Making Money in Expediting

[Dreamer]

Phil,

Actually, over the years, we have seen a few examples of retired folks doing just that...selling their homes and jumping in, thinking they were getting paid to drive in an RV. The alternative is folks who heavily mortgaged their homes to get their truck, then lost it all.

We know you sold yours as a choice AFTER getting in, but many have not been so prepared, or lucky.

We can't say it enough.. as you know, people MUST thoroughly research all aspects of this business, and try it out.. before jumping. You did your research. Many see our posted numbers, and jump.. not realizing what sacrifices are entailed.






Dreamer
Forums Administrator


--------------

"If you don't have the time to do something right,
where are you going to find the time to fix it?"

-Stephen King

 

[terryandrene]

Rich:

Folks that enter this business with short purse strings must keep in mind that they are not just buying a truck, they are buying a business. There's no such financing thing as a "no money down", "no interest for six months" deal in expedite truck/business buying. At least none that I've heard of for a first time buyer.

You make a good point about "selling the farm". We recall the close acquaintance from our Roberts Express days who partially financed his tractor with equity in a double wide mobile home in a park in Oklahoma. He was doing well enough to keep ahead of expenses that he and his wife bought a pickup truck; life was good.

One day while on the loading dock of a shipper, our very overweight driver fell off the dock, broke his right leg bone, wound up in a huge cast that rendered him unable to drive. His wife could not handle the business alone so they stayed at home admiring all their possessions while the repo man took the pickup. Shortly later the bank repossessed his tractor and eventually his mobile home.

We trust that the majority of our forum members are sufficiently prepared for medical and loss of earning capacity, if not, this is a great time to start planning so that you don't have the same life altering event experienced by our Oklahoma driver.

 

[RichM]

Good point,in addition to the above mentioned Medical problems that can occurr there is the unseen and unfortunate actions that can affect a Expediter. Accidents happen,if a truck is damaged beyond repair the insurance company will only pay what they think is present market value. So your bank loan and home equity loan may be upside down for quite a large sum.

Expediting companies can at the drop of a hat change policys or discontinue operations. Conway is a good example. Companies may have one or two significant customers that demand specialized equipment. You,the owner invests in a vehicle for these customers. Now if this customer departs from your company to another or decides it's better to haul and control their own freight you are left with the payment required to haul this freight which no longer exists.

I have met my share of drivers that cashed in their homes or took equity loans to finance a truck.I don't judge these folks as that is what they decided to do. The purpose of my post was to not look at the pot with rose colored glasses.

 

[davekc]

I think this topic comes down to experience. Sorry Phil. But the reality is, the experienced folks and many of the mods have the exposure of being told on a regular basis of how someone sold their home or financed against it, only to get into trouble.
When a couple gets into financial trouble for what ever reason, as the other posts indicate, they aren't likely to call you Phil. Why would they? Your truck ownership period has only been a couple of months. That would explain why you have never heard or been approached about it.


Good post Rich,
I am glad there is some repetition with regards to "selling the farm" and items that are simular. I am not sure it is addressed enough at times. All to often folks enter this business totally unprepared financially, and then bad things happen.

With regards to specialized equipment, always pay cash or close to it. Why? As mentioned earlier, those services collapsed in 99-2000.
We bought numerous reefer trucks for pennies on the dollar from drivers that went under. Like any investment, I wouldn't have "all of my eggs in one basket"
When looking at current levels, it is no mistake that the majority of reefer straight trucks in "supply chain" have been replaced by reefer pups from Watkins buyout. All of the reefer straights in Memphis and many other areas are history. Or have been for the last 3 to 6 months.










Davekc
owner
22 years
PantherII
EO moderator

 

[ATeam]

OK, gentlemen. Thank you. As I said, in three years of expediting I have never heard of anyone who sold their house to buy a truck. Now I have. Thank you for the information.

 

[RichM]

I have also heard that the advent of Watkins reefer pups spell the end of W/Glove C reefer units.Advertsing is being prepared for a "One size fits all" campaign. This was told to me by another EO member whose brother ships with Fedexcc and Fedex Frt.

 

[C5BILL]

Hey, I sold my Corvette to buy my van. Does that count???

 

[ATeam]

If what RichM says is true about the end of White Glove reefer freight, our response would be to drop the reefer off our truck and keep on trucking, or to find a carrier that will make it worth our while to haul reefer freight. Either way, we'll continue on and expect to do well. One of the best months we ever had in expediting we had driving a fleet owner's dry-box trucks. While we believe reefer trucks are the way to go (for us), we've done both reefer and dry-box expediting and done well in both.

If the end of WG reefer freight actually occurs, which I doubt, we know from past experience and from our dry-box numbers that we can continue on with little distress. It might mean dropping a perfectly good reefer off the truck and sustaining that loss, but such a loss would not be enough to knock us out of the business or even think seriously about doing something else.

That is due in no small part because we have read and heeded the advice repeatedly given in the Open Fourm about being prepared for changes and setbacks before you jump in. We actually listened to what the veterans had to say on that matter and saved and budgeted our money accordingly.

Terminal cancer might take us out of expediting. The lack of reefer freight won't.

