In case you haven't noticed, many carriers are having a really hard time recruiting good solid drivers for over-the-road operations. It seems few drivers relish the prospect of being gone for weeks at a time. Imagine, then, the difficulty of convincing that ever-shrinking crowd of drivers to take on the financial liability of truck ownership in a very unpopular sector.
New trucks are realistically beyond the reach of first-time owner-ops and even small trucking companies. With prices ranging from $160,000 to $175,000, for something a year old or less, the repayment plans just don't work.
Even late-model used trucks may be out of reach. A glance at a few used-truck retail websites shows pricing on five-year-old, half-million-mile trucks is north of $50,000 in many cases. Less expensive trucks have much higher mileage. With such a truck, you'll have a hefty note to tote on top of the inevitable repairs and electronics problems.
No wonder then that 10-year-old trucks are very hot tickets right now. Many small fleets and single truck operators are foregoing the luxuries of a new truck and sticking with something affordable that works – and keeps working.
A Numbers-Only Approach to Truck Buying
Larry Long is one such fleet owner. He's Business Capacity Owner (BCO) – a fancy term for owner-operator or small fleet owner – with Landstar, based in Nicholasville, Kentucky. He has been at this for more than a decade now and he says his buying strategy has yet to let him down.
Long comes from a business background rather than a trucking background, and he looks at running his trucks totally through a business lens. He credits SiriusXM radio personality, Kevin Rutherford, with much of his success over the past 11 years in trucking. He takes a numbers-only approach and drills deep into ways of maximizing profits through sensible spec'ing and maintenance practices.
"I don't have any emotional attachment to a truck," he says. "The chrome doesn't mean anything to me. A truck to me is simply a tool and I look at it strictly from a numbers perspective."
He's currently running four trucks of between 2007 and 2010 vintage. His first truck was a 2007 Freightliner Columbia, purchased used in 2009. It's still running, now with 1.6 million miles on it, and aside from routine replacement of things like starters, alternators, brakes, tires and the like, he has only had to replace a turbocharger. The engine has never been apart. His newest truck is a 2010 Cascadia.
When buying, he looks for clean truck with good bodies and cabs. He's not worried about the engines because he usually rebuilds or in-frames them before putting them on the road. He says that gets him another million miles out of the engine with a year or two of warranty in the bargain.
"The 12.7L Detroit Series 60 is a solid reliable engine," Long says. "It's well understood now, and relatively easy and inexpensive to repair, so my truck choices were based on the availability of that engine. Freightliner was the obvious choice, but I did buy a 2001 Volvo with a Series 60 and that performed well too."
The Business Strategy
Long approaches the purchase of a truck with a budget of about $50,000. He looks for a truck with the best cab he can find, with a good dash and good interior. He says that's generally a sign the truck has been well maintained. He's not worried about the engine because he will rebuild it anyway. His target truck will cost about $15,000 to $20,000, he'll spend about $30,000 rebuilding the engine at a Detroit Diesel facility using genuine Detroit Diesel parts to get the warranty – which is usually nationwide through the Detroit Diesel network and TA Travel Stops.
"Bad cabs usually have bad wiring, so I avoid those entirely," says Long. "The engines are easy to rebuild and repair, but the cabs and all the wiring can be a nightmare and the dashes are falling apart. It's cheaper to rebuild a motor than fix up a cab. And, it's a lot harder to recruit drivers if you're going to put him in piece of junk."
The low-cost business model can pay huge dividends. Long says each of his drivers is earning between $90k-$100K a year. "I couldn't afford to pay them that much if I was tied into a big truck payment," he says.
He also mentors his drivers into ownership if that's what they want to do, helping them find and buy a truck and coaching them on how to manage their business. "Nine out of ten first time owner-operators fail the first time around because they bought too much truck," he insists.
Although the trucks are older, they must still be kept in good mechanical condition. He says Landstar requires all its trucks to undergo a full DOT inspection every 120 days. His current fleet fuel economy is running between 7.5 and 8 mpg, so he not giving anything up there either by running older trucks.
Putting the Fun Back into the Job
Ron Basi, owner of an 18-truck fleet called JenCam Transport, and a sux-truck driving school, CSTT Driver Training, based in the small Vancouver Island community of Sydney British Columbia, is another strong proponent of running older equipment. He says older trucks even help put a bit of fun back into a job that's laden with stress and financial pressure.
"Most of my trucks – the newest is a 2007 – are more reliable than the newer ones," says Basi. "I can count on them, but when something breaks, I can usually repair it myself, and I enjoy doing that kind of work."
