Help A Potential Non CDL Semitruck Owner That Doesn't Know Anything :-)

You should NEVER invest in anything unless you know something about it. You've said you know nothing about trucking. Running a one-truck outfit has more moving parts than most small business opportunities have. Even if I could give you a crash course on all the things you need to know your returns will be slim at best and it's doubtful that you'd survive the storm that's coming to the trucking industry in the next year. Still, welcome to my dojo. Here a few reasons why you'd be much happier with a duplex.

Right now there's a truck shortage. Even used trucks are selling for more today than they cost three years ago when they were new. Used trailers are going for $60-80K when you can find them. If you can get a tractor and trailer today you'll pay much more than they're worth.

Revenue will be a problem. Rates and freight volumes are falling. That doesn't mean your competitors will politely park their trucks and go home. That means there will be increased competition for what freight is available, keeping rates down. Eventually some of them will go broke and hang up their keys, thinning the herd but until then expect to see rates at or below your cost to run the truck. Why would you take a load you're going to lose money on? We'll get to that.

Diesel is over $5.00/gal in California and select locations on the west coast already. It's expected to go up in the $7-$8 range by year end. That's if everyone plays nice. There's currently talk of shutting down the 600,000 barrels of oil the US gets per day from Russia and getting it elsewhere (Iran). I won't argue about the wisdom of shutting down domestic production to make ourselves dependent on countries that hate us in this thread. Increased fuel prices are the happy ending to the story. Other possibilities include shortages, rationing and outages. There's a very real danger that even if you can get a truck, a driver and a load together they may have to sit idle for days at a time waiting for fuel.

The two biggest expenses you'll face are fuel and your driver. The truck doesn't burn much fuel when it's idle and the driver usually doesn't make anything either. That's a problem. That driver didn't sign on to see the country as a volunteer. He has bills to pay. He won't be happy sitting parked at a truck stop while you're looking for a load for him that pays enough to cover his pay and fuel for the truck. You can bite the bullet and take a load for cost, or slightly less or give him some time to think about jumping ship for a job with a regular paycheck. If he does you'll then have to compete with hundreds of other trucking jobs at companies drivers have at least heard something about to help them make their decision where to apply.

Just because your parked truck doesn't cost you for fuel or driver pay your other bills will still keep coming - insurance, accounting (state and federal taxes, IFTA), truck maintenance, subscriptions to the load boards and ELD services. You pay for these things even if you park the truck. Losing a couple $100 on a load is better than spending thousands and having zero revenue.

At some point things will turn around. As the herd thins capacity will move closer to demand and freight rates will rise again. When fuel costs go back down people will have more disposable income to spend on restaurants and Amazon then freight volumes will increase again. Rates will probably rise until truck and trailer manufacturers can build enough to meet demand again. I'd say we're a good 5 years away from that happening though. Now, snatch the pebble from my hand...

Hello. I am planning on buying a truck with some family members. I am trying to do some research on what my options would be if I want to hire a driver for the truck. It's hard to find good and specific information on this. A lot of what I saw was talking about simply buying the truck and leasing it, and not being too involved. Essentially most people are looking for a source of passive income. This is not what I want to do. I would like to manage everything related to owning a truck, except the driving and basic maintenance. I would love to work from home, but of course don't mind if I have to get out and network with truck drivers. What is the best approach for this type of business, where we own the truck, handle operations, and hire a driver? The plan is to succeed with one truck and buy a second one. Rinse and repeat. I would like to do it full time, and as long as I can get paid $2500+ with the one truck, it would be perfect. Would appreciate any and all advise. Also, if someone with experience in the industry wouldn't mind sparing a few minutes for a conversation, it would be much appreciated, thank you

Personally, were I you, I'd get MY CDL first ... to have a better understanding of what BEING a truck driver really IS.

Pretend you are . . . and read the following:

• Truck Driver's Career Guide
• Brett's Book: The Raw Truth About Trucking (free online version)
• High Road CDL Training Program
• CDL Practice Tests

Or, you could go to the classifieds at the OOIDA website, and see who's selling a rig, with all the #'s.... and go from there! (MC/DOT/contracts (or not) etcetera.)

