Preparing to invest in a new truck & team. Advice

pitchman · Mar 19, 2005

I have a great team for driving and am considering investing in a truck for them. They are interested in expediting freight for companies such as Panther II, Con-Way, FedEx etc. Since the truck will be a class 8 straight truck with a extended sleeper and a 22ft box, will I be able to keep them logging at least 4,000 miles per week? I will be putting a tag axle on to handle heavier loads and have even considered a reefer unit but have decided against it.

Now, based on the experience of those of you out there, what company do you consider the best to run with and why? So much propaganga is out there, we want real world experience to educate us on the various companies out there and who pays the best and can keep our wheels turning.

Anyy feedback, good, bad or indifferent is appreciated.

Thanks!

geo · Mar 19, 2005

RE: Preparing to invest in a new truck & team. Adv

i would good with a western star with a proheat, if it's not a star it's not a truck
give bill moore a call at 800 388 3850 great person to deal with
builds truck's right's when i had my western star that's where i got it

give landstar express amreica a look at as they have best of everything and have a lot more freedom

i was with fedexcc for 11 year's and now with egl and run local 90 percent of time and 10 percent out of town
now have a sprinter

RichM · Mar 19, 2005

RE: Preparing to invest in a new truck & team. Adv

Expediting is a hit or miss business. There will be weeks where your team will do 4,000 miles and there will be weeks when your team does 1,000 miles.Lots of variables in expediting,location is a key,how many other trucks are ahead of you,should you turn down short loads and wait for the long ones(which may not come). Your team may take a long good paying load to somwhere in neverland(sorry Mike) and then have along deadhead to a decent freight location.

Instead of asking for miles ,what type of gross revenue to the truck do you have in mind?

davekc · Mar 19, 2005

RE: Preparing to invest in a new truck & team. Adv

I would look carefully at your expectations. 4000 mile average per week might not be realistic right now. There is alot more trucks right now than freight. We were in Florida last week and it looked like a Landstar & Fedex convention. That coupled with rising fuel costs, would have me wait alittle while and see if the rates adjust.
If the pattern holds for a couple of months, repos will start showing up. Better investment than new considering the current freight climate. Also, when buying equipment, pay cash. It is not the time to be heavily financing equipment.
Davekc
owner
20 years

pitchman · Mar 19, 2005

RE: Preparing to invest in a new truck & team. Adv

>Expediting is a hit or miss business. There will be weeks
>where your team will do 4,000 miles and there will be weeks
>when your team does 1,000 miles.Lots of variables in
>expediting,location is a key,how many other trucks are ahead
>of you,should you turn down short loads and wait for the
>long ones(which may not come). Your team may take a long
>good paying load to somwhere in neverland(sorry Mike) and
>then have along deadhead to a decent freight location.
>
>Instead of asking for miles ,what type of gross revenue to
>the truck do you have in mind?

I would like to generate $150-$180k annually. Is that realistic?

pitchman · Mar 19, 2005

RE: Preparing to invest in a new truck & team. Adv

>I would look carefully at your expectations. 4000 mile
>average per week might not be realistic right now. There is
>alot more trucks right now than freight. We were in Florida
>last week and it looked like a Landstar & Fedex convention.
>That coupled with rising fuel costs, would have me wait
>alittle while and see if the rates adjust.
>If the pattern holds for a couple of months, repos will
>start showing up. Better investment than new considering the
>current freight climate. Also, when buying equipment, pay
>cash. It is not the time to be heavily financing equipment.
>Davekc
>owner
>20 years

I was planning on paying cash for the truck or only financing a small portion. Would LandStar or FedEx be a better choice as a company to work with? Panther was quoting $1.20 per loaded mile and Con-Way was at $1.15 and FedEx was the highest. I've decided on new and not used because I currently can afford it and feel it may be best to have reliable equipment with a warranty. Thanks for your help!

pitchman · Mar 19, 2005

RE: Preparing to invest in a new truck & team. Adv

>i would good with a western star with a proheat, if it's not
>a star it's not a truck
>give bill moore a call at 800 388 3850 great person to deal
>with
>builds truck's right's when i had my western star that's
>where i got it
>
>give landstar express amreica a look at as they have best
>of everything and have a lot more freedom
>
>i was with fedexcc for 11 year's and now with egl and run
>local 90 percent of time and 10 percent out of town
>now have a sprinter

Will we make more with FedEx CC and will the keep us busy enough? What was your reason for staying with them for so long and then making a move? Thanks!

