100123_TT_AllPages

More documents

Recommendations

Info

16 • OCTOBER 2023 JOB RESOURCES THETRUCKER.COM OWNING THE WHEEL There’s a lot more to running a successful trucking business than just owning a rig CLIFF ABBO<strong>TT</strong> | SPECIAL CORRESPONDENT It’d be pretty hard to find a driver willing accept a company driving position without even asking what the pay will be. In fact, most people would say that blindly taking any job without finding out the pay scale is not a wise move. However, professional drivers who decide to buy a rig and strike out as owner-operators do this every day. In most cases, the main focus is on the truck itself — the price, financing, accessories, specifications and so on, seeking the most truck for the least investment. How they’ll make money with that truck — including a backup plan if the first attempt doesn’t work out — is barely planned (if it’s planned at all). The truth is, buying a truck means starting a business. Revenue is the lifeblood of any business, and it should be the first consideration in starting up a new one. It’s part of any business plan. To successfully estimate revenues, truck owners must have an understanding of how freight rates work. Some owners choose to lease their equipment to a carrier, running within that carrier’s system in return for a set permile rate. Doing this allows them to take advantage of the carrier’s infrastructure. The carrier finds loads, does all the billing and collecting, maintains the appropriate safety records, and handles registration and permits. In many cases, the carrier provides the trailer, too. The truck owner drives (or hires a driver) and collects the money. However, it’s important to understand that even per-mile rates are based on current freight rates. For owner-operators who are compensated a percentage of the load revenue, freight rates directly impact the owner’s income. Those who depend on the spot market using load boards, brokers or both, might see the greatest impact from changing freight rates. That’s because the spot rate is the first to be impacted by market forces. While contract rates are locked in by an agreement between a customer and carrier, spot rates represent what the market will bear. Shippers or the brokers who represent them make loads available, usually for the lowest rate they think they’ll be able to get. Truckers then either accept the loads at the posted rates or try to negotiate for better. The biggest impact on those rates is usually the number of trucks competing for the available loads. Spot rates often temporarily rise over holiday weekends, such as Memorial Day or Labor Day, because the number of available trucks goes down as their owners park them for the holiday. Fewer trucks mean more competition between shippers to book them, driving rates up. Knowing the market served and how it operates is important to successfully running a trucking business. In addition to temporary rate fluctuations caused by holidays, weather events and other occurrences, there is an overall freight cycle that generally takes several years to complete. The latest cycle, impacted by COVID-19 pandemic shutdowns and government stimulus checks, is a classic example. The year 2019 was a solid year for trucking, but when COVID hit in 2020, many manufacturers shut down. In response, some carriers slowed or stopped hiring drivers, or even laid drivers off. As the economy started reopening, retailers needed to have products restocked and manufacturers needed to rebuild parts inventories. There was a boom in freight and there weren’t enough trucks to handle it all. Rates skyrocketed. In response to rising rates, carriers bought more trucks. iStock Photo Want to own and operate your own truck? Knowing your market, lanes, seasonality and where the freight cycle is now will help you make the best decisions to make your business successful. Drivers quit company jobs to buy their own trucks, starting trucking businesses while rates were very favorable. New carrier registrations soared. The number of available trucks continued to climb — but so did inflation. Rumors of a coming recession cooled orders for more products, and the supply/ demand pendulum swung the other way. Rates plummeted to their lowest level in years and have yet to recover. That’s where we are today. At some point, rates will begin rising and the cycle will start again. In the meantime, equipment costs have risen sharply, as have interest rates for those borrowing to finance equipment. Starting a new trucking business while rates are bottoming and costs are soaring isn’t a sound business strategy. Another thing that’s critical to a successful trucking business is understanding lane dynamics. Everyone wants to grab that load to Orlando with the really high rate — but freight coming out of Orlando usually doesn’t pay well. The options for an owner-operator might be to either sit for days waiting for a better rate or take a lower-paying load to get back to an area where rates are higher. Ideally, truck owners will settle on a lane that provides good rates out and back. Some load boards, such as the DAT board, allow drivers to look up average freight rates by city or area so they can plan out loads in advance. This way, they can avoid loads destined for areas where outbound rates are low, or at least make sure they earn enough on the inbound run to cover the low rate for the outbound segment. It’s also important to understand seasonality. A trucker with temperature-controlled equipment, for example, will do well to know when harvests occur in different regions of the country so loads can be accepted that position the equipment for the best rates. Flatbed truckers might study construction trends for loads of building materials and other products. Finally, knowing what rates will be profitable can’t be estimated unless the business owner knows the cost per mile of running the truck. Keeping records of all costs associated with the business, including the driver’s pay and benefits, and then dividing that by the total of miles driven provides an idea of per-mile costs. When considering rates, it’s important to factor in ALL necessary miles, including empty miles driven to get to the pickup point. A June 2023 study released by the American Trucking Research Institute (ATRI) calculated the industry average cost per mile in 2022 at $2.25. That amount may already have risen higher due to increased costs for insurance, parts and interest. Your own cost per mile may differ, depending on your route, fuel costs in your area, the cost of your equipment and other factors. However, it’s obvious that accepting a load at a rate lower than your operational cost is a recipe for failure. 8