 

[davekc]

Hey, I sold my Corvette to buy my van. Does that count???
========================================================

Only if you are living in the Corvette








Davekc
owner
22 years
PantherII
EO moderator

 

[ATeam]

One other thing. If we did drop the reefer off our truck, the gained under-body space would be perfect for one of those pull-out grills that I saw on Trick My Truck.

 

[davekc]

I think as long as a company doesn't over populate that reefer segment and remains competitive, it will will have a value. I do think the rates for some will drop as you see now. Additionally, the runs will be more specialized or hands on, and shorter.
Why? It is cheaper to move the freight through other means. The Watkins buyout as mentioned, wasn't an accident. External competition is increasing, thus driving down your overall rates. The same load last year is hauled this year at a cheaper rate. One might think the rates went up, and they did slightly in some cases. But, FSC and rate combined, are actually less. That is an issue that all carriers are dealing with.

The slide out grill concept is an idea to hang on to. Hey, you might want to hang on to it and use it for something to keep the steaks frozen.










Davekc
owner
22 years
PantherII
EO moderator

 

[guest]

Rich

Cr units do very well at FedEx so I really can't see them doing away with that size truck. We have one and it does really well and we are looking to buy another one. Our Cr unit and our D unit that was dropped to C unit because it couldn't haul 13,000 lbs after we loaded it up with White Glove things has done more that our 2 D units each month.


Drive Safe
David Mayfield
O/O since 1/27/95

 

[guest]

if you have a white glove t-val unit and just a regular unit and u put a team in the regular unit who does nothing but bust their butts and run then the truck that has the better team makes the more money

was in a truck with a co driver and we worked our butts off but we basically made the owner money while we busted our a$$es off and it was a d unit. and the other team was in a cr t-val
our truck blew the doors off the other truck cause we clicked as a team and busted our humps.so it dont really matter what truck you have its the drivers who make the trucks what they are

 

[terryandrene]

Dave said:

One might think the rates went up, and they did slightly in some cases. But, FSC and rate combined, are actually less. That is an issue that all carriers are dealing with.

I think that the issue that the carriers are dealing with is the perception, that many of their drivers have, that base rates are going down because the FSC and Base Rate are combined when run offers are made to the drivers.

The reason that FSC and rate combined are actually less is easily understood...The cost of fuel went down from the recent highs of $3.00+. Base rates have certainly not kept pace with inflation, if they had kept pace, we would all be earning a meaningful income AND getting a good return for our investment in our equipment. My carrier's base rates to it's standard tariffs actually went up by about 3% in August of this year. That increase was seemingly absorbed by the lowering of the FSC at the same time, hence, the carriers gotta separate the tariff and FSC and tolls and accessorial charges when tendering run offers.

 

[guest]

Well, I guess I'm going to answer my own question about making money. If we manage to make $15,000 a month for November and December we will make $200,000 with a dry D unit. We have an in-service rate of 86%, and I discovered we have spent about 60 days at home this year. I haven't counted up the days we have sat idle on the road waiting for a load, but I'd rather improve that number than give up time at home. If we could cut in half the number of layover days and maybe spend less time at home, it looks like we could make between $200-250,000.

Mike & Cindy

 

[are12]

>There's no such financing thing as a "no
>money down", "no interest for six months" deal in expedite
>truck/business buying. At least none that I've heard of for
>a first time buyer.
>

Have to disagree with you there - about the "no money down". If only we could have talked our bank into giving us 6 months interest free - it would have been a perfect deal :+ :+

 

[Tennesseahawk]

Yep... but there's no bones about being the richest guy in the graveyard. yuk yuk yuk

Really... how much is enough? If you have nothing at home, that's one thing. But in the last month, I've missed my daughter growing up. How much are memories worth? Yesterday my dad called her a pipsqueak. She told him "I'm not a pipsqueak, and don't even think about it!" Where does a 3 yr old come up with this stuff??? :7

"If I claim to be a wise man, it surely means that I don't know." - Kansas

 

[Broompilot]

temper, temper pipsqueek, like father like daughter. I can hear her now. WOW.

 

[sixwheeler]

So youre pretty much saying dont use equity in your house to buy a truck? This is pretty much my plan in a few months is why I m asking.
Not a hundredk truck... just a decent clean d unit mechanically solid, hopefully. Right arounf the 30 to 35 thousand range. I realize a lot can happen and if it breaks down...no ifs ands or buts you have to get it off the side of the road and fixed. It seems it wouldnt be all that bad. You can claim the interest from the loan plus still claim depreciation on the truck.

 

[ATeam]

>So youre pretty much saying dont use equity in your house to
>buy a truck? This is pretty much my plan in a few months is
>why I m asking.
>Not a hundredk truck... just a decent clean d unit
>mechanically solid, hopefully. Right arounf the 30 to 35
>thousand range. I realize a lot can happen and if it breaks
>down...no ifs ands or buts you have to get it off the side
>of the road and fixed. It seems it wouldnt be all that bad.
>You can claim the interest from the loan plus still claim
>depreciation on the truck.


sixwheeler has been an Open Forum member since November, '05. I don't know of a single person who has said using home equity to buy a truck is wise. I know of many that have repeatedly said it is unwise. Yet after nearly a year of reading posts, sixwheeler is intrigued by the idea. Sixwheeler, please note. NO ONE believes it is a good idea to mortgage your house to buy a truck.