So, I'm 26 years old and I got my CDL shortly after I turned 21. Since then I've driven all kinds of commercial vehicles, from school buses to city buses to ambulettes and about a year OTR with a large company. Ended in a way typical to many company drivers, just wasn't getting the miles that I needed to eat and still make spending months away from home worth it. I've been going to college for a little while now and i've almost completed my associates degree just by living off and paying tuition out of subsidized/unsubsidized govt student loans. Its simply not enough to survive off of and i've been wanting to get back into trucking for some time now and thats what I'm currently in the process of doing.

I've done a huge amount of research, have a reasonable amount of money saved, and next week I plan on forming my LLC and applying for my authority. I have a company that needs container loads pulled into a port approximately 120 miles from the destination and they've agreed to pay me $525 a load plus 30% fuel surcharge and 80% tolls. I've pulled containers from the same shipper to the same port several times before when working for a small O/O so I'm familiar with the route and all phases involved with the shipper and receiver. I'm going to book 10 loads a week from them and hope to be able to do 2 a day M-F and make up any work on the weekend that I didn't have the time to complete through the week days. If I actually do 10 loads a week for a month at $525 a load then that will come up to an approximate monthly gross of $21,000.

I can't think of a single reason why all of that wouldn't sound good, right? But ofcourse after all of that comes expenses. I've gotten quotes from several insurance companies. Progressive quoted me at $12,600 a year (what a joke) and then following advice from posts on here I contacted OOIDA. They quoted me at $4,600 a year. And then of course theres the truck and thats where I begin to feel a little unsure about this. I have pretty ****ty credit and the only places I'll be able to lease from are one of those shady little places that don't do a credit check and you end up paying an enormous amount for trucks that "have an average of 900k miles". I contacted just about all the big lease companies that were on 5 pages worth of search results and the last one I called was Penske. According to them, they can't lease me a truck until I have a years worth of business credit, BUT, they would be willing to contact a terminal near me and talk to them about doing a long term rental until that time comes. Of cours at first I didn't think that was the best idea but I decided to hear what they have to say anyway. Basically the price of the truck (late model, good on fuel) comes to $350 a week plus 13 cents per mile after 100 miles daily. So when all is said and done that will be $2,450 a month for weekly payments and CPM at an approximate 500 miles daily. Ofcourse a lease would be much, much less than that but of course I won't have to worry about any kind of huge repair expenses while renting a vehicle and considering it's a newer model truck it'll have much better mileage than any lease I could get.

I could carry on about all of the other expenses that we all know I'll incur but you all know what they are. I also already have my TWIC card. This is the basic jist of my business plan and I'm just looking to see what your opinions are. I see how many people on this site go from posting "thinking about getting my own authority" to posting about their experiences as an O/O so its clear that a decent number of people on this site have had success. Well, at least the ones who didn't drink paint when they were little.

 

I think that it would be best for you to find a company job, save your money, clean up your credit or wait until you can have a good down payment and cash in the bank or pay cash for a decent used truck. I would not want a payment of more than $800-1,000/month at the most. I have picked up and delivered at ports and you can get tied up and kill a lot of time. I find it best when doing projections to under estimate revenue and over estimate expenses. I think that it may be difficult for you to generate the revenue you posted, especially starting out. What if you can only do one load a day? What if there are no loads? What will you do? Do you have a trailer that you can use to haul other freight? What if you need to deliver to a consignee that needs to live unload? If you plan on getting your authority you need to plan on buying a truck and trailer. If not, your options will be sevierly limited. To be honest, you have little experience, little money and poor credit. That is not a good way to start any business. If you want to achieve success in business it is usually best to have some current experience and enough capital to get started. The unexpected can and will happen. Unless you are prepared you will likely find it difficult to survive. If your experience has been within the last 2-3 years you may find a company position with a carrier. You may also be able to lease to a good carrier. If your experience is older then you may need to find a carrier that will either put you with a trainer for a few weeks or take a refresher course in order to get started. But, unless you can buy a decent truck you will still not be any better off. If you have enough money to pay down you may find more suitable financing, especially with more experience. Lenders place a premium on your level of experience.

 

First, I have experience with the shipper and they have containers going to several ports and I can book as many loads as I can take on. Theres also another shipper in the area who has container loads going to the same destinations but the one I spoke of is simply preferable. Second, I'm not starting out with absolutely no money, just not enough to be able to go out and buy the kind of truck that I'd like. All of you carry on about "90 to 120 days of operating capital" but I would really like to know how many of you had that or were even relatively close to being capable of getting that kind of money together. I understand that you guys see tons of people come on here with some "dollar and a dream" kind of bull**** but I'm not that kind of guy. I've never been the kind of person to make impulsive decisions and I always take my time thinking things through. I understand entirely all of the expenses involved, I have experience driving OTR, I have experience working for another O/O pulling containers out of the same shipper to the same destinations. Obviously rental isn't ideal, obviously ideally you would like to have an enormous bank account to start out with, obviously every one of us would ideally want to live in a perfect world. The key phrase is "start out with." You have to start somewhere. I probably wouldn't try to do this if my situation in the beginning would be permanent, but it won't be. Its simply a matter of making do to make something work, improvising.

Anyway, any advice you guys have other than "don't do it" would be appreciated.

