Tuesday, July 15, 2008

There are a lot of things that influence the business we are in. Money, fuel prices, mortgage rates, lending institutions, holidays, EPA regulations, and the drivers themselves.

In the "good old days" the large companies like Swift, Werner, Covenant, JB Hunt, US Express, to name a few, would have lease packages with Freightliner. These companies would lease the trucks for three years then trade them in for new ones. When I started in 2001 this industry was akin to "Mobile Storage". We would pick up the "Trade Trucks" from these companies and take them to a storage lot or a Freightliner dealership. Then we would move the trucks from one storage lot to another. Our deadhead was nothing (picking up at the same location we delivered to) or minimal - 250 miles.

A market opened overseas and we began taking trucks to ports to be shipped out to Vietnam and Africa. The trade truck part of the industry was still strong and kept us busy. Things began slowing down a little by 2004 when the fuel costs were in the $2.50 range and we grumbled alot. Around 2006 the fuel prices hiked up to $3 for a while and hovered there and went back down to $2.80. Now the fuel prices are near $5 and we get excited to see $4.60 fuel. Such a deal.

The overseas market expanded to Russia. I've heard that Russia makes 20% on the money they spend to buy the used trucks before the ship even docks at their ports. Russian buyers have made a profit before they get the trucks. With used trucks going to the ports and shipped out we have that many fewer used trucks in the market here.

The EPA wanted stricter regulations on emissions from truck exhausts and in 2006 truck manufacturers were building truck engines that would emit less fumes and be fuel efficient. They had their glitches and have worked them out. The first few that went to the larger trucking companies were so bad in performance and maintenance, purchases of the new type of truck stopped until better changes were made. Some larger trucking companies were stockpiling older engines because of the glitches in the newer type engine.

Now with the cost of fuel being high, the insanity of the housing industry and lending institutions, and the general cost of doing business the larger companies are holding on to their older trucks. There are trucking companies going out of business all over the place.

These things effect us. They affect our deadhead. Typically we will go 500 miles for a load that is 300 miles long. Not very profitable. The longer trips get us in places we have no way out. California, Florida, Oregon. Any one of these delivery points mean we will have to deadhead at least 1200 to get back to work. Split loads for us is more common that it used to be. And if we take time off we have a harder time getting back in the mix for better loads.

We made our last delivery on July 2nd to New Orleans, LA and decided it was time to go home for a while. We've been home since the 4th and we are preparing to leave today for a split load. Dallas, TX for two trucks then go to Kansas City, MO for two more and deliver to Youngstown, OH. We will be pestering our dispatchers over the next few days for more work. We don't know where we are going after Youngstown. It used to be we would have a minimum of three trips planned out at any given time. Now it is harder to plan ahead.

I have to get out of here and get to packing and loading so we can get on the way to Dallas. My next posts will be from my iPhone while we are on the road.

The whining starts now.....

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