THETRUCKER.COM BUSINESS OCTOBER 2023 • 17 Courtesy: Landstar Peter Perez holds up the key to a 2024 Freightliner Cascadia during Landstar’s Deliver to Win Truck Giveaway. Peter Perez drives away as latest winner of Landstar truck giveaway THE TRUCKER NEWS STAFF JACKSONVILLE, Fla. — Owner-operator Peter Perez of Houston won a 2024 Freightliner Cascadia during Landstar System’s 2023 Deliver to Win Truck Giveaway. The giveaway was held Aug. 29 in Reno, Nevada. Perez was one of five finalists randomly selected from the contest’s pool of eligible business capacity owners (BCOs), the term for independent owner-operators who lease with Landstar. The truck giveaway is the highlight of Landstar’s BCO Appreciation Days, a two-day event held each year to thank Landstar’s owner-operators for their commitment to safety and customer service. “The funny part is that I wasn’t going to come to the event. I was stressed. I’ve had my truck in the shop, and I thought, ‘I’ve got to work,’” Perez said. “And then it started clicking that this is when Landstar gives away a truck every year. With the way that God moves things around, I’m just happy and thankful.” Twice a year, Landstar buys and gives away a brand-new truck to the company’s eligible leased WALMART cont. from Page 15 highway has been smooth, at least for her. “The schedule has been easier than I thought it would be to adjust to,” she said. “I thought early mornings on the road would be tough, but it can be amazing. I get to see the sun rise, and I really enjoy being out on the open road.” Walmart’s fleet combined fleet drives more than 900 million miles each year. That’s a lot of sunrises to be seen. As for her future as a driver and in her career with Walmart, Milacek said she looks forward to continuing to service customers for years to come. “This career has already been incredibly rewarding,” she said. “It’s really a phenomenal feeling.” And the rewards keep building. “The first time I ever sat in the driver’s seat, wearing my Walmart driver uniform, I was able to feel how big the responsibility of this job truly was,” she said. “Having the honor to deliver items at an incredible value to communities across the country is what I will continue to look forward to for years to come.” Milacek has a simple word of advice for anyone, particularly women, considering a career as a truck driver. “Do it. You won’t regret it,” she said. “Don’t be afraid to take the jump if it’s something you’ve been thinking about. It is making a huge difference for me and my family.” 8 owner-operators. The Aug. 29 event was the second of 2023 and marked the company’s 48th truck giveaway. “Landstar’s safety-first culture is upheld by its independent owner-operators, and we’re thankful for that continual commitment,” said Jim Gattoni, president and CEO of Landstar. “We’re proud to acknowledge and celebrate our BCOs for their excellent customer service.” Eligible Landstar BCOs automatically earn entries to the Deliver to Win Truck Giveaway throughout the year by delivering loads safely during the giveaway period. They can earn more entries for the giveaway by attending safety meetings and participating in Landstar’s monthly Safety Thursday Conference Call. After the entry period closes, all entries are pooled, and a computerized random number generator selects finalists. Finalists must be present at the giveaway to win. In July, Landstar Million Mile Safe Driver and Roadstar honoree Willie Mixon of Quitman, Mississippi, won the company’s first giveaway for 2023. 8 Courtesy: Walmart Since joining the Walmart team in 2014, Ashley Milacek has worked in a variety of roles, from stocking shelves to store management — and now as a professional truck driver for the retail giant. Great Pay, Full Benefits & Bonuses! Nebraska Atlantic Transportation, Inc. is a family-owned & operated company that has been in business for over 30 years. It is our goal to make you feel like you are part of the family and are treated as such. High miles and good pay are what we strive to provide our drivers. We offer an in-house mechanic shop, weigh scale & fuel tank, and our drivers’ lounge features a rec room with a pool table, mounted TVs, a separate TV room, washer & dryer, a full kitchen, and furnished bedrooms. Call or apply and join our family today! ★ $0.60 Per Mile ★ Cell Phone Reimbursements ★ Unloading Paid in Full ★ $40 Extra Stop/Pick-Up ★ Yearly Bonuses ★ Full Health Insurance REQUIREMENTS ★ CDL-A ★ 24 years old minimum ★ Two years OTR experience ★ Full Life Insurance ★ Home Weekly ★ Driver Apartment w/Washer & Dryer, Stocked Kitchen, Large Screen TVs & Pool Table 888.858.8217 www.thetrucker.com/nebraska-atlantic
Page 1 and 2: JOB Resources SCAN THE CODE FOR MOR
Page 3 and 4: THETRUCKER.COM THE NATION OCTOBER 2
Page 5 and 6: THETRUCKER.COM THE NATION OCTOBER 2
Page 7 and 8: Thetrucker.com october 2023 • 7 P
Page 9 and 10: THETRUCKER.COM PERSPECTIVE OCTOBER
Page 11 and 12: THETRUCKER.COM OCTOBER 2023 • 11
Page 13 and 14: THETRUCKER.COM BUSINESS OCTOBER 202
Page 15: THETRUCKER.COM OCTOBER 2023 • 15
Page 19 and 20: THETRUCKER.COM EQUIPMENT & TECH OCT
Page 21 and 22: THETRUCKER.COM EQUIPMENT & TECH OCT
Page 27 and 28: THETRUCKER.COM FEATURES OCTOBER 202
Page 31 and 32: No Long Term Contract. THETRUCKER.C

100123_TT_AllPages

Create successful ePaper yourself

Delete template?

Save as template?