Hello everyone, My family and I operate a small seed company we are looking at a sizable amount of shipping next season. We could be looking at upwards of 20 thousand bucks just in freight charges. using the rates that the company that delivers us pallets charges when they back haul for us. last year at the Kansas crop improvement ass. meeting they had a program about delivering seed is considered commercial hauling and needs to be done inside the law, with insurance and all that. we would need the truck maybe 2 to 3 months out of the year to make our deliveries. which makes owning a commercially tagged truck pretty expensive. what I was thinking was buy the truck and hire a driver to put in it and let it work doing whatever during the time we don't need it. I need to find work for it to do that will be easy to get again after the seed delivery season is over. I want the truck to pay me enough to keep it maintained and set some aside for repairs it might need, the rest I figure could go to the drivers salary, I wouldn't be buying it to make me a lot of money just hopefully save a little. I thought if I could pay the driver well that might make him want to stay. I have thought about getting a grain trailer and hauling grain in the off season but don't know just yet what that pays. I doubt there would be much local work to do with the van trailer that would haul the seed but maybe. I have little rental house in town and my tenant is a retired driver and he said he would drive for 15 an hour if he could be home every night and as long as its not a freightliner. So what do you guys think is it a bad idea, is it a good one. what do I need to know?
Thanks
Levi

 

Aw man, the Freightshakers are fairly cheap............

The upkeep and maintanence can get expensive pretty quickly, make sure you keep a nice little nest egg for that! Have you thought about the fuel bill yet? Would you be driving on toll roads at all? Tolls for trucks are MUCH higher than regular cars.

GMAN might be able to better help you with some guidance on your own truck, he has a lot of experience as an owner operator running a few trucks. Good luck if you go under your own authority!

 

Where are you located?

 

I am located in western Kansas. yes I have thought about fuel costs, before we were a seed company we were just farmers and we still are just raising seed along side commodity crops. so fuel is something I had considered I had not thought about toll roads. but it does make sense that they would be higher, I know near dodge city where I live with all the cattle coming in and boxed beef going out a lot of the highways get nice ruts in them from all the truck traffic. So what exactly is your own authority? is it tags insurance and ifta? or that and more? My cousin who drove for a long time till he didn't get paid by the outfit he was working for for about a year and then broke his wrist and couldn't drive and lost his truck, He thinks he could have got out from under all the debt he had had that not happened. He has told me some stuff and also told me to stay away from Freightliners. he told me I need to buy a truck that someone wants to spend there time in. and that makes sense.
Thanks for the help
Levi

 

I have owned trucks and have had experience with hiring and managing drivers for many years. From your post it sounds like your primary motivation is saving money on your personal freight costs. It will cost you more than $20,000 to run a truck for a year. I am glad that you are doing some research before moving forward and buying a truck. If you plan on operating a truck you will need operating authority or will need to lease to someone who has authority. There are two types of authority, intrastate and interstate. Intrastate authority is for those who pick up and deliver freight within the same state. Interstate authority is for those picking up in one state and delivering in a different state. Interstate authority is issued by the fmcsa and costs $300. You will need a minimum of $750,000 liability insurance to get the authority, but most shippers require $1 million liability and $100,000 cargo. Rates for this type of insurance is usually high, especially for startups. I would check on your insurance before doing anything. The last time I checked with my own insurance agent he told me that he has been seeing rates for new carriers at around $16,000/year. However, rates can vary widely, so it pays to check around. Drivers can make you money or put you in the poor house. No matter how well you treat drivers or how much you pay them, you will have turnover. So, you should count on your truck sitting for weeks or months in between having a driver and finding a new one. You could be one of the very few lucky owners who keeps his drivers for longer periods of time. But, all truck owners have turnover. Drivers can have an impact on your insurance rates. As far as trucks are concerned, if you take the skin off of any truck they are all pretty much the same. There are a lot more Freightliners around than most other brands which means that you can usually purchase them for less than some of the other brands, such as Kenworth or Peterbilt. Believe it or not, having a Peterbilt or Kenworth could make a difference in the type of driver you attract. I am not suggesting you go out and buy either of those brands. You can make as much or more with a Freightliner or International with less outlay of costs.

When you own trucks and have drivers, you will need to spend time finding good paying loads. If you are involved in another business or job, you will need to either take time away from that other endeavor or hire someone to keep your truck loaded and moving. You will also need to finance your expenses until you get your money turned around on outside loads. Some brokers and shippers do have quick pay options for a discount on the freight rate. And there are also factors that will purchase your receivables for a fee. Typically, you could wait 30-60 days for payment if you do your own billing from the time you send in the invoice until you receive your money.

