You are very fortunate if you are doing as well or better than last year. I met another reefer owner yesterday who told me the same thing. There are those who blame others for their failures. I have seen many of them over the years. No matter how well you prepare most people will not be prepared for this economy. Granted we always have seasonal changes. Most of us prepare for those changes. We cannot control those economic changes not directly under our sphere of influence. Tight credit markets and low freight volumes are not something we can control. We can survive as long as we have cash flow. Regardless of how little debt we have ourselves, most of those with whom we do business do rely on a fluid credit market. Since we are reliant on the viability of those shippers and brokers for our survival we are affected by those credit markets. We cannot control those outside influences, only our reaction to those changes.

 

Hope is only to be used for electing silver-tongued liberals with no previous experience.

 

Be happy with $.34/hour.

Seriously, if someone had some cash.....like $80,000 - $100,000, now might be a good time to buy some equipment and become a carrier. As long as you don't need to make a profit to live or make payments...the worm should turn at some point and then a guy could make some money. At least for a few months.

I saw 4 RGN loads posted in the last 2 days. Haven't seen that many in weeks. Maybe TWIC is starting to have an effect.

 

HAAAAAA!!!!!!!:clap:

Yeah, you're right!

But, I have to agree with what chris1 is trying to tell you. If you don't have the accounts lined-up that will pay enough profit so you can afford a truck payment, then why even bother to start with? Do not start-out cutting it too close, not these days. Do not start-out thinking things will get better as you learn. Start-out with at least one good account in the bag, or a handful of good agents on-line, or both.

If you are trying to hit the road running off load boards, you won't make it IMO. And for God's sake stay away from those leasing on to those big companies.

Here's a good rule of thumb for you that is consistent with what chris 1 was saying.

Here it is--instead of risking a boat load of your own cash and credit--go to Ryder and do a short-term lease. It will be higher than hell and you will not make much, if any profit for your lease period, (I'm talking 6-12 months) but you can have a free look-see. See? They will put an entire package together for you which includes everything but a blow-up woman. Again, if what you're hauling doesn't pay enough to lease a truck, then why are you hauling it?

That way you can take a tour and see if you like what's out there. And when you are done you will not have three more years of truck payments or a truck sitting in your front yard with a For Sale sign in the window.

 

If you can afford to pay Ryder $500-800/week you could have a truck paid for in a year and still have money left over. You will also have something with equity. When you rent you don't have anything left at the end of your lease or rental period. I think you need to either make a commitment or not. Becoming an owner operator isn't something you can do half way. It requires planning and commitment.

 

The point is that if you do not make enough to pay 5-800 a week for a tractor and trailer you're not making enough. If you have no payments fine,then you should have 3000 per month more net.
Equity in your equipment and a dollar will still get a cup of coffee.

 

My point is that we don't need to spend everything on our equipment. If you do then you won't be able to survive the slow times or when the economy is off. If you have big payments right now, then you are probably in trouble. Making big payments is not so difficult when the economy is good and there is plenty of decent paying freight. However, when you have big payments, freight is sparse and rates are low, then making those payments can be difficult. I know of one owner operator who just took a load out of Arizona that paid him just over $0.80/mile. He usually finds loads that pay much better, but there are plenty of loads available in that range to a little over $1/mile. You cannot survive with those rates. He got a good rate going out but even rounding the average for the trip he still isn't doing that well on this trip. Over all he is still doing OK but his wife also works. I think he will survive this down turn because he had a good year with pretty good rates. I would never spend $500/week on payments. It is too much to pay out, especially starting out. If you make that much exta each week then you could buy the cheaper truck and use the difference to trade up to something newer, if that is what you want.

 

First i have not said that you have to have new trucks/payments. Just that if you could not make those payments you're not making enough.
I take it from past posts that you have three trucks. If you are not putting at least 100,000 into your pocket from those three "paid for" trucks before anything else than you're not doing as well as you think. The object is to maximize the income,not just enough to get by on because you don't have any payments.

 

You need a certain amount of profit to be successful. Each of us decides for ourselves how much profit we need to achieve our ideal of success. Some people are happy earning $500/week. Others would not be happy with $5,000/week. There are realities of this business. We have cyclical times of the year when business is good and others when business is slow. We should prepare for the slow times when business is good. It is much easier to get through the slow times when your overhead is low. I understand what you are saying about being able to make big payments. You run into a problem when you have those big payments and then don't have the reserves to make it through the lean times. We are in a depression and don't know when things will turn around. Revenues are down by as much as 50% or more with many carriers and owner operators. You can plan for a slow time of year but it is difficult to plan for a depression. The best way is to keep debt to a minimum. Any debt that you do take on should be for a shorter term. If you have big payments, debt and little reserves you are likely to find it difficult to make it though this year.

 

Everyone has already given excellent advice, and you should listen to them.

You are on the right track by figuring your expenses, but many of them are off base. As stated by others, your truck is too expensive, your interest is too high, your estimated miles run is too high, and although you calculated maintenance, you are planning to take it out of your earnings. What if your blow an engine on your first run? Do you have enough money to replace it?

Go to How to Become an Owner Operator and Make Money in Trucking: Interactive Cost per Mile (CPM) Calulator to Aid the Owner Operator for an interactive CPM (cost per mile) spreadsheet calculator. You can put in all different kinds of figures and your CPM, Income per Mile, Income per Day, Cost per Day, Net per Mile, Net per Day, Average Miles per Day and your Expenses to Income percentage will all be calculated automatically. You can play "What If" and figure out how much you realistically need to make and how much you need to run to turn a profit.

If you figure above an average of $1.00 per mile income, you are too high.

I have been an owner operator for 37 years, and I haven't seen a slump in the trucking industry this bad in all that time. It gets harder to make a dollar every day. The harder it gets, the more rates are cut, and the more rates are cut, the less you make. It is a vicious circle. I wouldn't advise anyone to become an owner operator at this time.

If you do decide to go for it, I wish you all the luck in the world. You're going to need it!