So you are, or want to be an Owner-Operator.....Are You Prepared?

usafk9

Veteran Expediter
My beautiful bride and I drive a 2006 Sterling with a Merecedes MBE 900/926 engine. Beginning in the middle of last year, we began having problems with oil leaks. Having spent loads of dough having head and valve cover gaskets replaced, the problem kept resurfacing. In early December, we also had an exhaust leak. After two short runs in the Pacific northwest, and having a service buddy that lived nearby, we put the truck in the shop and enjoy some time with our friend and his new daughter. Two days later, the shop called and said that the exhaust leak was the typical flange breaking on the S-pipe leading away from the turbo, but that was the least of our problems. The cylinder head was removed, and the cylinders were mirror-smooth. The crosshatch pattern that is normally present, was gone. I called two other Detroit shops, and they all recommended the same thing: replace the engine.

We were told the repair was 40 hours of labor, but the biggest wait was to order an engine to be rebuilt and shipped from Mexico (Note to self: NEVER, EVER, EVER ship anything via YRC).

We dropped the truck off on 12/3, was diagnosed on 12/5, and were promised the truck back on 1/14/13. We thought no big deal. We have paid attention to others with this engine. Ours had 654,000 on the odometer. I have heard of others whose engines dumped between 450-650, but seldom more. Ran into one couple last year in IL, who had 850k on theirs. We knew we were living on borrowed time.

We bought our truck in 2010 with 315k on the clock. Having heard the above stories, we knew we would have to budget for this. We are trying very hard to live a debt-free lifestyle, and had about $30k in the bank, specifically for a catastrophe or unexpected downtime.

We thought this would be a decent time of the year to have off, so we bought a used minivan, and drove home to enjoy our holidays in Michigan. We planned on being back in Seattle on the 12th, enjoy a few more days with our friends, and then hit the road.

The shipping took longer than expected....the engine cleared customs in Laredo on 12/27. The engine arrived on 1/12, and only because the shop got tired of hearing me complain, and went to YRC's dock to pick it up. The old engine was already removed, so I'm thinking maybe 3 days left in labor...wrong. The Freightliner shop there is owned by Gordon Trucking. I can only guess that their trucks took first place when it comes to mechanic assignments. We finally got the truck back at 0330 on 1/19/13.

Our total bill came to $22,303.84, and 47 days of downtime. We estimated, using the previous 12 months' averages, that we lost $34,625 in gross revenue. Then there were December's and January's bills. We budgeted well, but it has gotten tight. One friend asked yesterday if we were down to drinking the juice from the sauerkraut jar instead of water. While we have emptied out the cabinets pretty well, and OVM's quip about making tomato soup from the ketchup packets at the Pilot popped into my melon, it hasn't gotten that tight. We always spend wisely, and SAVE.

We started in this business driving for a fleet owner. Five months later, we bought our own truck with the last $500 to our name as a down payment. We had bill collectors at our door. The process server and I are good friends to this day. When we first started as truck owners, we were so scared of judgments levying our bank accounts, that we took all the cash remaining from our load advances and kept them in our truck in an envelope. We were living with one foot on a banana peel, and the other looking for other work. ***NOTE: I DO NOT RECOMMEND THIS FOR ANYONE IN THIS BUSINESS.......EVER.**** Those were scary times.

My wife is the nerd. I am the free spirit. I used to take large financial risks. Not any more. I made promises to her, when we bought this, our second truck, that we would climb our way out of debt. We have three debts left. We have paid off well over $100k, and there are no more wolves at the door. We own our own home again, and now have credit (though seldom use it).

The point of this post is this: DaveKC has mentioned a bazillion times about the need to be properly capitalized in this business. We laid out our 2013 plan, posted on a cabinet door in our sleeper, to rebuild the emergency fund, and continue to pay off debt. This escapade was a huge test, but it is one we prepared for. We knew the worst-case scenario, and planned well for it. We eat in the truck most days, and seldom buy new things. We don't skimp on or put off truck maintenance items, and drive with an eye on our fuel economy. We are fortunate to be leased to a carrier who keeps us fed well with freight, and has allowed us to prepare for this financially as well as conquer the debt. Having a decent savings account got us through this hump. Some drivers and owners complain about slow months, but December and January are usually decent months for us. If they're not at your carrier, could you survive this hurdle we just faced? We're back on the road now, doing what we love. However, we could have just as easily been looking for a job, because we weren't adequately capitalized.

Are you prepared?
 
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OntarioVanMan

Retired Expediter
Owner/Operator
what?...no splitting of the hot dogs either?....LOL

Great story...and hope 2013 is good to you both....:)
 

usafk9

Veteran Expediter
Wait.......you have to buy a hot dog to get the ketchup?


Thank you, and the same to you two.
 

BobWolf

Veteran Expediter
Owner/Operator
I too have experianced the rewards of ownership a few times turbo, front axle boring pins and steers, rear leaf springs, major jump in insurance, all within six months.
Hope it all works out.

