A Husband And Wife Trucking Journey

Topic 19008 | Page 10

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Brett Aquila's Comment
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Unfortunately, some of your financial comparisons would imply that the business end of things may not be your particular forte.

LMAO!!!

wtf.gifrofl-3.gif

That was literally the first thing I read after I woke up this morning. My Keurig hadn't even warmed up yet and I was laughing so hard I was almost crying. That is fantastic.

I'll just throw it out there that I've been a business owner for 14 years now, and I've been in the trucking industry for 25 years, and the last thing I would ever do in the business world is buy or lease a truck. But don't worry Larry, I certainly don't know any more about business than Old School does. I don't have half the experience in business that he has.

there was a fairly GQ looking older gentleman, an owner-op, with a beautiful cherried out truck there getting his new Mack-daddy CB installed

In the end, this is always the reason anyone buys a truck. They dream of being that sharp looking guy with shiny gold jewelry and that decked out rig, making the big bucks, and bragging to all the guys at the truck stop. I'm certain that 95% of the people who become owner operators wouldn't do so if by law they were required to drive an ugly rig and tell everyone they weren't making much money.

“When dealing with people, let us remember we are not dealing with creatures of logic. We are dealing with creatures of emotion, creatures bristling with prejudices and motivated by pride and vanity.”

― Dale Carnegie, How to Win Friends and Influence People

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Grumpy Old Man's Comment
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In the end, this is always the reason anyone buys a truck. They dream of being that sharp looking guy with shiny gold jewelry and that decked out rig, making the big bucks, and bragging to all the guys at the truck stop. I'm certain that 95% of the people who become owner operators wouldn't do so if by law they were required to drive an ugly rig and tell everyone they weren't making much money.

That is exactly what I was thinking.

I've currently been in business 12 years, before that managed a medium sized business with around $1.5 to $2 million per month revenue for 10 years, before that ran another successful business for 5 years.

I left none of these businesses because they were failing. My wife says she thinks I get bored, maybe she is right. The last 2 I just couldn't force myself to do any more, the first I saw that I would be so banged up I would be in a wheelchair before retirement (construction). While starting my current business, I worked as an independent contractor selling fences, making over $50K, working from 7 AM to 12 PM, then running my business in the afternoon.

None of this to brag, but to say I'm not an idiot. There is no way in he** I would ever own or lease a truck. I think if you are a good business person, you can make money doing it. But I don't think you will ever make enough from a single truck to be worth the headache, stress, and worry for it to be worth it. With a fleet of trucks, maybe, and with a small fleet, it is still a big maybe.

If the huge mega companies out there are making 5% net, with the discounts their purchasing power gets them on things like fuel, tires, parts, insurance, and so on, how would you compete with them? Especially when you're losing 15% off the top (after you are self dispatched) before you even start? That 15% is probably all the profit, or the major portion of it, at least.

63% may be attainable, but it probably won't keep your business afloat. After all, if you are starting at $.30/mile, and go to $.49 (as an example), that is a 63% increase, but it will never pay for expenses and taxes. Let alone replacing a $150,000 to $200,000 machine every two to three years. Going from $125,000 to $243,000 after all expenses? Sorry, I just don't see it.

On $243,000, the FICA tax alone is $15,921.60. MFJ tax tables show the Fed tax withholding is $46,900. Add state tax if any, unemployment insurance, workers comp, health, vehicle, and business insurances, and on and on. Sure, you will have deductions that will lower the federal tax, and possibly the state tax, but it will still be a huge chunk if it is legitimate, and if not, you may well be subjected to an anal probe by the IRS at some point. And if one of you gets hurt and is disabled? You better have really good disability insurance, because most self employed people are not covered by WC, and if you get hurt off the job, you definitely aren't. I know, I just went through that.

I wish you luck. I would love to see the real, honest numbers after a year.

I'll say it one more time. Why would any trucking company give up their profit to an O/O, rather than simply hire another company driver? They pull their profit right off the top, and in addition, save all the costs of having an employee. That is why we have a "gig" economy, it's why every company would prefer to use contractors. Grab the profit off the top, and have zero liability.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

DAC:

Drive-A-Check Report

A truck drivers DAC report will contain detailed information about their job history of the last 10 years as a CDL driver (as required by the DOT).

It may also contain your criminal history, drug test results, DOT infractions and accident history. The program is strictly voluntary from a company standpoint, but most of the medium-to-large carriers will participate.

Most trucking companies use DAC reports as part of their hiring and background check process. It is extremely important that drivers verify that the information contained in it is correct, and have it fixed if it's not.

Brett Aquila's Comment
member avatar
I would love to see the real, honest numbers after a year

Or even better, I'd love to see the net result after 5 years.