RichM · Mar 19, 2005

RE: Preparing to invest in a new truck & team. Adv

I am with FEDEX and let me say it is not what it used to be. Last night I delivered into Atlanta at 1900. There were 8 D units and 6 E units ahead of me and this was on Friday which is normally a very busy day. I was fortunate to get a trip out but only becausue I was the closest truck to the pick up.

I can't speak for Panther or LEA but the competition for expedite loads is brutal these days.

With a reefer $150 k gross is doable but expect your team to do some hellacious deadheads.

BTW is this team you want to put on from the state of MN?

davekc · Mar 19, 2005

RE: Preparing to invest in a new truck & team. Adv

Paying cash is a good idea. As far as rates, it depends on what you keep. Fedex has higher rates but alot less on fuel surcharge. The reality is that a large majority of freight is bid on and they are all running at the same rate through the course of a year. The major difference is how much deadheading will you be doing?

As far as the reefer, skip it. We had 5 reefer units and they don't pay for themselves if buying new.
Fedex has trucks sitting all over the place and I am not sure why.
Look in the classifieds here for owners looking for drivers. Just about all of them are fedex owners. That in itself should tell you something.
Davekc
owner
20 years

raceman · Mar 20, 2005

RE: Preparing to invest in a new truck & team. Adv

RichM, Your BTW question is a good one.

I normally would kick in my $0.02 here on carriers but I dont feel good about discussing that at this time, so that I will skip.
I will give you my input on the Reefer. Don't do that! Period! Not now not later, Don't do that.

Raceman
Owner Two Straight Truck.
Part time driver of one of my trucks and local TT.
2 years OTR Expediting
1 yr local Expediting
Line Haul TT 2mon.
OTR Straight Truck Plt to Plt off and on 5 years.
Based in Cincy Ohio
Currently at Express-1
Father of 4 children
Grandfather of 1 boy
3 years without full use of my mind

Crazynuff · Mar 20, 2005

RE: Preparing to invest in a new truck & team. Adv

I don't know what you're doing to have money to pay cash for a new truck but there are better ways to invest the money . Gross income of $150,000 may sound great but take away fuel costs ( figuring a very low fuel cost of $2 per gallon and very high mileage figure of 10 mpg . You want 4,000 miles per week . $800 a week or over $40,000 just for fuel . ) Figure other expenses like taxes , insurance , tires repairs . The truck is paid for but will need to be replaced . What is left to pay 2 drivers and give you a worthwhile return . Bear in mind a considerable amount of that 4,000 will be deadhead.

9

pitchman · Mar 20, 2005

RE: Preparing to invest in a new truck & team. Adv

>I am with FEDEX and let me say it is not what it used to be.
>Last night I delivered into Atlanta at 1900. There were 8 D
>units and 6 E units ahead of me and this was on Friday which
>is normally a very busy day. I was fortunate to get a trip
>out but only becausue I was the closest truck to the pick
>up.
>
>I can't speak for Panther or LEA but the competition for
>expedite loads is brutal these days.
>
>With a reefer $150 k gross is doable but expect your team to
>do some hellacious deadheads.
>
>BTW is this team you want to put on from the state of MN?

One driver lives in AZ the other in MI. I'm hoping to select the company we want to work for within the next week. I'll try and do my homework as best as I can. Thanks.

pitchman · Mar 20, 2005

RE: Preparing to invest in a new truck & team. Adv

>I don't know what you're doing to have money to pay cash for
>a new truck but there are better ways to invest the money .
>Gross income of $150,000 may sound great but take away fuel
>costs ( figuring a very low fuel cost of $2 per gallon and
>very high mileage figure of 10 mpg . You want 4,000 miles
>per week . $800 a week or over $40,000 just for fuel . )
>Figure other expenses like taxes , insurance , tires repairs
>. The truck is paid for but will need to be replaced . What
>is left to pay 2 drivers and give you a worthwhile return .
>Bear in mind a considerable amount of that 4,000 will be
>deadhead.
>

Since the fuel, like most other expenses are tax deductable, I will have to accept it as a necessary evil of just doing business. As for deadheading, I understand the problem that is created by non-paid/partially paid for miles. The best anyone can do is try to keep them at a minimum as best as possible... once again, a necessary evil I imagine... The money for the truck is from the investment that was made in my home. I built it four years back and it increased about 33% annually. I've refinanced it and took a large amount of the equity out to invest in one truck to help my cousin and brother, my drivers, (and hopefully myself as well) and if God is on my side... (along with the expediting industry) maybe I'll add a few more over the next several years if all goes well.

Thanks for the guidence, it is truly appreciated, I will try and keep a tight handle on the expenses to keep them from spiraling out of control. Any other advice is greatly appreciated. Thanks again!

