Your Company Doesn't Care

[Humble2drive]

. . . Remember, it was your decision to buy your reefer. They are becoming a casualty because of the high purchase and operating costs. The freight simply doesn't match the amounts that are out there. One can still survive, but in a limited market, you had better saved your pennies from years past or it is going to be a rough road.
Pretty much why I discouraged the purchase of the reefers over the last several years. Doesn't mean you can't survive, it just means much less margins.
The load you decide doesn't meet your requirement at say, 1.40, I am the guy without the reefer that will grab it.

I always make a point to read and learn from your excellent posts; however, this one just doesn't seem to make sense. I can only assume that you are speaking about Panther.

My wife and I refer to our reefer as our "money tree". The reason is threefold:

1) We are able to haul high value products such as pharmacueticals, artwork, electronics and chemicals at premium rates.
2) Our wait time is reduced. We often leave an express center ahead of other trucks with more dwell time because we are the only reefer.
3) We can confidently accept loads going to slow freight areas. We have gotten out of areas such as Denver, Los Angeles, Seattle and Miami in front of other teams who had been sitting there for days.

Not trying to be argumentative regarding this topic, just very surprised to hear your point of view on this. The first advice we ever received on this site was to make sure that we had the most credentials and equipment options possible.
We followed that advice and made sure to have Hazmat, DOD, Fast pass, reefer, liftgate, push axle, WG etc. etc. and that all seems to be paying off now.

I can only speak about our experience with Fed Ex WG D-unit because that is all we know. Panther may be different and E-units may be different. Just wanted to share our experience so the EO members get all points of view.

 

[davekc]

I am only speaking of reefer loads, and I look at loads from ALL of the carriers. Not anyone specific carrier. Without a doubt, a truck that can do DOD, Canada, surveillance,hazmat and the like will certainly benefit.
Those requirements don't need a reefer.
All I look at is the return percentage.
As already mentioned, those numbers don't stack up.
I believe Steve found the same thing with a tractor and he is still at the Fed.
Again, there will always be exceptions, but I look at figures from numerous carriers and sources to get to that number.
If one can show me something different, I am all ears. Make no mistake, there is a reason they have a lock on letting new reefer trucks into WG at the Fed. It isn't because they refuse to make money.
Just remember, just because it was the first review doesn't mean it was the most accurate. You may have been drawn in by the pomp and circumstance of the time. Want further convincing? Likely won't find a truck dealer that has a expedite reefer truck sitting on the lot to sell. Why? They are looking at the same numbers I am and realize the return is not in that acceptable ratio for return.

 

[Humble2drive]

I am only speaking of reefer loads, and I look at loads from ALL of the carriers. Not anyone specific carrier..

I am extremely impressed that you have access to the actual financial data of each carrier regarding the number of reefer loads they dispatch and the exact rates and miles that are involved. Please pm me and share how one person can obtain all that privaliged info or share it with everyone if you can.

Without a doubt, a truck that can do DOD, Canada, surveillance,hazmat and the like will certainly benefit.
Those requirements don't need a reefer...

If I could only keep one thing it would be the reefer.

Again, there will always be exceptions, but I look at figures from numerous carriers and sources to get to that number. ..

Again, what figures are these? What carriers can you obtain these figures from? Can the average human do this? Information like this could be a very valuable tool for all expediters to have.

Likely won't find a truck dealer that has a expedite reefer truck sitting on the lot to sell. Why? They are looking at the same numbers I am and realize the return is not in that acceptable ratio for return.

Huh??
If you are talking about used trucks. They would not be available because people are not trading them in.
If you are talking about new trucks. The reefer package would be something that you spec out and add when you order it.
If you are correct that the sales managers at all the truck dealerships are looking at the same numbers that you are. Again, where are all these numbers being published. Am I the last one to know?

 

[TeamCaffee]

We are in a dry box at FCC but most of our friends have a reefer most are WG and a couple are just in Express. I am constantly amazed at the load offers they receive for the reefer. I can only speak for FCC but to have a reefer over here is one of the best ways to go. Compare settlement sheets and it should become quickly apparent. FCC has a LOT of refrigerated freight.

We do not have a reefer nor do we plan on buying one at this time. We have a dog and we do not want the hassle of the reefer or the expense of a reefer as we cannot get into WG. That is just a personal decision but at the end of the year our settlement sheets are much less than a refrigerated unit including the new BR unit I am guessing. We still do pretty darn good with what we have and we enjoy hauling freight where you cannot have a reefer.

