starting up, looking for drivers, questions

[nightcreacher]

so what is the general consensus on average weekly miles with an expedited truck? I'm hearing from the two of you that it is a struggle, whereas our colleague (with the four trucks and at panther) is averaging 2-3000.

Guess i don't understand why i should be so pessimistic.

You better find out from your buddy at Panther how much experience his drivers have,how long was it before he actually felt he was in the right business,and there is one major thing.Most loan companies have a hard time financing trucks to first time buyers.A loan for a comercial vehicle is much different tghan trying to ghet a loan for a house or car.Most banks feel if the loan defaults,and they have to repocess,they cant recover the loss

 

[buddy]

Is that 2-3000 miles per week loaded miles?

I can say this, since we have been driving our T-val truck the one thing we learned real quick is , the general/overall expense in maintaing a T-val unit... one can quickly see why it is important for a T-val to be running at a good rate (even if it is surface loads) .

We have seen some of the expencies the owner has with just the refer and recording equipment not to mention the down time related and so it reinforces why we need to run and run the best we can but mostly it reinforces wht we dont want to buy a truck/refer .

When we get a load offer (surface or other) There are 2 groups I think of first one is my wife and I and the other is the owner.
I know what my owners minimus are and I know I need to make a living. Obviously if offer isnt right, we turn it down.

Anyway, I sure hope this venture works for you and yes Welcome to EO.

 

[fortwayne]

Being in and out and then back in this business as a company driver, owner operator, and a company owner with his own authority I would suggest putting this entry into this field off for another year or two.

There is to much financial instability in this industry let alone the rest of the economy to get into a business which involves alot of capital. Since we have no clue on which direction our tax system is going to go, since most business owners now have no clue what the feds are going to do with the business tax breaks and structure I find it unreasonable to enter into any business until this tax classification is cleared up sometime in 2011.

It has nothing to do with your experience, you as a person, you as a business - its' the simple fact is, in order to develp a business plan, in order to invest in equipment and to establish working capital, you have to know your tax status/classification, rates, etc......if not in IMHO it is a business plan doomed to fail.

During this waiting period you can stand by and watch some of the weaker less finanically prepared trucking companies fall off the face of the highways.

........and it could have been avoided in some cases if they would have prepared a better business plan INCLUDING KNOWING THEIR BUSINESS TAX SITUATIONS!

 

[shadow7663]

Guess i don't understand why i should be so pessimistic.

Becuase it YOUR FUTURE!!!! Expect & Plan for the worst ALWAYS!!!!!

You seem to be looking at this whole situation with blinders on, Seeing it from only 1 point of view and thats your friends point of view. You seem to have your mind made up and nothing else is going to change it. Fact is that you have some of the most expienced people in this industry right here on this site. They have been through the highs and lows of the industry. They know it inside and out. Take what they have to say as a priceless guide. Dave & Gregg tell you like it is good or bad. They have NO reason to tell you any other way.

If your buddy is so nice and free with information ask to see ALL of his records. Income per truck, driver pay per truck, Taxes per truck, repair bills for each truck, maint. bills for each truck. Truck payments ect.. Ask to see this for the past 3 years for each of his trucks. I will bet you will see at least one truck if not more producing revenue yes but not a single penny of profit! When you find that truck or trucks. THAT COULD BE YOU!!!!!!

You have to open your eyes a little and try to look at this from others points besides just your friend. And consider this. I just put $17,000 in the engine in my truck. Did I plan on it? NO but I survived it because I plan for the worst and had cash reserves on hand. Truck was down for 3 WEEKS! This can happen to anyone. You will have a hard time keeping a good driver or team if the truck goes down for any period of time.

Good luck ! Do your research twice then decide if you still want in.

 

[greg334]

Guess i don't understand why i should be so pessimistic.

As Shadow said, it is a business and should be treated as one.

Don't get fooled by what accidental fleet owners say, or for that matter drivers. Listen to those who have business experience and listen carefully. If it was all that easy, then it would be a thing where everyone would be millionaires.

The ONE piece of advice I give for free is this;

GO get a lawyer and discuss your plans with him/her. Build the relationship with them were you feel comfortable and then pay their retainer.

The second piece of advice is to get an accountant who can advise you on your business decisions. Again seek out someone who you can work with, call when needed and if they have a retainer fee - PAY IT.

These are two resources you need before you even move on a loan or think you can cut it.

but you both have to admit, if there's any time to get in, the current climate is favorable.

ABSOLUTLY NOT.

I do not recommend anyone getting into this business as a driver, let alone a fleet owner without some experience in this industry.

What are your expectations as a fleet owner? Sitting watching the game on Sunday while your people are working?

Sticking numbers in a spreadsheet on Friday afternoon?

What?

I think this niche market will be changing again soon, my resources who are economist that I can actually ask questions to, say there is trouble and no one can figure out what's going on until it happens. They say not to make big business expenditures unless you have to unless the is a time limit and that is one reason why we are seeing a lot of work, 2011 is coming.

well, our colleague with four profitable trucks is at panther.