What happens after the first 2 or 3 years when it's time to turn in that old, beat up truck that has had some major, expensive breakdowns recently and you now have to put the down payment down on the new one and start making much bigger payments?

You've also had all sorts of things go wrong over the years - major breakdowns, illness and injury, fluctuations in the economy and fuel prices, tough winters, the loss of some great paying freight (nothing lasts forever), and of course 5 years of relentlessly grinding out big miles from coast to coast.

Looking at the big picture after 5 years will truly tell the story.

Robert D. (Raptor)'s Comment
member avatar

Larry-

I have enjoyed your story until you said you want to be an owner/operator. I'm not going team but the story was great until........

A lot of people here have run companies before, and have chosen to be company drivers. WHY don't you think about it more carefully?

I drove for 11 years before my accident and I am returning to the life I loved. WHY would you want ALL of the headaches of an O/O? Really think about it. Old School is giving you the best advice he can. And I feel you have not given the same respect he deserves.

This is my take on your next journey. Squelch it! Until you can talk to guys that are doing it coast to coast, consistently. See if they will show you their numbers.

The company I worked at had a fleet of Fuel Tankers (150). Two of us were get a new sett of steer tires each, think that's cheap? One of our new ones had only 45,000 mile on it and had to replace the the differential. THINGS HAPPEN TO TRUCKS THAT ARE NOT EXPECTED!

OK, You do what you want. It's your life.

But I was really enjoying you're story until.....

DAC:

Drive-A-Check Report

A truck drivers DAC report will contain detailed information about their job history of the last 10 years as a CDL driver (as required by the DOT).

It may also contain your criminal history, drug test results, DOT infractions and accident history. The program is strictly voluntary from a company standpoint, but most of the medium-to-large carriers will participate.

Most trucking companies use DAC reports as part of their hiring and background check process. It is extremely important that drivers verify that the information contained in it is correct, and have it fixed if it's not.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Larry K.'s Comment
member avatar

Gentlemen,

Far be it from me to give the impression that I am in any way blinding myself to some good advice based upon some emotional desire to be a hotshot truck driver as I assure you that is not the case. If it were I’d be out there looking at some shiny new Peterbilt rather than the boring old used trucks that make financial sense (or seem too) but are nothing to run around showing off. I am also well aware that the prevailing sentiment on Truckingtruth is to absolutely and unequivocally stay the heck away from going owner/op and stick with being a company driver. The question is...Why? And I don’t mean “why” in the sense that I’m looking for “just don’t do it, it sucks, you’ll go broke”, I mean “why” as in where, specifically, are my numbers so far off base. So I’m going to make a few observations/inquiries and please, don’t take it as an insult to anyone’s intelligence but rather an inquiry to you experienced guys from a guy who’d genuinely appreciate your insight.

1) I have to assume that if you gentlemen are so adamantly against going O/O that you have been there and done that. If I’m correct and that is the case then it means that at one time you felt it was worthwhile and you could make a decent living as an O/O and that upon doing so you found out otherwise. So my question would be this: After becoming an O/O what, specifically, turned out to be the error in your initial thinking? Meaning, when you thought it made financial sense you were failing to account for . Please, tell me your story (or refer me to where you’ve already told that story). Incidentally, it would be nice to know which of you have/have not been O/O’s yourselves.

2) We meet O/O’s all over the country who clearly don’t have a pot to **** in. That being said I’m pretty sure it was on this forum in which I learned of the term “terminal rat”. Much like the the numerous company terminal rat’s we’ve run into we can often talk to one of these clearly under achieving O/O’s and within a short period of time determine that it’s really no surprise that they are failing. (Many are leasing a truck from the very company they are driving for and calling themselves O/O’s) On the flip side, we also run into numerous O/O’s that appear and claim to be doing pretty dang well for themselves, and have been for many years. Now, as stated not far back in the thread my wife hates doing the forum/blogging thing, but she has read your comments regarding the anti-O/O sentiment and is asking “WTF? It’s as though they are convinced that it’s impossible to be a successful O/O!”. So my question is this: When my wife is standing in some truck stop laundry room talking to a woman who is telling her stories about running O/O for the past 20 years with her husband, and that woman is showing her pictures of her grandkids at her nice home on 100 acres in Kentucky...are we to assume they are full of it, lying to us, attempting to save-face, and secretly they’re living off some family trust fund?

