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As the attitudes of the nation rightfully turn "green" toward the environment, the attitude of the trucking industry, from an environmental perspective, turns a much nastier shade of an ugly color with each passing day. The SmartWay initiative of the federal government is a joke and has amounted to no more than a "feel good" placebo for tree hungers from coast-to-coast. The soaring costs of green initiatives as they relate to Class 8 vehicles will certainly be passed to trucking businesses and individual buyers. This amounts to an additional cost upon an already burdened and cash-strapped industry and represents an operational cost which will most be paid directly from the carriers operational budget.
The rising costs of fuel surcharges on the nations shippers and freight payers is now being challenged by many large corporations under the guise of a "leveled" fuel cost initiative. Trust me, when a shipper brings in a company that promises that they will lower the shippers freight costs by leveling their fuel surcharge expenditures and also promises no loss of revenues to the transporting carriers, eyes and ears must be finely tuned to their presentations. The money is going somewhere and I'll guarantee you that it is not into the carriers bank account. Some truck stops with maintenance facilities are now charging a non-account up charge to customers who do not have a national tire and/or maintenance account. Normally, only the larger, national trucking firms have national accounts, therefore the new business start-ups and owner-operators are paying a higher fee than larger companies for a repair. This has always been the case, but the gap between the two is widening every day.
The fuel discounts passed to large trucking corporations versus companies of less than fifty power units is amazing. I know, with first hand information, that one large, national company, spent an average of $1.67 per gallon of diesel fuel in 2009 while the average retail price being paid by small companies and owner-operators for the same year soared well past $3.00 per gallon. The fuel consumption of late model equipment averages 1.5 to 3.2 miles per gallon better than equipment manufactured prior to 2007. Because of the price increase across the board for this late model equipment, small companies and owner-operators most often find these trucks to be out of their price range which increases their operational costs in comparison to their larger competitors who are, as mentioned previously, already buying their fuel with deep discounts. The combination of these two single factors nearly wipes out any competitive edge that a small company or one-man show could ever hope to have against their larger competition.
Now lets talk governmental regulations. A trucking company of twenty power units spends nearly $30,000 more annually to maintain governmental compliance today than in 1990. Yes, the roads are safer, equipment is better maintained and we have a smaller carbon-footprint than before but, who do you think has burdened the cost of this expense? You guessed it, the trucking companies. $30,000 from the operational budget of a twenty truck fleet would average about 1.5% of their gross revenue which seems a small amount, but that 1.5% of gross receipts translates to a whopping 8.5% of pre-tax gross profit from that same twenty truck fleet. This coming from an industry whose average pre-tax gross profit hovers between 13 and 17% and you'll start to see how important that 8.5% is to the small guy or company. Then we come to the discussion of rates. Some would say you just have to charge more for your services and I would certainly agree with that except for one small caveat to that notion which is competition. If anyone believes coming into this industry that its not competitive then please go ahead and take that minimum wage job at McDonalds because I will promise you that you'll be more successful if your that naive of the trucking industry. Make no mistake, this industry is as cut throat as any in this nation.
Then there is the guy that believes that his service will sell his higher priced rates. And, to that you'll also get my agreement when you're dealing with small, home-town shippers. Until they are bought out by their larger competitors or they are forced out of business because they paid their buddy too much for his trucking services, and their other buddy too much for his lawn-mowing service, and their other buddy...you get the picture. Lack of service will certainly get you thrown out of a shipper but rarely, these days, does the promise of excellent service get you in the door. The almighty dollar leads the way in this business and don't ever forget it. So, to answer the original question of how to start a profitable trucking company I would start by saying the best way is to work at first with a local shipper or two and get established. You MUST closely watch every penny of income and every 1/2 penny of expense or you'll be out of business before the end of your first quarter. Know your operating costs per mile up front before you commit to your first load and make damn sure to hold the margin of profit at least 12% above your operational costs in the beginning. Trust me, you're going to find this hard to do unless you have a brother in the traffic department at your customers location who can funnel you extra dollars under the table which is, by the way, highly illegal not to mention unethical.
There is a certain romantic lure of the road and of the owning the eighteen wheels that are pounding the pavement. For me, been there - done that and got the T-shirt. For you, only time will scribe your mark of success within this industry. Make no mistake about it my friend, the odds of success in this business are not in your favor and the hounds of large corporations work hard at seeing that it stays that way. If you're nimble enough, smart enough and watch every red cent like its your last, then you may have a chance. Otherwise, you're doomed to the ranks of thousands before you who have tried and failed.
Good Luck!