alot more responsiblty taken on with the cost of the refere, and I feel the figure you asked is the bare min of acceptance with repair, down time, and YOUR TIME.
People reading this, you may find me wrong and thats fine with me if you have more knowledge or different point of view. From my business background every machine meant hours of my week to baby it which = time, and time is $.
In seeing the extra work that the refere will demand, it makes me reflect on how good I have it with my set up and company. They call I decide, write PU info go PU load, call in every 4 hours deliver, call in POD, wait for next load. It is so simple my only responsibilty is the Truck, an APU, myself when I am out here. Oh yeah the paperwork which is very little unless I want to create charts graphs etc...KISS method.
For some they enjoy being everything for everyone,I find that to difficult to do and very few appriciate ones efforts in doing so. If you can justify it and its profitable for one if this is the road you choose than I wish you luck. I do one thing and do it to the best of my ability which I explained in the above paragraph.
What I do know is from my past business and purchasing equipment, the easier I kept things the easier life was. Now that business took a speciality tool for every job and something to haul it from location to location in and I had to recoup my investment. 1.5 was the # that always worked, some pieces of equipment returned 10 times there revenue in a year (walk behind floor scrubbers with the capticity to leave a floor clean, and dry) These machines were my bread and butter, grocery stores, warehouses, and auto dealerships it could do it all. Now my looser was carpet cleaning equipment barley 1.5 and labor intense.
The single biggest item I see being overlooked here is WHAT IS YOUR LABOR WORTH? Expediters get out here buy a truck and FORGET that your time is $, we are away from home for weeks on end and yet many forget the value of time. One cannot recoup a day EVER, once its gone its gone. Thus to answer your question, there is alot more responsiblty taken on with the cost of the refere, and I feel the figure you asked is the bare min of acceptance with repair, down time, and YOUR TIME.
People reading this, you may find me wrong and thats fine with me if you have more knowledge or different point of view. From my business background every machine meant hours of my week to baby it which = time, and time is $.
In seeing the extra work that the refere will demand, it makes me reflect on how good I have it with my set up and company. They call I decide, write PU info go PU load, call in every 4 hours deliver, call in POD, wait for next load. It is so simple my only responsibilty is the Truck, an APU, myself when I am out here. Oh yeah the paperwork which is very little unless I want to create charts graphs etc...KISS method.
For some they enjoy being everything for everyone,I find that to difficult to do and very few appriciate ones efforts in doing so. If you can justify it and its profitable for one if this is the road you choose than I wish you luck. I do one thing and do it to the best of my ability which I explained in the above paragraph.
Here's some additonal numbers to toss into the mix. This is for one truck only (ours). We'd need to compare a number of trucks for this to be a reliable indicator. Nevertheless, the numbers do provide food for thought.
We've now completed 40 runs in our new truck since June 15, 2006. Ten of those, or 25% were reefer runs. Our total gross revenue to the truck in that time was $XX,XXX. 41% of that was from the 10 reefer runs.
We just completed two back-to-back, coast-to-coast reefer runs that gave us our best week ever in three years with FedEx. If we eliminate those two, the numbers change to 38 runs. Eight of those, or 21% were reefer runs. Our total gross revenue to the truck in that time (minus two runs) was $XX.XXXX. 34% of that was from the 8 reefer runs.
Thus, in our case at least, the percentage of revenue from reefer runs is higher than the percentage of reefer runs completed. In other words, reefer runs pay significantly better than dry box runs. In terms of staying busy, we believe our reefer has kept us running more than a dry box would.
If we include the two most-recent runs, our reefer earned back it's purchase price in four months. Because it is brand new, maintenance costs are minimal at this point. Looking further ahead to when the reefer will age and become more expensive to operate, there is no way reefer operating costs will go so high as to negate the reefer revenue numbers. Indeed, if things keep going as they are, we could throw away a reefer once a year, replace it with a new one and still be money ahead.