 

[layoutshooter]

We are a TVAL White Glove truck. We have all the "tickets" you can get. D.O.D., hazmat, art etc. At least 30% of our work is reefer. Most of those loads pay very well. My hazmat work is down but I think that is due to the increase in government and art loads. We bought our truck used, a repo. It only hat 145.000 miles on it and we got it for less than a new straight non-reefer truck. For us it is working out. We are moving well when we are out. We often get out of a crowded express center ahead of trucks that have way more dwell time than we do. We feel that the reefer, along with all the other qualifications are keeping us running. As the old saying says, "If the wheels ain't turnin, you ain't earnin" Our wheels are turnin so far this year. We shall see if it continues. Layoutshooter

 

[davekc]

There is no secret where to find the information. Numerous load boards all the way down to Getloaded show the average price of a load and what it bid at. One can also go to the Fed, 3PL's or Panthers bid board and do the same thing. Many on this site have access to either one. Again, hardly a secret. One can also go and look at default ratios that are available from ICT, Wells Fargo and a few other places. It won't be exact in every instance, but one can get pretty close. That isn't takining into account the reefers we have had in the past at two different carriers. Rates haven't changed that much over the last several years. Actually, more down than up lately.

Three or four years ago, every expedite dealer had a reefer truck on there lot ready to go. I would be suprised now if you can find one. Again, there is a reason. Has nothing to do with specing a truck.
Most used one are taken back by the finance company and sold at auction. Dealers don't want them unless they can get them cheap.
I don't think anyone would argue that the gross is usually higher on a reefer. That is much different than what the return off of one would be. That is more my point.
Layout has the right approach. If one is to jump in, I wouldn't advise a high dollar investment. Buying one as a repo will give you a much better return. There are plenty of these that have repoed so they are fairly easy to find. I am seeing now on some of the repoes that they are stripping off the reefer and outfitting them a little different in order to move them. Fort Wayne auction is the place that comes to mind on that.

 

[layoutshooter]

The return on reefers will change from time to time just as the return on any truck. If the trend of fewer owners buying reefers continues it will make our reefer worth more. If the market is suddenly flooded with reefers it will be worth less. As in any business, the more you set yourself apart from the crowd the more you will work. Generally speaking of course. Layoutshooter

 

[davekc]

The return on reefers will change from time to time just as the return on any truck. If the trend of fewer owners buying reefers continues it will make our reefer worth more. If the market is suddenly flooded with reefers it will be worth less. As in any business, the more you set yourself apart from the crowd the more you will work. Generally speaking of course. Layoutshooter

I totally agree. A year or two from now, it could be totally different.

 

[layoutshooter]

I do expect our reefer loads to increase over this year to around 35-40% of our work. That is if the trends we were seeing last year before the hurricane did us in continues. I like temp control work, so far at least our profit on that work is much better than non-temp control work. That is taking into account all costs of the reefer. Layoutshooter

 

[piper1]

I think dave's point is don't rush out and buy a reefer expecting it to be the cure all for the current state of the industry.

You folks with the pro reefer comments are doing well because you are smart expediters, the reefer is just helping you. You have had time to become experienced with the ins and outs of reefer freight and the units themselves. It is not a "simple" step to take. A newbie might sink with the added requirements of a reefer. If I was a fleet owner, don't know if I'd want the things. When you drive and own the truck you tend to take better care of the fussy things (like a reefer).

 

[layoutshooter]

I agree Piper1, I am picky about my care of the reefer etc. I wonder though, and it is just thinking out loud, would it not be possible as a fleet owner to attract a better grade of drivers with a truck that has the potential for higher revenue? Layoutshooter

 

[davekc]

That is exactly what I am saying. Since I am a fleet owner, I just look at the numbers.
Some are my own, and some are others. We have also had the opportunity to look at other fleet owners numbers recently that are trying to sell their fleet.
For easy figuring, a basic new dry van can be had for say 100k.
That truck will run at 1.10 to 1.40 as a average.
That same truck as a reefer with higher operating expenses will have to do significantly higher continuously to maintain the same dollar margin. If it is a 160-200k truck, that truck has to continually run over 2.00 per mile just to be a par with a dry van. That is not even looking at the higher maintenance and extra downtime because of the reefer.
Some of this has been gone over in many other posts so I don't want to beat that into the ground. As to whether it brings a different type of driver, I wouldn't say it does.

 

[ATeam]

Don't see many supporting your thought now. Just as I indicated over several years. Show me a margin anywhere that is equal or greater, then I might change my mind.
Not some goofy exception.
At this point, not seeing it based on any industry reports.
I think I am doing the new folks a great service by advising them to shy away from any high dollar reefer vehicle investment at this point in time.

