I'm looking to start a small fleet 2 Semi trucks. I been hearing alot this isn't the time to get in too the truck business with fuel prices. I'm also not looking to drive the trucks,I would be hiring team drivers.What is your opinion on the situation? Not a good time or theres still money to be made.
Is it a good time to get in to the business?
- Thread starter noffas
- Start date
Not much info on your background in this business, but, it all depends on how much you are willing to pay for a good education. I wouldn't worry about the cost of fuel, all you have to do is whine for more fsc. Your immediate concern should be to start looking for a couple "good" teams before you make your purchase. That might stop you before you get started. Otherwise, it's as good a time to get in as any other. I'd say.
PalletJack
Expert Expediter
If you have a couple of older tractors (5+ years) You might find a few expedite carriers that would sign you on. Trouble is, finding a team of drivers that will already know this business and stay with you until you could figure out the way to run a business and keep your drivers happy. If you have a couple of new trucks you might be able to entice some experienced drivers away from an owner with the 5+ year old trucks. If you are not a driver of your own tractor, you will have a very hard time learning the best way to be profitable as an expedite carrier. If you are inexperienced in trucking, business management, truck maintenance and driver recruitment, you will be back on the forum complaining how you got screwed by you carrier or your drivers or your repair shop or the DOT inspector.
Tennesseahawk
Veteran Expediter
Amen, Jack!
arkjarhead
Veteran Expediter
I don't know that much about running a trucking business, so maybe I shouldn't throw in my 2 cents. It seems to me maybe you could make some money if you could buy 2 new trucks with cash and then have more cash to operate on. The only thing is buying those 2 new trucks is cost you somewhere between 200,000 and 250,000. Then you add in money to operate on and your looking at about 300 grand.
I don't know about everyone else and where they live, but me personly I could make a better long term investment with 300 grand than buying 2 trucks that are going to depreciate in value over time. With home forclosures on the rise I could buy some good rental properties, keep them up, have a steady source of additional income and the houses, if kept up correctly, will increase in value. Where I live at now I could take that 300,000 and buy 10 rental houses. I could easily get 400 dollars a month rent for those ten. That's 4,000 dollars a month or 48,000 a year. In 6.25 years I'll have grossed that 300k and still have money coming in. All I have to do from that point on is spend money on up keep and taxes. In 6 years it will be time for you to start thinking about replacing trucks. Again I'm no business guru. If I was going to start a trucking company I would get my own customers and build a fleet of O/O. Just a thought.
I don't know about everyone else and where they live, but me personly I could make a better long term investment with 300 grand than buying 2 trucks that are going to depreciate in value over time. With home forclosures on the rise I could buy some good rental properties, keep them up, have a steady source of additional income and the houses, if kept up correctly, will increase in value. Where I live at now I could take that 300,000 and buy 10 rental houses. I could easily get 400 dollars a month rent for those ten. That's 4,000 dollars a month or 48,000 a year. In 6.25 years I'll have grossed that 300k and still have money coming in. All I have to do from that point on is spend money on up keep and taxes. In 6 years it will be time for you to start thinking about replacing trucks. Again I'm no business guru. If I was going to start a trucking company I would get my own customers and build a fleet of O/O. Just a thought.
bludragon13
Seasoned Expediter
good advice from everyone I hope he takes it and makes an informed decision--the answer to the question is then not a good time if you don't know what your doing -
Jack_Berry
Moderator Emeritus
noffas, the x06col here has a saying....never have more trucks than you can drive. might want to ask him.
moose
Veteran Expediter
First of all ,i would like to agree with all of the above advice .
and would like to answer as to the timing question.
it is a good time to get into trucking.
1 - FSC is not somthing to be ignore anymore by shippers/brokers/cariers ...
as it is , the one paying for the load ,understend now that it coasts money just to get the truck to the load ,as is for moving the fright .
in some ways , the rising fuel prices have done well to the industry.