Thanks

 

I don't believe that I said "don't do it", but I would not do it myself. The truck payment is much too high starting out. You have apparently already made up your mind and only want advice from those who agree with you. If you want to do it then no one will stop you. Successful people look at more than one side to a business decision. Some of us did start with money in the bank to run us before we ventured out with our own authority. I started out by saving enough money to pay cash for my first truck and trailer. Others have done the same thing. There have also been those who started out on a shoestring and made it work. Those are in the minority. I don't know much about you other than what you have posted. You only have about a year of experience and part of that is working for an owner operator. That is not much experience and things are different when you are the one who is responsible for paying the bills and finding loads. I wonder if you have considered whether you can make it with only one container per day? I have hauled containers and with few exceptions the rates are not that great. I have hauled them when the rates are good. If didn't mention whether you would need to furnish your own trailer or have access to one from the shipper.

 

i have considered the possibility of only being able to do one container a day. Of course that would be the worst case scenario but you're righ when you say that its necessary to be prepared for the worst and low ball your expected income. If I was only able to do one load a day five days a week for an entire month I would still bring home a little over one thousand a week and thats with high balling all of my expenses. As for the containers, they're all loaded and waiting for you when you get there. I'll be doing weekly bookings and they do settlements twice a week. If by chance the work dried up and there was no loads theres another place I can get containers from and bring them to the same port, its all drop and hook. I also do have access to a trailer if for some reason there were no loads available from either. The owner operator I worked for is also able to book me loads in the event of not being able to find any myself.

 

It is important to keep expenses down, especially starting out. If you take your time you should be able to find an older truck that is in good shape for under $20,000. Sometimes, you can find an older truck that has had an overhaul and other repairs before the owner decided to sell or trade it in on something newer. You can find some junk, but there are also some good buys if you keep your eyes open and take your time. Just because a truck shows high mileage doesn't necessarily mean that it is not in good shape or had major work. If the owner doesn't have the paperwork you can always run the vin number or engine serial number to find what has been done. If work was performed at an authorized dealer it should be very easy to document.

 

The hardest part of the trucking business is the sales end; that's why the vast majority of O/O's are leased to somebody. You've done the hard part already; securing the freight. The operations part is easy. Renting a truck is actually a good way to go in the situation you've described. You know what you're revenue per load will be and you know approximately what most of your fixed costs and your biggest variable cost (fuel) will be. You still don't know two huge parts of the equation; what your vehicle maintenance will run you and, most importantly, how many loads you'll be able to do. With a rental your maintenance is taken care of (your physical damage should be too). Also, if for some reason your freight dries up or you just can't get in the number of runs you'd hoped, you can terminate the rental agreement with no penalty. Too many people think that the most important thing starting out is to have low expenses; they're wrong. The most important thing is to have stable and predictable expenses. If you know what your costs are going to be, you can plan accordingly. Even if your costs are going to be high, you know where your revenues have to be. If you can't get them there, you don't start the venture.

Your numbers pencil out. You'll most likely net less than you would if you owned your equipment. However, the flexibility that you gain, along with the time to prove the predictability of your revenue stream before making a capital investment, is worth far more than the forgone profit. If in 6 months or a year things have worked out like you hoped, go buy the truck you want and settle in for the long haul.

 

Thanks for the advice no_worries, I appreciate it. I formed an S-type corporation a few days ago and tomorrow I'm going to be calling OOIDA to get my authority. I've actually decided to just go ahead and buy a used truck. I know its a risk and theres lots of unforseen costs for maintenance and so on but I just need to keep it running for long enough to get decent business credit so I can finance the truck I really want. GMAN was right about the costs of renting. Penske gave me a little bit of a jerk around and when it finally came down to making a deal the terms weren't as agreeable as the person I originally had spoken to told me they would be. Of course I wouldn't have to worry about repairs and so on like you said, however, I'll make a lot more without having to worry about those payments and I'm hoping that difference will at the very least make up costs I'll incur for maintenance. I found a pretty nice 05 Columbia for a really great price that I have my eye on. I wanted to ask you guys if you had any suggestions for places I could look for used trucks other than truckpaper and where I could find some kind of directory of loads going to or coming out of NY/NJ ports. I want to be prepared incase the work I have lined up drys up for some reason. Any other advice you guys have for me will be highly appreciated.

 

I don'r recall where you live, but Schneider is selling some of their fleet off for as little as $12,000. They are Freightliners. I received an email from them a few days ago about them. I wasn't interested in buying any more trucks so I deleted it. You might do a search or call them and find it. They have more expensive trucks for sale, but these should have had decent maintenance. Lone Mountain leases trucks. They have 3 locations. I don't know anything about them other than what I have read on this forum. Arrow Truck Sales has several locations all over the country. I believe they are owned by Volvo. There is a publication you can find in some convenience stores called Big Truck Trader. They sometimes have good deals. I have found some of my best deals by driving around and checking out trucks at different dealers. Some sell trucks themselves. My last truck I found at Peterbilt. I got a very good deal on it. Another time I bought an International from a dealer who was selling it for the owner. It was a one owner and the guy wanted to retire. I bought it below wholesale. If you take your time you can find good deals. Some trucks you find at dealers are over priced. Taking your time allows you to look around and find the right deal. You may also check with some of the equipment financing companies. They often sell their repo's. If you have cash or your own financing you are also a step ahead when it comes to buying a truck. Dealers often have the means to find suitable financing, but you may get better terms on your own.

 

Ok fellas, need even more advice. Just found an 05 Columbia that I think I'm going to buy. It was a trade in at a Volvo dealership and they tell me everthing with it is totally sound. It has a Mercedes MBE 4000 in it and a reman super 10 transmission thats relatively new. Does anyone have anything to say about Mercedes engines? Some places I hear drivers have nothing but problems with them.