People considering these numbers should be very careful to note that there is more to getting reefer loads than simply hanging a reefer on your truck and getting in with FedEx. Our liftgate, freight-handling equpment and security clearances are also a factor as some reefer loads require one or all of these. Run strategy is a huge factor, as is the fact that we are almost always on the road. Having a reefer on your truck is by no means a free ride.
We've now completed 40 runs in our new truck since June 15, 2006. Ten of those, or 25% were reefer runs. Our total gross revenue to the truck in that time was $XX,XXX. 41% of that was from the 10 reefer runs.
We just completed two back-to-back, coast-to-coast reefer runs that gave us our best week ever in three years with FedEx. If we eliminate those two, the numbers change to 38 runs. Eight of those, or 21% were reefer runs. Our total gross revenue to the truck in that time (minus two runs) was $XX.XXXX. 34% of that was from the 8 reefer runs.
Thus, in our case at least, the percentage of revenue from reefer runs is higher than the percentage of reefer runs completed. In other words, reefer runs pay significantly better than dry box runs. In terms of staying busy, we believe our reefer has kept us running more than a dry box would.
If we include the two most-recent runs, our reefer earned back it's purchase price in four months. Because it is brand new, maintenance costs are minimal at this point. Looking further ahead to when the reefer will age and become more expensive to operate, there is no way reefer operating costs will go so high as to negate the reefer revenue numbers. Indeed, if things keep going as they are, we could throw away a reefer once a year, replace it with a new one and still be money ahead.
People considering these numbers should be very careful to note that there is more to getting reefer loads than simply hanging a reefer on your truck and getting in with FedEx. Our liftgate, freight-handling equpment and security clearances are also a factor as some reefer loads require one or all of these. Run strategy is a huge factor, as is the fact that we are almost always on the road. Having a reefer on your truck is by no means a free ride.
One has to make sure they aren't looking through rose colored glasses. There are two questions.
The first being whether a reefer will pay for itself. And the second, is it a better investment than a dry van.
Those are two different issues.
If it was to be that rosie picture, every one would have one. That is not the case.
I think Terry is alittle closer to reality with regards to a lock on a vehicle.
There are posts galore in the archive to how that has worked.
Looking at a bigger picture would tell me to look at the numbers. I know my numbers from several years ago are accurate. It is further supported today by going to EO classifieds and seeing huge numbers of TVAL and reefer owners looking for drivers. There is many more reefer owners looking for drivers than dry vans. To add to that, there are many more dry vans than reefers.
My opinion is you can make money with a reefer, but I don't see any numbers over a period of time that supports it as a more profitable business investment.
Also, if it was profitable enough for folks to replace the reefer every year, many would do it. Again.....it doesn't happen. Not even after numerous years.
I do have to wonder about only 10 loads a month? If that was keeping you busier, I would hate to see the run count from a dry van.
Davekc
owner
22 years
PantherII
EO moderator
The first being whether a reefer will pay for itself. And the second, is it a better investment than a dry van.
Those are two different issues.
If it was to be that rosie picture, every one would have one. That is not the case.
I think Terry is alittle closer to reality with regards to a lock on a vehicle.
There are posts galore in the archive to how that has worked.
Looking at a bigger picture would tell me to look at the numbers. I know my numbers from several years ago are accurate. It is further supported today by going to EO classifieds and seeing huge numbers of TVAL and reefer owners looking for drivers. There is many more reefer owners looking for drivers than dry vans. To add to that, there are many more dry vans than reefers.
My opinion is you can make money with a reefer, but I don't see any numbers over a period of time that supports it as a more profitable business investment.
Also, if it was profitable enough for folks to replace the reefer every year, many would do it. Again.....it doesn't happen. Not even after numerous years.
I do have to wonder about only 10 loads a month? If that was keeping you busier, I would hate to see the run count from a dry van.
Davekc
owner
22 years
PantherII
EO moderator
Broompilot
Veteran Expediter
Why do you ask for MODELS? Real #s tell the truth Models are maybee's or maybee nots. Dave never spoke of Models but Facts from his past expierence.
What your asking I think has turned into what cannot be answered or is that what your looking for? Know one seems to be able to give you the answer wether it is question or a debate? Many things in business have to be just done, some can be duplicated but it aint gona work for everyone the same way.
