Combined, those two loads paid $23,000 gross to the truck, not net. I did not say profit. I said the two loads "paid more to the truck than it would cost to replace our reefer (not upgrade, replace)." That was a statement about gross revenue, not net.
No reefer makes money by itself. It takes a truck too, and fuel and tires and license and insurance, etc. etc. etc. That's why you have to look at the total package and know your cost per mile and revenue per mile and cost per day and revenue per day.
That said, a reefer upgrade or replacement for us would be a relatively isolated event. The truck would stay the same and that was paid off years ago. We know what we can make hauling dry freight because that's most of what we have done in the last year.
Given our reefer history, and that of others we know at Landstar, it is a safe bet that we would get a couple of grand slam reefer loads a year like those described above, So it's a safe bet that a new reefer would be a profitable choice. And with Landstar moving toward new reefer services, the upgrade/replacement proposition becomes even more attractive.
We have a year to let things play out. The old reefer still runs like a top. It has paid for itself many times over (to the extent that such a thing can be quantified) and for its replacement too.
A new reefer for us would be paid for with cash the old reefer helped make. At some point, that spent cash would be replaced with cash the new reefer helped make. After that and maintenance costs, it's all money in the bank.
Yes, Layoutshooter, you are exactly right. Economic growth is weak and slowing now and our government is doing little to build confidence for major purchases. Yes, things may melt down in a way that would turn a reefer purchase into a decision that is deeply regretted. I am as dialed into the negative possibilities as anyone (see this post). But things may also continue in a way that enables expediters to muddle through it all and still make money.
Diane and I made it through the Great Recession as many expediters did. Looking back at the bad times, the thing that hurt us the most and rattled our confidence more than anything else had nothing to do with the economy or world events. It had to do with policy changes made by our carrier of the time. Those changes hurt us financially, shattered our confidence in the future and prompted a move.
One year later we find ourselves again confident in a carrier. Having a year of run history to examine, reefer purchase decisions are easier to consider than they would have been had we stayed with our previous carrier.
The economy is no better than it was a year ago and world events are more troubling. But it's peaceful where we are now and easier to think major purchase decisions through.
The primary financial relationship a leased owner-operator has is with one's carrier. Two-way trust is essential (to Diane and me at least) and we're glad to have it with a carrier again. When you detail the challenges general economic conditions present, it is difficult to trust the future and take a leap of faith. If you do not trust your carrier the future is impossible to trust.
Last edited:
