Market Perspective

You’ve been a member here since 2011 so you should be very aware that there are boom and bust cycles. And you should know what the rates were before Covid. The thing now isn’t just the low rates for some and higher fuel, it’s that the cost of everything else has gone up. Back in 2012 when we had $4 fuel and everyone thought the world was ending the cost of everything else was reasonable. Nowadays thought the cost of everything else has risen with inflation, and there are simply too many trucks because people ran out when rates were high thinking they were going to get rich.

All it takes is one look at the Truckpaper to see where things stand. It went from zero new or low mileage trucks to hundreds available now. A couple days ago there were over 60 2023 Peterbilt 389’s available. Some new, some with less than 100k miles. All the guys wanting trucks last year from my salesman and offering tens of thousands above what the truck cost are now calling him looking to get out of them. The spot market tanked and they’re not having fun anymore.

 

Anyone driving for 5 to 10 years should have realistic understanding of the trucking industry. I was an O/o back in 2000 and I found thing to be more difficult than now considering I was a lot younger, bought a used Pete but didn't have an reserve in my bank account when things went bad & they did. As much as I'm trying it again for the 2nd time (much older, mature plus some financial stability) I learned in life never panic and think things through with the good & bad. What goes up must go down and vice versa. I never wanted to sign onto a carrier however considering the circumstances occurring in today's market its a much better option than running on a load board hoping for those $3/mile loads if any. I believe things should start fixing it self by 2024 and in 2025 rates should be normalizing around $3.50/mile. I hope to run my own Authority then whiles it becomes a waiting game. I'm sticking to my same objective goals of less money spent on non essential things, bank the most for the rainy days.

 

I got into trucking late in life (age 55) because I retired from a 30-year insurance career and didn't want to sit around for the rest of my life. It sounded like a lot of fun to me because I loved being out on the road. After getting my CDL, I worked for 3 carriers to learn the ropes, then bought my own new truck and reefer. That was 2018 and the rates were pretty low at that time. Before I pulled the trigger on becoming an O/O, I established some direct customers that I met working for carriers and asked them what they needed that they couldn't get from their current carriers. Long story short, I did very well for 3 years but I wasn't prepared for the physical limitations my now 61-year old body had. My back and knees were failing quickly and my elderly parents needed me around more. So I hauled my last load in October of 21 and sold my 3 year old equipment for more than I paid for them new. While the money was pretty good when I retired, my return on investment wasn't as much as I had hoped for when I became an O/O. Had I stayed in the business until now, my ROI would have been much smaller and I would be making my exit plan.

A lot of drivers do it for the love of being out on the road and freedom to be their own boss. Believe me, I get it and would probably have stuck it out if I was 20 years younger. But knowing what I do now, if somebody were to ask me if being a trucker was a good career choice, it would be difficult to answer. You need a business mind to survive as an O/O for the long-term, and there are some company jobs that pay well and are great, but those great ones are few and far between. I would tell anybody thinking of becoming an O/O now that it's not a great idea if you value a lot of free time and want to make enough to do fun things with that free time. I was lucky that I had other revenue streams to fall back on when I left trucking, but most don't have that kind of flexibility. Being an O/O is a boom or bust business, and from what I've seen, the boom times are much less frequent than the bust times.

 

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I often wonder whether it be taking out a mortgage or starting up a new business as an O/O how many people give consideration to the what ifs. What if interest rates were to go up? We will often here the media raving on about how people are doing it tough after a few interest rate hikes but did the borrower consider this when they took out the loan or did they just think rates would stay low forever? The same with starting up a transport business the what if that needs to be asked is "What if fuel prices go up, and the asking rates come down can I still afford to stay in business? If yes then go ahead and start up as an O/O, if not then your better off just working for somebody else and not have to deal with all the extra stress. I often think of the bible example when Pharaoh of Egypt had a dream and only Joseph was able to interpret the dream telling him " you will have 7 good years and 7 bad so during the good years start preparing for the bad years and stock up on food." The Pharaoh of Egypt not only listened to Joseph but gave him authority second only to himself.

 

Here's my two cents.

In the realm of profitable businesses, Trucking is probably on the bottom or close to it. There are businesses out there that make astronomical amounts of money. Trucking is about pennies honestly.

The upswing is not really that great and the downswing is pretty serious.

In my own opinion if Trucking is what you like to do, if you want to be successful pay off everything that you have. Pay off your house pay off your Loans pay off your credit cards if you've got a wife that likes diamonds and Furs kick her out and let the next sucker take care of it.

Once you get to where you have no debt and everything is paid off then you need a truck and trailer that you have no debt. Ultimately it's best if you can fix it yourself because not only are you going to wait they're going to rip you off ...happens all the time.

No the best answer is to carry no debt and have low living expense and then whatever you make is yours. Then hang on to that money because you're going to need it.

 

That's the key to success...And one should also understand that the meaning of success also embraces 'no failure'.

 

I don’t know, I make so much money in trucking I pay for 2 houses, mine and my mechanics.

 

Very well said

 

Lots of respect to @SteveScott .

He's one of the few people on the site that really ran his business as an actual business. He didn't go buy a truck and then try to figure out how to make money.

Some of us have different skills. I'm fortunate because I can do my own mechanical repairs and I can fabricate and I can do whatever that way. But I wish I had more of that real business savvy like he has.

The story is quite interesting to me because like any really good businessman there's always just a little bit of luck, but the luck is really your own hard work. He came into it at the right time and he sold out at the right time and he did great in between and he moved right into something else, although with his business background he probably has many avenues that he can move down with great dexterity if needed.

Whatever he's willing to tell any of us about running a business or making money, everybody should listen.

All of us would be better off if we could Implement those kinds of skills..