Bob Wolf.
 

zorry

Veteran Expediter
I've been through a similar winter.
Except we have a new truck.
My wife has one daughter who has a pair of beautiful 28 month old twins.
Single parent. Father never saw kids and is now deceased.
The daughter,26,suffered a stroke the last Saturday in Dec.
We flew from west coast to east coast.
Also bought a van.
Things are going well. Daughter can walk and talk. Hasn't driven and can't write.
We moved her to an area near Turtle. Near family that can look in on her. We put 3300 miles on the van and sold it today. Will be back in the truck this weekend.
Even with the new truck, we knew we needed a large cash reserve. We thank our Lord that she is doing as well as she's doing.
 

davekc

Senior Moderator
Staff member
Fleet Owner
I do harp on this topic pretty frequently because many things can "upset the apple cart".
Everything from truck mechanical issues, health issues, family issues, carrier issues and accidents. Even if it isn't your fault and you have coverage. It may take months before you see any money back. In states that are "no fault", you may get your coverage, but nothing above that. Especially if you factor "lost revenue". Many of these unfortunately have brought down the unprepared when the truck is down for weeks. Happens all the time.
I also think some nameless carriers need to understand those demands when trying to run cheap freight. See it here on EO all the time.
It is great to see someone that did the necessary planning, and while not fun, had a positive outcome when it was finally all said and done. My hat is off to you guys!:)
 

BobWolf

Veteran Expediter
Owner/Operator
I tell newbies to have at least three to five grand preferably cash in a savings account as an emergency repair fund. Mine has been gone for a couple years now In that department Im walking the edge hopefuly I can rebuild my emergency fund in the next few months.

Bob Wolf.
 

zorry

Veteran Expediter
Bob,Time to raise your rates.

We're off work 5 weeks. Checking account dropped $17,000 in 8 days.

I'm not going to figure what this cost us. Just thankful that we were able to help the kids and not worry about finances.

Time to get to work and rebuild the savings.

And wait for life's next little speedbump.

Note,if you're just getting by, you're not doing okay. Change something. If you can't progress financially you're one phone call from failure.
 

BobWolf

Veteran Expediter
Owner/Operator
Zorry.
Are these rates about right for an O/O running a S/T I dont want to price myself out of the game either. Truck $2.16 - $2.65/Mile Van $1.85 - $2.10 $/mile depending on shippers insurance needs most at the lower rate I do tack on a lower rate to cover deadhead and if its over 50 miles.
I have a couple high value freight customer so, I have to carry a high value freight policy it dosent matter what I carry they require it everything from an envelope to a full truck. I may just have opened up an oportunity as both shippers gave notice to thier other carriers that they will have to secure the coverages or they cant work. Hopefuly my only competetors will be the mega carriers that cant handle the priority 1 shipments.
I also received some December and Jan invoices in this week so, I made my Feb insurance payment early i'm done for a couple months. This years rates will be five or six hundred bucks less a month as its starting ealier in the policy year. and if all goes well I will have the truck paid off in a few months.

Bob Wolf.
 

TeamCaffee

Administrator
Staff member
Owner/Operator
Great Post AJ and a reminder of why we always preach have reserves. Thanks for all of the detail also that took a bit to recreate.
 

skyraider

Veteran Expediter
US Navy
I tell newbies to have at least three to five grand preferably cash in a savings account as an emergency repair fund. Mine has been gone for a couple years now In that department Im walking the edge hopefuly I can rebuild my emergency fund in the next few months.


Bob Wolf.

One tranny, radiator,engine,2 engine computers, waterpumps,wheel bearing, it was fun in the 2 years I was out there....van was old, but paid for.....amen its grazing in a field now, still starts and runs well, but out of date for expediting.
 

rollincoal

Veteran Expediter
Owner/Operator
Have felt the pain, any owner has or will at some point.. that's truckin... I blew thru $28K last fall when my motor went down and had to be inframed. Most of that was on the inframe but a nice chunk of it was also on other components that I decided needing replacing while the truck was in the shop. It really sucks to ever have to pay a bill like that and took several months of busting it to get that money back.. ..but grateful the money was there. I cannot imagine having to finance something like that. Those funds weren't in the bank just by accident. Debt free and keeping a sufficient maintinence fund is really the only way to truck.. There is enough stress in trucking without having to worry about bills.. Also having debt will lead one to make poor choices, whether that person admits to it or not... Hazzard a good guess here that most of the trucks and carriers running for what some of us would (subjective I know) call cheap, are saddled with debt and "must roll"... ....without debt you only roll when they pay a rate, the pressure of bills is gone *poof*... The best advice I ever see on this or any trucking forum for newbies who want to be owners is to take the time to do it right, all cash in... And it really irks me when some people say "that can't be done"... ....cant be done, cant be done, can't be done.... what an attitude to have starting up a new business....
 

blizzard2014

Veteran Expediter
Driver
I too have experianced the rewards of ownership a few times turbo, front axle boring pins and steers, rear leaf springs, major jump in insurance, all within six months.
Hope it all works out.

Bob Wolf.

Did progressive hike up your insurance rates too? It's getting tough out there these days.
 

blizzard2014

Veteran Expediter
Driver
I've been through a similar winter.
Except we have a new truck.
My wife has one daughter who has a pair of beautiful 28 month old twins.
Single parent. Father never saw kids and is now deceased.
The daughter,26,suffered a stroke the last Saturday in Dec.
We flew from west coast to east coast.
Also bought a van.
Things are going well. Daughter can walk and talk. Hasn't driven and can't write.
We moved her to an area near Turtle. Near family that can look in on her. We put 3300 miles on the van and sold it today. Will be back in the truck this weekend.
Even with the new truck, we knew we needed a large cash reserve. We thank our Lord that she is doing as well as she's doing.

Sorry to hear about your daughter in law. People take things forgranted. Even young people can have strokes. I will be praying for her.
 

zorry

Veteran Expediter
Thanks.
We immediately had somebody give
her an aspirin and the paramedics got there quickly.
She's walking and talking, which we do take for granted. We're very thankful that she has recovered this much.
A full recovery is possible because she's young and strong.
As far as EO goes,every husband/wife team needs to think what if.....
My wife may still have to get off the truck. If she does it will change things dramatically.
We don't think that'll happen but we'll be apprehensive each time the daughter calls.
It was a shock and reality check.
 
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