This is really not a good time to try to 'blossom' as a new O/O with NO following, and no knowledge of the industry.

Best wishes, anyway, Noel~!

~ Anne ~

ps: Most of the folks here (like the above poster) have LOTS of experience in the industry. And like Steve, most OF the O/Ops will tell you, invest elsewhere.

So essentially, unless i'm planning on being CDL A O/O, the investment is probably not worth it? In this case, for how long would you recommend I should drive the truck before I can be comfortable having someone else do it? I understand that being new in the industry with no following and no knowledge is a challenge, but that is something I'm up for. Why is it not a good time to try to blossom these days? Thank you so much for your reply

Noel,

The others that replied after me, have given you ALL the sage advice you need, no holds barred. OTOH, read some posts by our moderator/member, PJ (I'll see if I can get him to reply as well.) He was a company driver years before he bought his Peterbilt, that he and his fiance' now team/drive. (He JUST sold his 2nd fleet truck/Volvo; wasn't worth it.)

You can read some of his postings, here: PJ's Profile and Comments Directory.

Again, you'd be better off doing some research over at the OOIDA site; get some ideas on buying an 'existing' MC# and maybe even a full unit. Starting totally new, with zero experience, your insurance ALONE can smoke you the first year.

Going company FIRST to get EXPERIENCE, will give you lower (somewhat) insurance rates, for one.... for two, you could always be a lease operator (although we DON'T advise this at all, because the 'company' benefits, not the driver,) but you'd at LEAST see what the expenses are like!

Again, seriously not a good mind set right now, with all the replies from the guys above explaining it, better than me.

Wish you the best!

~ Anne ~

Here's more free advice: Don't go into any business partnership or anything else involving money with relatives IMO.

I will second that.

Noel, you stated that you know nothing about the trucking industry. Are you aware of the typical nationwide operating ratios of trucking companies? Are you familiar with their average profit percentages? Do you understand how much more difficult it is for a smaller operation to compete in a commodities market and why? How did you come up with the idea that trucking would be an easy way to make money?

The market for buying trucks is terrible right now. Trucks are selling at outrageous prices. The price of fuel is really high right now too. Surely you are aware of those issues. Have you even considered your insurance needs and expenses. I can assure you that they will alarm you.

There will always be demand for trucking. That is for sure, and is probably something that motivates you, but this business is very tough and extremely competitive. I am a long time business owner. I drive a truck that somebody else owns because I don't see a good way to make it as an owner/operator. I have a niece who was so impressed by the money I was making as a driver that she went out and bought a Volvo truck with a plan much like yours to earn some extra money. She had money to invest and a great business head on her shoulders. I wish I could tell you of her success. She quit within six months because she saw the writing on the wall.

You may be a much smarter man than me, and I know that people make it in this business all the time. I just want you to know that it is tough, and it is dog eat dog out there. I thoroughly considered being an O/O myself. I have the capital and the knowledge. I can't find anything to motivate me in that direction. Forgive me if I sound pessimistic. I just think you need to look into this a lot deeper before you make the leap.

Thank you so much this is the kind of information I was looking for. It's not pessimistic, just realisitic

I hope you don’t think Noel that 75 to 100k is going to get you a new truck because you won’t even come close. That kind of money will probably get you a truck that was 45k before all this craziness happened. And 45k is about the most i’d ever spend on a truck. I’d spend that and fix it up from there. These new trucks have just as many issues. If I’m going to spend 100k on a truck it better be flawless. Terrible time to buy a one.

If you were just looking into truck ownership thinking it was going to be easy money. It’s not. More than you realize goes into it. With the way the economy is trending and with fuel going way up not a great time to try it. And as someone mentioned your insurance will be through the roof if you can find anyone to insure you that is.