So, the point is?

One owner out of how many?

What is profitable mean?

we plan to use them.

Use them for what?

Practice on being a fleet owner?

we are not planning to drive the truck.

Biggest mistake anyone can make.

from what we have been told, the temp controlled loads get a fixed price, regardless of need to refrigerate

BUT see you missed an important point, running Reefers on with Panther is not a real money maker - period.

If you want to make money, then it isn't at a consistent $1.60 a mile but knowing how to leverage that truck for the $2 and $3 a mile run. Or being able to get a $5.25 a mile run to the truck, why settle for $1.60 a mile?

Maybe it is that discounted FSC?

 

[highway star]

from what we have been told, the temp controlled loads get a fixed price, regardless of need to refrigerate

If it doesn't need to be cooled, or warmed, then it's not a temp controlled load, is it?

You seem down right giddy about that interest rate. Remember, it's just one small slice of the pie, not the lone factor to make a decision on.

Oops, gotta go, there's someone getting ready to throw another bag of money at my truck.

 

[jjoerger]

Think about it this way. If all a fleet owner had to do was buy a truck, drop it off at the carrier and start collecting a good return on his investment wouldn't everyone be doing it?
There is a lot to learn about how this business works and how to keep drivers in the truck and the wheels turning.
The best way to learn is by doing it yourself. Find a fleet owner to drive for and learn before you lose all your money and good credit.
And when you find that 5% loan let us know where you got it.

 

[Turtle]

The biggest mistake people make in this business is getting a van and becoming an expediter because they think they can make a lot of easy money.

The second biggest mistake people make in this business is buying a straight truck and becoming a fleet owner because they think they can make a lot of easy money.

Originally Posted by markwilson
but you both have to admit, if there's any time to get in, the current climate is favorable.

Why? Is it because fuel costs are up, with no indication that they'll drop, and freight rates are down, with no indication they'll rise? If anything, right now is the least favorable climate to get into this business. Especially with a $100,000 truck.

There was a time when the inexperienced could get into this business and do OK in spite of themselves, where the mistakes and the ignorance were very forgiving. But that hasn't been the case for at least 4 or 5 years. This is a climate where the simplest mistakes become magnified because you have so few opportunities to make up for those mistakes. Ignorance of the realities and potential problems in this climate is brutally unforgiving. The biggest indicator of that is the notion that you need 800 miles a week to break even. Fact is, you'll need at least 1800 miles a week just to keep a team in the truck. Anything less and the truck's gonna sit there, just burning cash day after day. And you'll never get that cash back.

 

[Ragman]

The biggest mistake people make in this business is getting a van and becoming an expediter because they think they can make a lot of easy money.

You can't? Dang!

 

[markwilson]

but isn't it true, though, there are many driving teams available? we know that driver turnover is a leading cause of owner problems/bankruptcy, but doesn't that also imply that there are ample numbers available? isn't it true that there are teams looking for work, ready for action, and able to get in a truck after orientation in days? wouldn't it be feasible to have driving teams 'waiting in the wings', especially if our model is working and we plan to expend the fleet? i mean, if our system does not work, then we'll quit after one truck and eat crow. but if it does work, then we'll add teams and trucks. so wouldn't it be reasonable to be interviewing teams and having a backup team ready to go?

 

[markwilson]

regarding gas prices, we are being told that price fluctuations really don't significantly affect the owner's take, since any increase in fuel is offset by higher charges from points above.

 

[cheri1122]

Mark: in this business, good teams are worth their weight in platinum - there are never enough to supply demand. I refer to long term teams, as in couples - makeshift teams are available, but they seldom stay together for the long term.
How will you succeed if you can't find a good team - will you try a makeshift team, or a solo, or just let the truck sit?
There's a lot of this business that you haven't considered, IMO, or that you believe will just fall into place, and the smart guys [DaveKC & Greg] are trying to tell you: it won't.

 

[greg334]

but isn't it true, though, there are many driving teams available?

NO. You really need to get out in the real world and see for yourself. I think the average time for a good fleet owner to find people to drive is like 21 days. Can you afford to idle a truck that long?

That does not include if you have to recover a truck or have to deal with legal issues over a driver leaving.

we know that driver turnover is a leading cause of owner problems/bankruptcy, but doesn't that also imply that there are ample numbers available?

Driver turnover in this industry is tracked?

First the leading cause of problems and/or bankruptcy for owners is not drivers, it is mis-management and unrealistic expectations. The amount of fleet owners who should never be in this business is amazing and out of those the percentage of them who are just plain d*mn lucky is still amazing.

isn't it true that there are teams looking for work, ready for action, and able to get in a truck after orientation in days?

NO again. To find, qualify and train a team takes time and an effort. To trust the company to do it is plain stupid. They don't give a crap if a driver takes out a street light or runs over a car with your truck, all they care about is fulfilling the insurance and FMCSA requirements.

wouldn't it be feasible to have driving teams 'waiting in the wings', especially if our model is working and we plan to expend the fleet? i mean, if our system does not work, then we'll quit after one truck and eat crow. but if it does work, then we'll add teams and trucks. so wouldn't it be reasonable to be interviewing teams and having a backup team ready to go?

