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20 • February 15-28, 2019 Business THETRUCKER.COM For small-fleet startups, choosing the right equipment is an important early step Cliff Abbott cliffa@thetrucker.com The list of things to consider before starting or expanding a small trucking business can be nerve wracking, but perhaps the biggest decision is the kind of equipment to purchase. Some opt for new tractors, taking advantage of the very latest technology and the reduced risk of maintenance-related costs and downtime. Many owners, however, find the cost of a new Class 8 tractor, usually $140,000 and up, to be prohibitive. For them, the used-tractor market is a better alternative. Fleet Focus It’s possible to get into an older Class 8 tractor for a fraction of the cost of a new one. Age and mileage impact the price, of course, but the law of supply and demand plays a part, too. Current used tractor prices are robust. Economic growth has resulted in more available freight, enticing buyers to add trucks and driving up demand. The right tractor can still be found, however, with patience and research. Obviously, older and higher-mileage tractors sell for less and are the choice of many buyers. When financed, payments are more manageable for a startup-business budget. On the flip side, maintenance costs are generally higher and the risk of catastrophic failure of a major component, such as an engine or transmission, is increased. It’s important to remember that the “cost” of repairs can be far greater than the parts and labor charges shown on the bill. Every day the truck is down is a lost-revenue day, representing $500 to $1,000 or more that couldn’t be earned. Some shop visits require additional days for parts to be shipped before installation can begin. On top of this, expenses for motels and other expenses add to the total. Frequent shutdowns due to repairs can cripple a small business that depends on a consistent revenue stream. For this reason, many buyers opt for used equipment that is newer and with fewer miles. Warrantees are an important consideration, too. Newer vehicles may come with a portion of the original manufacturer’s warrantee still intact. In some cases, used-tractor dealers offer short-term warrantees, like Arrow Truck Sales’ 90-day/25,000-mile comprehensive package. Many sellers, including Arrow, may also offer an extended warrantee at additional cost. Some are administered by a third-party that sells coverage through dealers such as National Truck Protection. Each buyer must weigh the cost of such warrantees against the risk of repair costs and loss of income, keeping in mind that few warrantees of- ALWAYS fer coverage of motel and incidental costs while Moving FORWARD WITH PRIDE, INTEGRITY, AND YOU. 100% OWNER OPERATED FOR OVER FORTY YEARS Thank you to our family of Independent Contractors, at Mercer Transportation, for driving earnings to a record year in 2018! Move your own business forward in 2019 and join Team Mercer, where Independent Contractors are treated with the respect they deserve, make good money, receive generous discounts on fuel, tires and insurance, and get paid after each load through our Quick Pay Program! the truck is repaired. Careful inspection of the tractor before purchase can increase buyer confidence in the roadworthiness of the vehicle. While a thorough DOT annual vehicle inspection is mandatory, the buyer can negotiate for items such as new tires or brakes and other items. Financing is another key area to consider. Interest rates can vary widely, depending on the financing source, the buyer’s credit, the equipment financed and other considerations. Monthly payments can change based on the length of the loan, the down payment and the interest rate. The wrong financing deal can quickly sour what appears to be a great price on a tractor. Another form of purchasing a “used” tractor is to consider purchase of a glider kit. This popular option puts the buyer in a tractor that is virtually new, saving 25 percent of the purchase price of a new tractor, according to Byrdstown, Tennessee-based Fitzgerald Glider Kits. An advantage to glider kits is the use of popular pre-emission engines. Fitzgerald offers classics like the Cummins ISX, Caterpillar C15 and Detroit Series 60 engines, rebuilt to new condition and equipped with modern programming to maximize performance while minimizing emissions. Owning and operating a small trucking business brings enough issues to deal with. Choosing the right equipment, including warrantee and financing options, is a good start toward a business that’s satisfying and profitable. 8 MERCERTOWN.COM CONTACT US TODAY! 1-888-374-8445
RECRUITING at a Glance Company Driver Owner Operator Teams Lease Purchase Flatbed Van Reefer HAZMAT Expedited Specialized Tanker Cargill www.cargillmeatlogistics.com (316) 462-7220 See our ad on page 15! FedEx Custom Critical www.customcritical.fedex.com (866) 729-9789 See our ad on page 25! Mercer www.mercertown.com (888) 374-8445 See our ad on page 20! P.I.&I. Motor Express http://www.piimx.com (855) 693-8963 See our ad on page 11! Smith Transport www.smithdrivers.com (866) 451-2859 See our ad on page 27! CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CFI www.CFIDrive.com (877) 592-3642 See our ad on page 21! Janco Ltd. www.jancoltd.com (800) 526-9085 See our ad on page 26! National Carriers www.drivenci.com (888) 439-3196 See our ad on page 40! ProFleet Transport Corp. www.profleet.com (877) 684-8787 See our ad on page 21! Transport Designs, Inc. www.transportdesigninc.com (855) 496-3039 See our ad on page 22! CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK D&D Sexton, Inc. www.ddsextoninc.com (800) 743-0265 See our ad on page 19! Landstar www.lease2landstar.com (877) 472-0097 See our ad on page 2! Penske Logistics www.gopenske.com/careers (855) 235-1361 See our ad on page 25! Schneider www.schneiderjobs.com (800) 44-PRIDE See our ad on page 9! Tribe Transportation www.TribeTrans.com (877) 628-6285 See our ad on page 20! CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK Diamond Transportation www.diamondtrans.net (262) 554-4025 See our ad on page 24! McColister’s Transportation www.mccollisters.com (800) 257-9595 ext. 9490 See our ads on pages 26 & 28! PFS Brands www.jobs@pfsbrands.com (573) 893-1361 See our ad on page 21! Skelton Truck Lines www.skeltontruck.com (800) 387-9796 ext 231 See our ad on page 8! CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK CD OO T LP F V R H E S TK OTR DRIVERS NEEDED IN CENTRAL MISSOURI DRIVE YOUR CAREER IN THE RIGHT DIRECTION. 4 STRAIGHT PAY: 52¢ - 62¢/MILE 4 3 WEEKS PAID VACATION - 1 ST YEAR 4 HOME MOST WEEKS OR WEEKENDS 4 MEDICAL INSURANCE/401K 4 NEWER/WELL MAINTAINED EQUIPMENT 4 PROFIT DISTRUBUTION PROGRAM 4 EMPLOYEE STOCK OWNERSHIP PROGRAM (573) 632-3371 | jobs@PFSbrands.com | PFSbrands.com JOIN ONE OF AMERICA’S FASTEST-GROWING COMPANIES. HEADQUATERS IN HOLTS SUMMIT, MO
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