You should NEVER invest in anything unless you know something about it. You've said you know nothing about trucking. Running a one-truck outfit has more moving parts than most small business opportunities have. Even if I could give you a crash course on all the things you need to know your returns will be slim at best and it's doubtful that you'd survive the storm that's coming to the trucking industry in the next year. Still, welcome to my dojo. Here a few reasons why you'd be much happier with a duplex.

Right now there's a truck shortage. Even used trucks are selling for more today than they cost three years ago when they were new. Used trailers are going for $60-80K when you can find them. If you can get a tractor and trailer today you'll pay much more than they're worth.

Revenue will be a problem. Rates and freight volumes are falling. That doesn't mean your competitors will politely park their trucks and go home. That means there will be increased competition for what freight is available, keeping rates down. Eventually some of them will go broke and hang up their keys, thinning the herd but until then expect to see rates at or below your cost to run the truck. Why would you take a load you're going to lose money on? We'll get to that.

Diesel is over $5.00/gal in California and select locations on the west coast already. It's expected to go up in the $7-$8 range by year end. That's if everyone plays nice. There's currently talk of shutting down the 600,000 barrels of oil the US gets per day from Russia and getting it elsewhere (Iran). I won't argue about the wisdom of shutting down domestic production to make ourselves dependent on countries that hate us in this thread. Increased fuel prices are the happy ending to the story. Other possibilities include shortages, rationing and outages. There's a very real danger that even if you can get a truck, a driver and a load together they may have to sit idle for days at a time waiting for fuel.

The two biggest expenses you'll face are fuel and your driver. The truck doesn't burn much fuel when it's idle and the driver usually doesn't make anything either. That's a problem. That driver didn't sign on to see the country as a volunteer. He has bills to pay. He won't be happy sitting parked at a truck stop while you're looking for a load for him that pays enough to cover his pay and fuel for the truck. You can bite the bullet and take a load for cost, or slightly less or give him some time to think about jumping ship for a job with a regular paycheck. If he does you'll then have to compete with hundreds of other trucking jobs at companies drivers have at least heard something about to help them make their decision where to apply.

Just because your parked truck doesn't cost you for fuel or driver pay your other bills will still keep coming - insurance, accounting (state and federal taxes, IFTA), truck maintenance, subscriptions to the load boards and ELD services. You pay for these things even if you park the truck. Losing a couple $100 on a load is better than spending thousands and having zero revenue.

At some point things will turn around. As the herd thins capacity will move closer to demand and freight rates will rise again. When fuel costs go back down people will have more disposable income to spend on restaurants and Amazon then freight volumes will increase again. Rates will probably rise until truck and trailer manufacturers can build enough to meet demand again. I'd say we're a good 5 years away from that happening though. Now, snatch the pebble from my hand...

Thank you so much for the answer, this is exactly the type of information I was looking for. Now let's say I decide to also operate the truck, how do you fancy my chances then, even in this climate I am being schooled about? I have a close friend with 5 years experience company driving, who bought his own truck last year. I can rely on him for assistance as well, although he is also fairly inexperience on the owner part. Also if it matters, I live in Seattle area

Noel you stated you wanted to see $2500 to be happy. Is that amount per week, or per month? How did you arrive at this amount?

Invest in oil futures... the next 3-6 months you’ll make a killing.

AND, those relatives that kick in money with you, are going to expect their $$ chunk out of that "Pie" too.....BAD IDEA lol Just got back home in Cali the other day, diesel is pennies from $6 a gallon and I am guessing it will pass that, and keep climbing

When someone you "know" claims they make XX amount of money owning their truck, ask em to show you their Tax Returns !! Bet they won't do that lol Gross revenue don't count much, when company drivers can Net as much or probably MORE, than they have....

Just the 2 months of this year, I've grossed over $15k and pocketed just wee bit over $13k+ as a company driver,(minimal "debt free"! cost of living & taxes)

Noel you stated you wanted to see $2500 to be happy. Is that amount per week, or per month? How did you arrive at this amount?

that would be a month. It's a little bit more than what I am making on my current 9 to 5 after taxes