Dave, I am not out to change your mind. Clearly, it is made up.

I have no access to industry reports regarding expediter reefer truck performance. If you do, many readers would read with great interest what they have to say.

Not for you, but for interested readers, I will lay out why I believe a reefer-equipped truck is not the losing purchase some suggest it is.

1. Any truck can be a losing purchase depending on a host of variables, including the business skills and work ethic of the owner-operator. So any suggestion that a reefer choice is better than a dry-box choice that is based on what one has heard or claims to be true should be taken with a grain of salt (including what I offer below).

2. My personal experience is that a reefer-equipped truck can be a profitable purchase. I know this from our numbers. The numbers are not a result of a "goofy exception." They are the result of hard work, good business practices and good money management.

3. I am personally acquainted with a fair number of reefer truck owner-operators and fleet owners, and well acquainted with some of those. I speak to these people on a regular basis about business. I do not know of a single one that has decided to get out of reefer trucks, except TallCal, who got out not as a loser but because he wanted to get out ahead of the game. Since then, no one I know has dropped out of the reefer business.

4. I have asked. No one the above people know is personally aware of anyone that has gotten out of reefer-equipped trucks.

5. You often cite the EO classifieds to support points you make about what is going on in the industry. I do not consider them to be an accurate indication, but taking a look, I just went through the first 55 for sale ads, sorted by year with the newest trucks listed first. How many reefer trucks are for sale? Zero.

If you have objectively verifiable evidence of expedite reefer trucks going up for sale at a rate greater than dry-box trucks, it would be a service to readers to offer it. Emphasis on "objectively verifiable." Can you point me to even one reefer truck that is for sale because that business approach failed in these hard times?

If so, I will gladly accept it as needed awareness on my part. The seller may also want to contact me as I now a bunch of people who may wish to buy the truck.

 

[davekc]

I never said they were crashing faster than dry vans. The percentage of dry vans compared to reefers is huge. There aren't that many of them out there.
I also didn't say you couldn't make money with them. I am simply saying they aren't as good of investment dollar for dollar with all things equal. Nothing complicated.
I don't think now is the time for someone new to make that huge of a investment.
When I see dealers start to carry them in their inventory, then you know there is a market.
BTW.....Phil, just a quick glance on EO classifieds show a W900 for sale just a couple of days ago. It is on the first page. Apparently you don't read very well.

 

[nightcreacher]

Dave,I dont know the figures of the DR units,I do know most of them make much more than a regular D unit and the extra expense is well worth it.My experiance is with the trailer,and because of the extra weight You loose to many loads.I'm getting loaded ahead of guys because I can carry the extra weight,but I do know in the winter a reefer will saty busier than a dry box

 

[davekc]

I would agree with that. But they have to run continously at a much higher rate to carry the same numbers. If they do, that is great. I have never seen it with other trucks, and I certainly never seen it with the ones we had owned in the past. My investment dollars have always went farther on a dry van than they ever did on a reefer truck. The reefers certainly grossed more, but that was much different than what I was keeping.

 

[SBBExpress]

As a matter of fact, my company cares very much about my success. .

I have to disagree Charles, if your company cared so much they would not continue to activly recruit new contractors. Also, they would not bid loads they expect you to run for less money than you can run them for and still make a profit.

 

[Runner411]

So it looks like you guys have officially hijacked this thread and turned it into the good ole reefer vs. dry debate again.....sigh

 

[davekc]

I have to disagree Charles, if your company cared so much they would not continue to activly recruit new contractors. Also, they would not bid loads they expect you to run for less money than you can run them for and still make a profit.

Ok...back on track. CharlesD's company cares because he is the company. He isn't leased to a carrier. Your point is well taken though, thus a reefer debate of sorts took off. Your situation is what I was really responding to on the investment side of things. Sorry for the derail.

 

[Runner411]

Well I don't do a lot of posting, just a lot of listening over the past year or so as I am new to this and my company is smaller. I think a lot of this debate comes down to how large or small your company may be. IMO, a company where you may be 6th or 7th in line somewhere may be less concerned with losing a truck compared to a company that may only have myself and maybe another truck at the most waiting to run.

Not wanting to again sidetrack to the old debate of small vs. large, but I think it helps a lot when you know your team well and youre not just a truck on a board. If you develop a relationship with your company I think smaller companies have a lot more pride (and investment) in their drivers than a company who has orientation twice a week.