OK I understand what you are getting at, but here is the thing the team's time is as important as yours. There are very few people who will want to wait in order to make money doing this unless they are desperate and need a job and those are the ones you really check out or pass on.

BUT understand this, everything you do or may want to do has been done before and there is no magic to it but hard work. Without the knowledge of what it is really like to be on the road and turning a buck, you may not get what is needed to do 70% of the right things to get your business to prosper.

regarding gas prices, we are being told that price fluctuations really don't significantly affect the owner's take, since any increase in fuel is offset by higher charges from points above.

Actually that is not true. Not all loads offer an equalized FSC and many companies don't really all give an accurate FSC that reflects the operating expenses.

The FSC is not always something that can be counted on to offset any costs. If the owner pays for fuel, it is still a direct impact to the net as much as if it was paid for by the driver.

 

[cheri1122]

but isn't it true, though, there are many driving teams available? we know that driver turnover is a leading cause of owner problems/bankruptcy, but doesn't that also imply that there are ample numbers available? isn't it true that there are teams looking for work, ready for action, and able to get in a truck after orientation in days? wouldn't it be feasible to have driving teams 'waiting in the wings', especially if our model is working and we plan to expend the fleet? i mean, if our system does not work, then we'll quit after one truck and eat crow. but if it does work, then we'll add teams and trucks. so wouldn't it be reasonable to be interviewing teams and having a backup team ready to go?

Seriously: if there were a team ready to work, do you think they'd wait for you to have a truck open?
I don't.
I think you're setting yourself up for a rude reality check, and I really hope you'll hold off on jumping into a business you just don't know enough about, yet.

 

[markwilson]

well, i don't think it is appropriate to respond to someone's inquiry by implying that that person is a fool, which we most certainly are not. if we were fools, we wouldn't be here, learning from those with knowledge; we would be blindly pushing forward into an abyss of debt.

personally, i respect all of the responses that have been written. i have been surprised that all of the notes have been written in respectful form, obviously written by intelligent people with experience.

as stated, we are young professionals with no experience in trucking. however, we have an invaluable asset in our friend who is making money with four trucks.

what we don't understand, at this time, is the disconnect that appears to have manifest here. One on hand, we have a plethora of experienced fleet owners telling us with overwhelming emphasis that chances are slim that we can succeed; on the other, we have a colleague who has been working for panther and has four trucks and despite the recession is making money.



simply stated, we are opportunists. we see an opportunity here. and yes, we do have a 5% interest rate offered (over 5 years) or 5.75% over 30. why is it so wrong that we are pursuing this? is there an unwritten rule in the industry to gently (or otherwise) nudge newcomers away, due to the concept that we would be competing for the same resources?
If so, then please tell us, and we will respect that and vacate this forum. If not, then we would like someone to explain WHY it won't work.

 

[markwilson]

thanks greg for your time and insight. we are, as stated, genuinely surprised as to the candor and foresight given in the responses, especially yours and dave's.

Would you be willing to share with us a summary of your body of work in the industry? years, experience, ups/downs, philosophy, etc?

 

[x06col]

In your previous life as a magician, and \/or your present life as a spread sheet expert you have had to become somewhat adept with the English language.

My question to you is......just what don't you understand about NO??????

These folks are attempting, beyond call of duty, to try and keep you from stepping on your crank. Why are you so dead set? Did your Bud tell you it feels good?

 

[markwilson]

you know, you'll all get a kick out of this:

actually, i'm not the spreadsheet/financial guy. my partner might/will be doing this.

i'm actually the guy to call with problems on the road.

 

[x06col]

Well then. Make sure you start anuther thread on down the road and let us know how it all worked out, And that the road problem guy and the spreadsheet guy are spreadsheeting and road probleming from your camping machine in the Keys...And your teams luv ya, an..........

 

[usafk9]

Please direct me to the truck manufacturer that makes equipment that lasts 30 years.

Better yet, please tell me what mortgage broker is charging you 5.75 on a cash-out refi.

Either way, you're getting hosed.

You have a ton to learn, Mark. Unfortunately, your learning curve appears destined to take a detour through yours and your partner's wallets. I hope your relationship survives this trip.

On the positive side, you came to a great place to learn.

Here's my humble and somewhat novice advice: how about sending a PM to a couple of the folks who have chimed in here and ask to pick their brain? Your guy might be a good source of info on his operation, but there are posters in this thread who will give you their views and what has or hasn't worked for them.

If and when you do pull the trigger, let us know how it goes. This place is a wonderful learning tool. Give us the good and the bad.

If you took some posters' words as terse....good. I believe they're trying to stop your trainwreck from happening.

My final thought: if you're thinking about pledging real estate to borrow into this business, don't. Not to say that other folks here don't have the discipline to do it and pay off quickly. You're a complete ROOKIE. Don't do it.

Hope I wasn't unclear. Welcome to EO.