There are pros and cons to owning a truck as compared to using outside carriers to haul your freight. It is costly running trucks. The fourth quarter of last year I had to replace an axle on one truck and have a transmission rebuilt. If you want to get an idea of what it costs to actually run your own truck, you may want to check out OOIDA (Owner Operator Independent Drivers Association, Trucking Association). They have a couple of spreadsheets you could use to plug in your own numbers to get a realistic idea of what it will cost you to operate your own truck. Before you start spending money, I would first check the cost for insurance. Your most costly expenses will be equipment, insurance, driver and fuel. You big upfront costs will be the equipment and insurance. Good luck.

 

I am in Iowa and have friends who only haul cattle feed and they have more work than they can handle. I would think it would be the same for you in Kansas. They haul from the Cargill corn plants that are close to where we live directly to the farms.

Are there any Cargill, ADM, Roquette plants near you?


If you do something like that you can get your insurance with a mile limit and it is alot cheaper. I pay $320 a month for mine with a 500 mile radius.

 

yes I have thought about cattle and there are a bunch of beef packers close by Dodge has excel which I think is owned by Cargill, and national beef Garden city has IBP and another National plant at Liberal KS. about ten or so years ago the monfort plant burned at Dodge and everyone was surprised they didn't rebuild, Sorry Scottt I thought you were talking about hauling the cattle to the packer not feed to the cattle. There aren't to many small feed lots around any more that have pre made feed delivered but the big feed lots have there own feed mills and do bring in a lot of corn. I do think I could manage most everything I am thinking of doing inside of 500 miles thank you for that Scottt

Gman thank you for your information. I figured it would cost more than 20 thousand to operate a truck but that is kind of the minimum number we are looking at it could easily go up from there. I just don't know how much yet. When you said Peterbuilts and kenworths make a difference in the kind of drivers you attract what did you mean by that. I agree with what my cousin used to say he was a "professional driver" If he was driving in shorts and a tshirt with flip flops on he would stop and change clothes before he brought his load, but he had to deal with a lot of people in charge like small business men and stuff like that so he thought it made him look better than "Some slob who looks like he hasn't had a bath in a week". we used to buy cattle from all over the country and saw all kinds of guys most of them were descent and polite but we saw a few that were like what my cousin told me about.
Well thanks again guys
Levi

 

I was talking about gluten which is a by product from the corn milling plants. My friends haul that to the farms and they use it for feed.

 

So I called a local coop that has several locations and they haul to one location to put together 100 car loads of grain. The farthest they haul is 58 miles and pay 21 cents per bushel the shortest they haul is 15 miles and pay 7 cents per bushel wheat is supposed to way 60 lbs per bushel so you should be able to load 660 bushels the long trip would pay you $138.39 or $2.38 per loaded mile the short haul pays $46.20 or $3.08 per loaded mile. I figure you could make 4 round trips doing the long haul in a day figuring for all the stuff that would take up time that you don't count on. So a gross per day of $553.56 figure the drivers time for $15 hr at 10 hrs on the job $150. total mileage for the day would be 484 with 20 miles extra for getting to the start point and back home if the truck makes 6 mpg that's 81 gallons of fuel with local highway diesel at $2.09 equals $161.29 for fuel. If I can buy insurance for $320 a month, that is $10.67 a day for insurance.
So with a gross of $553.56 and costs of $321.96 leaves me with a net so far of $231.60. I know I have not accounted for paying for a truck and a trailer because I don't know what to look at just yet. but with that sort of revenue what type of equipment could I look at and comfortably pay for and have enough set aside for some sort of mechanical disaster, maintenance, tires, and replacing the truck in the future. Also what about workmans comp what would that cost if say my driver was injured. That is what took my cousin out was an injury that made him unable to drive for a long period of time and couldn't keep up with his bills.
Thanks again
Levi

 

Limiting your operating area could reduce your premiums. Some insurance companies will limit your range the first year, anyway. Once you decide what you will haul and the type of equipment, you can call around for rates. As far as the type of truck you buy, some drivers would rather drive a Peterbilt or Kenworth, even if they earned less money. Personally, I would not worry about the type of truck. Buy something you can afford that will best meet your needs. I would stay away from brand specific engines, such as Mercedes in Freightliner. If you have an experienced driver near you that you think you can trust, that would be your best bet when hiring. If you only haul agricultural products, you may qualify for some exemptions for licensing and insurance. Again, you need to make a decision as to the type of freight and equipment you want to purchase. I would buy the equipment that will best meet your needs and those of your potential customers.