His newest truck is a 2007 while most of the others are '04 and '05 Fords, Sterlings and Kenworths. "I make the same money with a $50,000 truck as I can with a $150,000-truck," he claims.
While Long says he's completely comfortable running his trucks 48-states and Canada, Basi tends to stay a bit closer to home, not out of necessity, but preference. He claims local and regional work pays better to begin with, often at hourly rates. It doesn't wear the equipment out as fast, and it's easier to find drivers.
"There's some cache to driving well-maintained older equipment, especially for older experienced drivers," Basi says. "Most of my drivers would rather drive a 20-year-old truck than a new one, with all the electronics and automation.
"And I have to say," he says, chuckling with obvious satisfaction, "I get calls from some of the biggest retain distributors around here to pull trailers for them when they are out of drivers or the trucks are in the shop."
Some of what's driving the appeal of older, less expensive trucks is the change in lifestyle preferences often experienced by middle-aged drivers, and the decidedly different lifestyle choices of younger drivers.
Matt Morrison of Brantford, Ontario is 40-something, and has been an owner-operator for 10 years. His first truck was a new lease-purchase truck which he paid off and then ran for one additional year. He took a bit of a bath selling it as nobody wanted the '08 and '09 models at the time knowing the Selective Catalytic Reduction systems were just around the corner.
Every truck he has owned since that one has been used – older used.
"To pay off that Pete I was on the road two to three weeks at a time, with the longest spell away from home lasting eight weeks," Morrison says. "That was then, this is now, and my priorities have changed since my daughter came along (Morrison is an active Facebook poster. His photo archive has about 30 family pictures for every one truck picture). I run local and regional now because I want to be home more, and I have much more flexibility not being under that big truck payment."
His current truck is an '09 Kenworth T660. He paid $10,000 for it and promptly put another $20,000 into it. He has had the truck for 18 months and hasn't had to made a single payment on it. Morrison figures he's spent $35,000 on the truck so far, including the initial purchase price, so his monthly cost – even though he doesn't look at it this way – would be less than $2000 a month.
Even so, it's the monthly payment he's out to avoid. He can afford to take a more relaxed approach to his professional life knowing he doesn't have to make that monthly trek to the bank.
While Basi has the facilities do most any repair he might need, Morrison, who describes himself as a driveway mechanic, says he's limited to minor repairs and a bit of tinkering. "I enjoy working on my truck," he says. "If I had to do my own work just to save a buck, I don't think I'd enjoy it as much.
"I'm much more comfortable taking the older stuff apart then the newer stuff. You start trying to replace sensors and stuff like that and the truck may not start in your driveway," he says, noting "There's a model of truck available today that you cannot even change a headlight on. While there are lots of things on older trucks that aren't worth taking to the shop, you shouldn't need to be a mechanic to change a headlight."
Dump the Debt
Debt is crippling and it can quickly suck all the enjoyment and satisfaction out of whatever it is that you went into debt for in the first place. Like Morrison, who values not having to spend every waking hour either driving or working on the truck, Long says his business model allows for a few weeks' vacation every year while still managing to save 20% his earnings.
"My business model allows me to pay my drivers generously and we can both afford to take a few weeks of vacation every year, which for me means parking the truck," says Long. "That's a good time for me to get caught on the maintenance. And best of all, there's still a nice margin for savings in there. That's the way a business ought to be."
At age 65, Long says he was planning to retire at 67 so he was letting the fleet shrink down by attrition. He's at 4 trucks and 4 drivers now, but one of them is a fellow who has shown a high degree of interest in taking over the business when Long retire.
"We're in the process now of growing it back up to 10 trucks and 10 drivers. That's my happy number," he says. "I can manage 10 without hiring dispatchers and back-office help."
And believe it or not, he doesn't have a great deal of difficulty hiring drivers.
"My best recruit is a company driver who wants to be an owner-operator but realizes he doesn't have the background yet to do it -- and has resisted the temptation of going the lease/purchase route," he insists. "I can show them with numbers and past experience that their first truck needs to be the truck I'm hiring them to drive for me. So, come work for me for a year or two and let me mentor you in my strategy and when you're ready I'll help you buy a truck or maybe sell you a truck. I help them prepare for the next stage in their careers so they will not become one of those 9 out of 10 that don't make it."
With the extraordinary cost of late model used trucks, older iron looks pretty attractive these days. As these fleet-owners insist, buying older trucks can not only keep you in the game, they can make you profitable if you research the truck before buying it or know something about it. Being handy with a wrench helps, but it's not a requirement. Plenty of shops will work on older equipment and parts are plentiful.
And besides," Basi says, "Small fleet owners can't afford to go to a dealer every time the check-engine light comes on."