I disagree with GMAN, fuel is #1 expense, not engine rebuilds.

 

I was referring to maintenance issues, Allan. Most people can handle the fuel from week to week, but cannot come up with $15,000 or so for a rebuild. But then, the way fuel is going up, you can spend that much on fuel in about 8 weeks. :?

 

I know GMAN, I was just giving you a hard time :P

 

I figured you were, Allan.

 

Is it likely that a lot of trucks going home for the holidays could cause the brokers to pay more if they need something moved?

I'm prepared to stay home for the holidays, but I'd go out after Christmas if the price was right. :wink:

jonboy

 

There is usually freight to be hauled between Christmas and the first of the new year. There could be more delays in finding a good load, but if something needs to be moved then they will pay what is necessary. Some companies must pay a tax on any inventory they have on hand the last day of the year. That is one reason some don't want to have a lot of product on hand until after the first of the year. There are some who will ship freight and arrange for it to not deliver until after the first of the year. That way some can avoid the tax on both ends. :wink:

 

Its always funny how the term Investment gets contorted beyond meaning in the automotive context. Show me one shipper that will pay and extra dime to have their product moved by a Pimped out Peterbilt or Western Star versus a no frills International or Freightshaker.

Aftermarket frills like extra chrome, exhaust stacks that are big enough to be a water main and enough clearance and marker lights to illuminate a stadium are just $ down the drain. Thats $ that could have gone to better uses like preventative maintenance, a breakdown reserve, the owners retirement fund, etc etc etc.

You can't eat Chrome.

 

I agree with this only if you are doing this stuff ahead of running your business and causing yourself problems. If you are out there doing real good and can afford some bells and whistles, why not make it look pretty and be proud of your ride as long is it isnt eating at your business and keeping you from making it out of the red.

 

Stuff like this I was talking about before when I said that I wanted to understand the market forces behind what drives these rates beyond supply and demand.

So I googled it and found the following on the IRS website:

Valuing Inventory

The value of your inventory is a major factor in figuring your taxable income. The method you use to value the inventory is very important. Generally there are two methods for valuing inventory. These methods are cost or lower of cost or market.

Cost Method

To properly value your inventory using the cost method, you must include all direct and indirect costs associated with it. The following rules apply:

For merchandise on hand at the beginning of the tax year, cost means the inventory price of the goods

I got a little confused though reading this, hurt my head ops: ; we need No_worries to explicate this.

Very interesting though and thanks for bringing that up GMAN

 

Simply put, businesses must pay taxes on the value of their inventory on hand at the end of the year. As stated, they can use one of two methods to value that inventory. Most business value inventory based on cost since it most often gives the lowest value and therefore the lowest tax liability. The exception is businesses that are in markets that fluctuate wildly (think fuel).

For the purposes of freight movement, businesses try to end the year with as little inventory on hand as possible. This also plays out on a monthly and quarterly scale, but for slightly different reasons. As freight haulers, we are less concerned with the retailers' inventory than we are the wholesalers' or producers'. This is because most retail outlets are too small to need truckload service. However, the shippers move product in quantity and are often the ones picking up the freight bill. So that's who we concern ourselves with. Shippers don't want to have inventory at the end of the month or the quarter, not so much for tax purposes, but in the interest of keeping their financials looking good. Inventory on hand means sales were slower than expected and nobody wants to see that, even if they sell at a loss. This is why the end of the month and, more importantly, the quarter are often busier freight times. So, when planning to take time off, it is often advisable to do so at the first of the month as opposed to the end.