3) Ultimately, it all comes down to the numbers. If your sentiment that one cannot make money as an O/O is accurate (meaning above and beyond that of a company driver) then it boils down to one of two possibilities. Either I am WAY off on the cost of operating the truck OR the freight rates are too low to support the cost of operation and still turn a decent profit. That being said most costs or fixed or at least semi-fixed in relation to miles run. (Truck pmt, insurance, fuel etc. can all be projected with reasonable accuracy) The big wild card is of course the maintenance budget (or again, some major expense I have completely and utterly overlooked). My question then would be: What budget, expressed in terms of cpm , would you say is a reasonable projection? I know it varies greatly, obviously. What I’m looking for here is experience. “I ran a for the past three years and when all was said and done my maintenance expenses worked out to over the past three years.”

Here’s the thing. If you think I’m one of these individuals whose lifelong dream was to be a truck driver to the point that I now have such an emotional need to own my own “sweet” truck that I’m willing to blindly walk into an impending bankruptcy...you’d be incorrect. I enjoy driving truck OTR , but the reality is it’s just a job to my wife and I. That being said I’m failing to see where your dire warnings translate into actual numbers. Furthermore, this is the internet. I love this forum and enjoy reading each of your posts (“your” referring to some of you who have commented specifically). That being said, for all I know I’m talking to handful of guys who utterly failed at running their own businesses or have corporate interests in dissuading company drivers from branching out on their own. (Again, no insult intended and I reiterate the “for all I know” and “this is the internet” part. Which I’d imagine you each could understand.)

Terminal:

A facility where trucking companies operate out of, or their "home base" if you will. A lot of major companies have multiple terminals around the country which usually consist of the main office building, a drop lot for trailers, and sometimes a repair shop and wash facilities.

OTR:

Over The Road

OTR driving normally means you'll be hauling freight to various customers throughout your company's hauling region. It often entails being gone from home for two to three weeks at a time.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.

OWI:

Operating While Intoxicated

Larry K.'s Comment
member avatar

Well that didn’t work! I put some “instert truck specs here” and things of that nature that were bracketed by “<“ and “>” which failed to post due to being interpreted as html tags. Hopefully you can figure out what I was getting at and read between the lines.

Brian's Comment
member avatar

Hey Larry,

Some of the points that you brought up in that last response were exactly the ones I was trying to raise when the owner operator math podcast came out. I applaud you on that, and you taking the time to share your journey. And hopefully you will continue to share it on your journey with your wife as owner operators. Because I also believe there are successful owner operators, and sounds like you have an understanding of what it takes to be one as well.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Grumpy Old Man's Comment
member avatar

I am not an O/O, nor even a driver yet. But I am a businessman. But I do know a couple who went bankrupt.

With economic activity strengthening in 2017, the average marginal cost per mile incurred by motor carriers increased six percent to $1.69. Cost increases were broad-based in 2017, with growth in nearly every major line-item over the year. Driver wages increased for the fifth consecutive year and the combined cost of driver wages and benefits represent 43 percent of the overall cost per mile.

Operating costs per mile

According to the American Transportation Research Institute (ATRI), the 2015 average cost per mile was $1.59. The total costs, when combined with the average miles driven, was $128,580.12. When there is a set number of costs associated with operating a trucking company and future profits are unknown, it begs the question, is trucking profitable?

The answer is, it could be. It all depends on how you run your business.

Starting and managing your own trucking business is hard. In an industry where only 15% of newly formed trucking companies make it to their second year of operation, according to the National Association of Small Trucking Companies, running a profitable trucking company can seem impossible. But the truth is that the rate of small business failures has been decreasing steadily for 30 years and that there are a ton of tools out there to help you run your trucking company and make money while doing it.

Profitable? Maybe

0148763001538940354.jpg

So, yes, it is possible, but extremely risky. Is that risk worth it? Not to me. Not when a good team could make nearly as much with zero risk.

Robert D. (Raptor)'s Comment
member avatar

Larry-

I'm not an O/O or a Mole for any Trucking Company. I have never owned my own business or wanted to. But I have had friends who were O/O and they made adequate money. They were getting by, maybe things have changed. How can you compete with a Mega Truck Company? I wasn't trying to be an a**. Just think about it before you jump both feet in.

And if you still want to do it, good luck to you and the Mrs.

Brett Aquila's Comment
member avatar

Grumpy Old Man, that was an awesome reply and super helpful. Where did get that information in the image? I didn't see it in your links.

Man, those numbers in that image are grim to say the least.

What kills me that they use the word "Salary" to describe an owner operator's revenues. Salary and revenues are not the same thing and that confuses a lot people. In fact, it confuses people who don't understand the business world very well, which is the majority of people who lease or buy trucks in the first place.

A lease driver in a conversation the other day used the word "Paycheck" to describe his revenues. I've also heard a lot of people describe their revenues as the money they "bring home".

All of that wording makes people think they're going to make a lot more money than they really are. I wish they would stick with the word "revenues" when describing revenues.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
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