What your asking I think has turned into what cannot be answered or is that what your looking for? Know one seems to be able to give you the answer wether it is question or a debate? Many things in business have to be just done, some can be duplicated but it aint gona work for everyone the same way.
>Some numbers are more clear than others. It is relatively
>easy to determine the extra insurance cost a reefer adds to
>a truck. It is less easy to determine what impact, if any,
>the extra weight of a reefer will have on the truck's
>overall operating expenses.
>
>Let's focus on the easy numbers. Expenses include:
>
>1. The cost of the reefer (installed).
>2. The additional cost of the reefer body (vs. dry box).
>3. The extra insurance cost a reefer adds to the truck.
>4. Reefer maintenance costs.
>5. Cost of downtime and deadhead for reefer maintenance.
>6. Reefer fuel cost (1/2 gallon per hour?).
>7. The cost of reefer extended warranty (if purchased)
>8. Cost of deadhead and downtime for T-Val certification (if
>applicable).
>9. The data logging system for T-Val (if applicable).
>10. Reefer depreciation.
>11. Other (Am I leaving anything obvious out?)
>
>Reefer revenue includes....
>
>I'm open to suggestions on that one.
You have left out the additional weight involved with a reefer unit.
In another post in this thread you mentioned about the weight of the reefer itself and felt that would have minimal impact upon fuel mileage, but obviously when in operation the reefer does consume fuel.
As well, there is more than simply the weight of the reefer unit itself to consider as someone else already pointed out.
There is a relationship between energy and weight. The more weight moved, the more energy consumed. With a reefer equipped truck this affects ALL miles.
For us, we would not have a reefer if we did not have reefer loads or were interested in going after customers with those types of loads. Reefer typically implies keeping loads cold, but in our case most of our reefer loads involve keeping the load from freezing due to running in areas where it is not unusual for the temperatures to drop down to 50 - 60 degrees F below zero. I'm certain there are operators out there with their own authority who do not have reefers because they are not interested in providing that service.
>easy to determine the extra insurance cost a reefer adds to
>a truck. It is less easy to determine what impact, if any,
>the extra weight of a reefer will have on the truck's
>overall operating expenses.
>
>Let's focus on the easy numbers. Expenses include:
>
>1. The cost of the reefer (installed).
>2. The additional cost of the reefer body (vs. dry box).
>3. The extra insurance cost a reefer adds to the truck.
>4. Reefer maintenance costs.
>5. Cost of downtime and deadhead for reefer maintenance.
>6. Reefer fuel cost (1/2 gallon per hour?).
>7. The cost of reefer extended warranty (if purchased)
>8. Cost of deadhead and downtime for T-Val certification (if
>applicable).
>9. The data logging system for T-Val (if applicable).
>10. Reefer depreciation.
>11. Other (Am I leaving anything obvious out?)
>
>Reefer revenue includes....
>
>I'm open to suggestions on that one.
You have left out the additional weight involved with a reefer unit.
In another post in this thread you mentioned about the weight of the reefer itself and felt that would have minimal impact upon fuel mileage, but obviously when in operation the reefer does consume fuel.
As well, there is more than simply the weight of the reefer unit itself to consider as someone else already pointed out.
There is a relationship between energy and weight. The more weight moved, the more energy consumed. With a reefer equipped truck this affects ALL miles.
For us, we would not have a reefer if we did not have reefer loads or were interested in going after customers with those types of loads. Reefer typically implies keeping loads cold, but in our case most of our reefer loads involve keeping the load from freezing due to running in areas where it is not unusual for the temperatures to drop down to 50 - 60 degrees F below zero. I'm certain there are operators out there with their own authority who do not have reefers because they are not interested in providing that service.
greg334
Veteran Expediter
Not to be insulting to anyone but my accountant is laughing.
I too want to get into a bigger truck, maybe with a reefer, maybe with a lift gate but going through all this stuff does not seem productive and can lead to a real big stess headache. I made my decision not based on anything other than potental and maximizing the potental the best I can.