RichM · Mar 20, 2005

RE: Preparing to invest in a new truck & team. Adv

Man oh Man your story is scarey. I would never borrow on my home to finance a truck driven by relatives. I believe in the old axion about relatives, you do not loan them money and you do not hire them. your relatives are probably OK guys but the relationship changes when they are working for you.
Everyone out here other that a team from MN will tell you, keep your equity and let it build,you are using your equity to finance a vehicle that will depreciate 20-25% every year but your home is going up 33%,so by not buying the vehicle you are gaining 53% on your home.
Talk to a good tax guy or CPA. There are other ways to invest your equity that are safe and give a guaranteed return.Good Luck.

Crazynuff · Mar 21, 2005

RE: Preparing to invest in a new truck & team. Adv

I recently organized an LLC and learned if a truck is bought using a home loan the way you plan the home is part of the business and not protected by the LLC . You'd be risking your home to go this route .

davekc · Mar 21, 2005

RE: Preparing to invest in a new truck & team. Adv

I agree with the above advise.
Never borrow against your home, especially on a depreciating asset.
Not aware of any trucks that increase in value?

Another example of demise would be that you have the truck for a year and it is totaled in a accident. The payoff will be less than what you invested. You would have to borrow against your house again to stay afloat.
As I mentioned, pay cash or wait. Borrowing against your home would not be paying cash. Very high risk. That risk also increases when you bring relatives into the picture.

But on a side note; I do have some oceanfront property in the desert for sale....if interested

just kidding of course.
Be careful!
Davekc
owner
20 years

geo · Mar 21, 2005

RE: Preparing to invest in a new truck & team. Adv

got tried of running the roads and had a chance to stay local and be home 90 percent of the time and 10 percent out of town
and with egl vchle can't be over 5 year's old so traded while i could and got a smaller unit so wouldn't have to log and cross the chick house now only sometimes have to cross the line

LDB · Mar 22, 2005

RE: Preparing to invest... but it isn't an investm

The money for the truck is from the investment that was made in
>my home. I built it four years back and it increased about
>33% annually. I've refinanced it and took a large amount of
>the equity out to invest in one truck to help my cousin and
>brother, my drivers, (and hopefully myself as well) and if
>God is on my side... (along with the expediting industry)
>maybe I'll add a few more over the next several years if all
>goes well.

SCREEEEEEEEEEEEEEEEEEECH!!!!!!!!! That's the sound of pulling both airbrake knobs at speed. Even though they are marked clearly that it is illegal to make a u-turn except for emergency vehicles make a u-turn. You are creating an emergency by mortgaging your home to pay for a truck. Get an XM radio and listen to Dave Ramsey. For that matter, call him up and discuss your plan with him. I believe he will tell you the same thing. What you need to do is pay off the house and then get the next truck.

That being said, it seems at this time Panther might be a good choice for you. FedEx seems to be saturated. Landstar requires at least 6 months experience and I wasn't sure if your people had that or not. Be sure to do an in-depth analysis of backhaul with whoever you talk to. That can at least turn red to black while moving you to a better location. Some of them are real money makers as well.

Another issue is your cargo box. You mentioned a tag axle I believe and originally I considered that. I've decided now I'll go with duals so I can activate the splitter and have traction on all wheels when I need it. It means all tires wear all the time but there have been times I could have used those extra drive wheels getting out of icy docks etc. Also, if you're going with a class 8 and tandems be sure to get a box that's equal in door size to a semi trailer. I'd also say skip the reefer. You probably won't get enough loads to pay for it much less make any extra profit. Good luck to you whatever you do.

Leo
truck 4958

Support the entire Constitution, not just the parts you like.

RichM · Mar 22, 2005

RE: Preparing to invest... but it isn't an investm

One other difficulty that you can expect is problems that will arise because of the fact that both drivers live so far apart from each other.
One may have family issues that requires him to go to AZ and stay for a week or so but then the other driver will have to figure a way to go to his home.
I did meet up with 2 guys running a T/T once and they were partners and lived about 700 miles from each other. They solved the problem of going home by driving in their cars to a halfway point then going on the truck. When the time came to go home they would then leave the truck at the halfway location and drive home in their cars.

x06col · Mar 22, 2005

RE: Preparing to invest... but it isn't an investm

Pitchman:
I have read some really foolish stuff on this site. I must admit this one really takes the cake. One dash of mortgaged home, add two pinches of relatives, stir with a thousand miles of geography, bake for about three months until you all cry (if not before) Then Type back to us and let us know what you have learned.