2 - now is the time to get a business-loan ,
on one hand , truck financing rates have gone up , do to the hike in truck reposes ,
yet ,
with new trucks sales going down , many manufacturing have found innovative ways to finance a truck.
i would like to use the opportunity to proudly announce that i just bought a new truck for "no-money-down" , unheard on in this industry .
all signs are showing that interests rates, in witch the feds charge the banks for loans, will not go any lower , and are at a very attractive rate, and has being for a while , witch allow the lenders now to pass on the saving to a potential customer -to stay attractive .
you can get a low interest rate loan now , like never before.
tho , you will have to show more stability .
at any case , getting a good team to drive the truck ,
still is the hardest task to overcome .
an equal important task is : where to go to get the fright ?
Moose.
moose
Veteran Expediter
you are correct in your observation ,
as it is a major task for me to overcome !!!
only time will tell if i can afford the truck .
truck payments are 'extremely' high ,and so is the truck insurance.
yet all other operation and personal costs ,are very low.
think there is good money to be made at Expedite for a single st. truck O/O ?
lets ask the same question next January or February...
EOonline works for me , no dought about that ,
yet by researching the site before buying into the truck , even on this informative website , one cannot get a strait answer as to how to build an Expedite business plan !
even a simple question as :
how many loaded mil a year to expect ?
all one can get is all bunch of BS , rather then a number that is close to reality !
this is by far the mosts important base number ,
its have nothing to do with experience or home-time.dead-head,or breakdowns .
simple question :
if a truck to be out 340 days a year , ready for work ,doing a reasonable job on staying with-in where the freight is ,and time management,
how many loaded mil.s this driver can expect to drive ???
lets see some numbers.
Moose.
Broompilot
Veteran Expediter
Money and Knowledge than you can make an informed decision.
Otherwise, let me just give you an example of how much trouble you can cause for yourself and NO GETTING OUT OF.
Example you buy two trucks today at $160,000 depreicition this year lets say $27,200 next year it is $54,000 and same the year after. Well business does not go as you like after three years you say heck with it. If your not broke you sell the trucks and have to pay at best a couple of grand to get out from under it. So you have oinly paid down the loan to $100,000 and you sold them for 45 each. Well here is where uncle sam now becomes your roomate. you owe the difference in capitol gains of around $68,000.00 X your tax rate and that rate right there is gona be about 20% of that amount of 68.
Got the picture this is just one way to SCREW YOURSELF and not even no it until the year after you file your taxes.
Good luck and thanks for at least asking first.
Otherwise, let me just give you an example of how much trouble you can cause for yourself and NO GETTING OUT OF.
Example you buy two trucks today at $160,000 depreicition this year lets say $27,200 next year it is $54,000 and same the year after. Well business does not go as you like after three years you say heck with it. If your not broke you sell the trucks and have to pay at best a couple of grand to get out from under it. So you have oinly paid down the loan to $100,000 and you sold them for 45 each. Well here is where uncle sam now becomes your roomate. you owe the difference in capitol gains of around $68,000.00 X your tax rate and that rate right there is gona be about 20% of that amount of 68.
Got the picture this is just one way to SCREW YOURSELF and not even no it until the year after you file your taxes.
Good luck and thanks for at least asking first.
Well Moose, all bull **** aside, you should be able to come up with a gestimate yourself.
Jes take yer 340 days and subtract how many times you are going to break the truck. Then take the days you mis judged where the freight is, an subtract them. Then, take about half the weekends in that time period that you won't be loaded an subtract those days. Then, figgure how many miles on average you've run per day times the days you had left after the subtraction. An, walaa, you should be spot on. How's that for a scientific wild a$$ed guess. Bottom line is, thay ain't no answer (school book) it's a lot about "luck" considering your criterion mentioned. Even IF you are the best thing since canned peaches.
Jes take yer 340 days and subtract how many times you are going to break the truck. Then take the days you mis judged where the freight is, an subtract them. Then, take about half the weekends in that time period that you won't be loaded an subtract those days. Then, figgure how many miles on average you've run per day times the days you had left after the subtraction. An, walaa, you should be spot on. How's that for a scientific wild a$$ed guess. Bottom line is, thay ain't no answer (school book) it's a lot about "luck" considering your criterion mentioned. Even IF you are the best thing since canned peaches.