It may be productive and useful for Phil to go through all of this, in which I hope he comes up with his models to justify his purchase but I may be wrong of my thoughts that this formula is based soley on FedEx experiences.
As my accoutant said - Real numbers/stats matter in each case, not $xxxx.xx. The thing is as he pointed out - there is a seperation of each person, owner or company that is trying to justify the additional cost in obtaining and operating specialized equipment and each situaiton is unique to that person, owner or company where no real model can be created.
His words, not mine.
I too want to get into a bigger truck, maybe with a reefer, maybe with a lift gate but going through all this stuff does not seem productive and can lead to a real big stess headache. I made my decision not based on anything other than potental and maximizing the potental the best I can.
It may be productive and useful for Phil to go through all of this, in which I hope he comes up with his models to justify his purchase but I may be wrong of my thoughts that this formula is based soley on FedEx experiences.
As my accoutant said - Real numbers/stats matter in each case, not $xxxx.xx. The thing is as he pointed out - there is a seperation of each person, owner or company that is trying to justify the additional cost in obtaining and operating specialized equipment and each situaiton is unique to that person, owner or company where no real model can be created.
His words, not mine.
mrgoodtude
Not a Member
Thank's Greg and Broom,
You beat me to the punch.
This post has become ponderous.
Mike
You beat me to the punch.
This post has become ponderous.
Mike
Gregg said;
Not to be insulting to anyone but my accountant is laughing.
===============================
I have a very good suspicion that he was looking at many of the same things that ours reviewed.
I am sure manufacturers and finance companies have looked at this pretty close as well. That is why you don't see any, or very few, ever sitting on a dealers lot that are new.
I think there are some opportunities, but it would be limited to a used truck purchased at the right price.
I do agree....I think this topic has come full circle again.
Davekc
owner
22 years
PantherII
EO moderator
Not to be insulting to anyone but my accountant is laughing.
===============================
I have a very good suspicion that he was looking at many of the same things that ours reviewed.
I am sure manufacturers and finance companies have looked at this pretty close as well. That is why you don't see any, or very few, ever sitting on a dealers lot that are new.
I think there are some opportunities, but it would be limited to a used truck purchased at the right price.
I do agree....I think this topic has come full circle again.
Davekc
owner
22 years
PantherII
EO moderator
On another note for this subject. I purchased a truck from the classifieds here on 21 sep 06. Double bunk Condo, Generator, liftgate for 14K. This morning I delivered in Boston and the truck was paid for during this run. Now, my time wasn't worth anything during this month, but, imagine what I have to look forward to concerning the value of my time. Payback is short, if, you don't need a TAJ.
>Some numbers are more clear than others. It is relatively
>easy to determine the extra insurance cost a reefer adds to
>a truck. It is less easy to determine what impact, if any,
>the extra weight of a reefer will have on the truck's
>overall operating expenses.
>
>Let's focus on the easy numbers. Expenses include:
>
>1. The cost of the reefer (installed).
>2. The additional cost of the reefer body (vs. dry box).
>3. The extra insurance cost a reefer adds to the truck.
>4. Reefer maintenance costs.
>5. Cost of downtime and deadhead for reefer maintenance.
>6. Reefer fuel cost (1/2 gallon per hour?).
>7. The cost of reefer extended warranty (if purchased)
>8. Cost of deadhead and downtime for T-Val certification (if
>applicable).
>9. The data logging system for T-Val (if applicable).
>10. Reefer depreciation.
>11. Other (Am I leaving anything obvious out?)
I did leave something out, it was an item DaveKC mentioned; reefer financing costs. Those would be easy to determine. Figure out what percentage of the total truck cost the reefer purchase costs represent, then apply that percentage to your truck financing costs.
Updated reefer expense list:
1. The cost of the reefer (installed).
2. The additional cost of the reefer body (vs. dry box).
3. The extra insurance cost a reefer adds to the truck.
4. Reefer maintenance costs.
5. Cost of downtime and deadhead for reefer maintenance.
6. Reefer fuel cost (1/2 gallon per hour?).
7. The cost of reefer extended warranty (if purchased)
8. Cost of deadhead and downtime for T-Val certification (if
applicable).
