OK, I have a question: Why don't expediting companies have a lease/purchase type program similar to full-load trucking companies to augment their demand for O/O's? Is there not a need for that? Do they get more than enough contractors as it is? I just see an "urgent" need for O/O's in ads or is that crap? I would be one of those interested in a lease situation(I know of Housworth but they only do teams)
lease purchase
- Thread starter newthead
- Start date
paperback1
Expert Expediter
They don't want/need the overhead. There are plenty of people willing to try this and use their own money to buy trucks. With the full trucking companies, you usally lease an old company truck, and with expiditing trucks, once they get a couple years old, they are gonna be pretty beat up, and only good for 2-3 yrs more anyway, and then their stuck with trucks they can't get rid of.
This is an excellant question. Let me take a shot at answering it.
First, the "urgent need" part. Most of these companies have contract with major manufacturers/shippers. Companies such as Ford, GM, Chrysler etc. have certain requirements that the expediting companies have to meet. One of these expectations is that the expeditor has to have enough trucks to meet the "potential" demands of the shipper. If the expediting company doesn't have trucks available when the shipper needs them, then the shipper will start going to another company. The expediting company really has few choices. Comply or loose the business.
Now the "lease" part of your question. I believe the answer to this is obvious. Why would an expediting company want to put its money at risk in a business when it seems that over half of the people that get into the business leave in less than 2 years? The turn over rate in this business appears to be exceptionally high. Along with that, ex-drivers end up paying on a truck they are not using or loosing money on the truck just to get rid of it. Any smart business owner would want to avoid that kind of situation.
The part that really surprises me is that there are newbies sitting out there right now that believe this happens to others and won't happen to them. Do you know that only 1% of the gold rush miners made any real money? The other 99% lost money. But everyone believes that they will strike it rich.
First, the "urgent need" part. Most of these companies have contract with major manufacturers/shippers. Companies such as Ford, GM, Chrysler etc. have certain requirements that the expediting companies have to meet. One of these expectations is that the expeditor has to have enough trucks to meet the "potential" demands of the shipper. If the expediting company doesn't have trucks available when the shipper needs them, then the shipper will start going to another company. The expediting company really has few choices. Comply or loose the business.
Now the "lease" part of your question. I believe the answer to this is obvious. Why would an expediting company want to put its money at risk in a business when it seems that over half of the people that get into the business leave in less than 2 years? The turn over rate in this business appears to be exceptionally high. Along with that, ex-drivers end up paying on a truck they are not using or loosing money on the truck just to get rid of it. Any smart business owner would want to avoid that kind of situation.
The part that really surprises me is that there are newbies sitting out there right now that believe this happens to others and won't happen to them. Do you know that only 1% of the gold rush miners made any real money? The other 99% lost money. But everyone believes that they will strike it rich.
RE: lease purchase...Well.. ACTUALLY... 
According to our everpresent editor Jeff Jensen, Try Hours just started such a program. I don't know the payment or anything, but the article says they do still pay for maintenance and repairs. I don't know a lot about Try Hours, but if I were looking for a new ride right now, I would look at them....
Here's a link to the article...
http://www.expeditersonline.com/artman/publish/article_532.html
Dreamer
According to our everpresent editor Jeff Jensen, Try Hours just started such a program. I don't know the payment or anything, but the article says they do still pay for maintenance and repairs. I don't know a lot about Try Hours, but if I were looking for a new ride right now, I would look at them....
Here's a link to the article...
http://www.expeditersonline.com/artman/publish/article_532.html
Dreamer
RE: lease purchase...Well.. ACTUALLY...
when the time came to lay off drivers,and it inevitibly would, they would be laying off drivers in company ownned trucks. Then they would be making payments on trucks that were not making them any money.At the end of the lease they would be stuck with trucks that are not worth anything, there is practically no equity in a 6 year old expediter. When things were busy they would have to buy more trucks to haul the freight. When things slowed down,instead of owner operators going bankrupt or trucks being repo'ed they would be stuck with them. they avoid many of the problems associated with a business that is not steady or particularly reliable. When a person owns the truck they are sometimes forced to try and ride out the tough times. As it is the company has no responsibility to you or your truck. If freight is there,great, but when its not, too bad. They know they do not want to have to absorb any of the costs of a failed business venture.
when the time came to lay off drivers,and it inevitibly would, they would be laying off drivers in company ownned trucks. Then they would be making payments on trucks that were not making them any money.At the end of the lease they would be stuck with trucks that are not worth anything, there is practically no equity in a 6 year old expediter. When things were busy they would have to buy more trucks to haul the freight. When things slowed down,instead of owner operators going bankrupt or trucks being repo'ed they would be stuck with them. they avoid many of the problems associated with a business that is not steady or particularly reliable. When a person owns the truck they are sometimes forced to try and ride out the tough times. As it is the company has no responsibility to you or your truck. If freight is there,great, but when its not, too bad. They know they do not want to have to absorb any of the costs of a failed business venture.
RE: lease purchase...Well.. ACTUALLY...
"when the time came to lay off drivers,and it inevitibly would, they would be laying off drivers in company ownned trucks. Then they would be making payments on trucks that were not making them any money."
Why would they lay of someone making a payment on a leased company truck FIRST? You actually made my point. I'm sorry but that doesn't make a whole lotta sense. They would end up with a truck they had to park somewhere and deal with any other costs associated with it. If they let go an IC with his/her OWN truck, they have no truck then to mess with.
Although..........I can see in expediting how a leased truck might be more hassle for the company in regard to age and maintenance. Hmmmm.........
"when the time came to lay off drivers,and it inevitibly would, they would be laying off drivers in company ownned trucks. Then they would be making payments on trucks that were not making them any money."
Why would they lay of someone making a payment on a leased company truck FIRST? You actually made my point. I'm sorry but that doesn't make a whole lotta sense. They would end up with a truck they had to park somewhere and deal with any other costs associated with it. If they let go an IC with his/her OWN truck, they have no truck then to mess with.
Although..........I can see in expediting how a leased truck might be more hassle for the company in regard to age and maintenance. Hmmmm.........