9. The data logging system for T-Val (if applicable).
10. Reefer depreciation.
11. Finance costs attributable to the reefer purchase
12. Other (Am I leaving anything obvious out?)
>easy to determine the extra insurance cost a reefer adds to
>a truck. It is less easy to determine what impact, if any,
>the extra weight of a reefer will have on the truck's
>overall operating expenses.
>
>Let's focus on the easy numbers. Expenses include:
>
>1. The cost of the reefer (installed).
>2. The additional cost of the reefer body (vs. dry box).
>3. The extra insurance cost a reefer adds to the truck.
>4. Reefer maintenance costs.
>5. Cost of downtime and deadhead for reefer maintenance.
>6. Reefer fuel cost (1/2 gallon per hour?).
>7. The cost of reefer extended warranty (if purchased)
>8. Cost of deadhead and downtime for T-Val certification (if
>applicable).
>9. The data logging system for T-Val (if applicable).
>10. Reefer depreciation.
>11. Other (Am I leaving anything obvious out?)
I did leave something out, it was an item DaveKC mentioned; reefer financing costs. Those would be easy to determine. Figure out what percentage of the total truck cost the reefer purchase costs represent, then apply that percentage to your truck financing costs.
Updated reefer expense list:
1. The cost of the reefer (installed).
2. The additional cost of the reefer body (vs. dry box).
3. The extra insurance cost a reefer adds to the truck.
4. Reefer maintenance costs.
5. Cost of downtime and deadhead for reefer maintenance.
6. Reefer fuel cost (1/2 gallon per hour?).
7. The cost of reefer extended warranty (if purchased)
8. Cost of deadhead and downtime for T-Val certification (if
applicable).
9. The data logging system for T-Val (if applicable).
10. Reefer depreciation.
11. Finance costs attributable to the reefer purchase
12. Other (Am I leaving anything obvious out?)
>Why do you ask for MODELS? Real #s tell the truth Models
>are maybee's or maybee nots. Dave never spoke of Models but
>Facts from his past expierence.
Dave offers real numbers from past experience. I offer real numbers from current experience. It is my sincere hope that readers find all the numbers to be informative and valuable. For years I have been frustrated by the all-too-general nature of the ongoing reefer debate. I'm now happy to see more details coming out as we continue to run this dog around the park.
>What your asking I think has turned into what cannot be
>answered or is that what your looking for? Know one seems
>to be able to give you the answer wether it is question or a
>debate? Many things in business have to be just done, some
>can be duplicated but it aint gona work for everyone the
>same way.
Actually, I think we are making good progress. It is not a model I am looking for; it is a formula that reefer owners can use to determine reefer payback. With a formula, any reefer owner can plug his or her real numbers into it and see the result. The discussion has been helpful so far. Contributions from others have raised items to consider that I had not previously considered. I believe the question I raised can indeed be answered, and as this discussion continues it is coming into focus.
>are maybee's or maybee nots. Dave never spoke of Models but
>Facts from his past expierence.
Dave offers real numbers from past experience. I offer real numbers from current experience. It is my sincere hope that readers find all the numbers to be informative and valuable. For years I have been frustrated by the all-too-general nature of the ongoing reefer debate. I'm now happy to see more details coming out as we continue to run this dog around the park.
>What your asking I think has turned into what cannot be
>answered or is that what your looking for? Know one seems
>to be able to give you the answer wether it is question or a
>debate? Many things in business have to be just done, some
>can be duplicated but it aint gona work for everyone the
>same way.
Actually, I think we are making good progress. It is not a model I am looking for; it is a formula that reefer owners can use to determine reefer payback. With a formula, any reefer owner can plug his or her real numbers into it and see the result. The discussion has been helpful so far. Contributions from others have raised items to consider that I had not previously considered. I believe the question I raised can indeed be answered, and as this discussion continues it is coming into focus.