Should you add drivers or build a fleet and is it worth it? What are the pros and cons? Over the years, we have known friends and others that took the leap and immediately started building fleets. Some have been very successful but many have crashed and burned. It is natural to think that you can grow, thrive and multiply your earnings and success. In theory it seems so easy but is it?
Are you better off just managing your own Authority and be happy with that? This business seems to eat up equipment and drivers. Can I grow and manage another driver while managing my own business? Some of the best laid out plans have turned into horror stories. There are a lot of consequences that will determine your future in this business.
Managing Costs
First thing I want to point out is, times have drastically changed. What used to be manageable (fuel costs) determined making a profit vs breaking has gone completely in the wrong direction. My own experience was that fuel at one time constituted about 10-15% of your revenue. Now, I have been spending between 20-25%, and more at times.
The proverbial pie that determines your expenses (profits, fuel, insurance, truck payment, trailer, hotels and tolls, meals, and driver pay) has been re-sliced with smaller pieces. That doesn’t even touch taxes and other regulatory costs. A lot will be determined on your formulation for paying your driver or drivers. Does he get his cut before or after fuel costs?
Now we must look at, are your drivers using your equipment or their own? Are they using your insurance and Authority? Using your Authority is probably the most beneficial for you as the owner operator. You get a percentage of what gross. They pay their own fuel… you get them loads and manage them. However, let’s talk about the downside to all of this.
I have a best friend who has four trucks. When they aren’t having mechanical or trailer problems, he is looking for drivers, training them, and then they flake out. When he is making money, it is usually to catch up on the bills from new motors, transmissions, and axles. Real talk. Mechanical engine, trailer, transmission, fuel injectors, turbo, are a part of this life, so that must be figured in. Oh, did I mention tires? Had to replace 5 on my trailer last week.
Downside of Adding Drivers
Every driver on your Authority, whether using your equipment and insurance or not, is your liability. Whether they are on duty or on personal time they are accountable to your CSA score. This can make or break you for a period of 3 years minimum. I know because it happened to me.
Let’s talk some scenarios. I had a good friend who had been been driving for years. They had new equipment but were non-cdl, therefore not versed in the many FMCSA, State and Federal DOT regulations. To be honest, not many are, including the officers that enforce them. How many of us know the ELD mandate regulations to the letter? I have seen so many arguments on PC time, everyone has their own interpretation of it.
So, my driver got hit in Wyoming by DOT and was put out of service for 3 violations. The violations were ELD log, their DOT numbers were not visible from 50 ft, and their breakaway cord was not attached correctly. I am thinking that I can still save my insurance by releasing them from the authority just to find out that it doesn’t matter, I’m hit. $2500 more the next year on my insurance. I got it down some the next year but because I had two level one inspections with 100% grade. That is the ONLY thing that will bring your CSA score back up.
I have so many other horror stories that come to mind just from friends in the business. My friend Maurice just expanded his car hauling service. He went semi and put a driver in his hotshot rig. Three months in, his driver gets hit in Sherman, Texas. Their trailer brakes won’t stop the truck from a roll, a very common situation. So, the driver decided to drive another two months and gets put out of service again with three more violations right about the time his insurance is set to renew. He calls me broken and destroyed, “Bro, my CSA score is 650 and I am out of business. They want to raise my insurance to $6000 a month. I can’t pay that.” I feel so bad for him. This is part of the motivation for this blog article.
You want more horror stories? My friend Jason told me he had a good driver but got a speeding ticket on his own personal motorcycle, on his own time. It caused his insurance to go up $6000.
Finding Reliable & Qualified Drivers
We have been talking because he is looking for a driver and only wants to find a CDL driver. We started talking about how hard it is to find a good driver. So many don’t want to go out on the road and be home on weekends. Drive locally and not take too big of loads… all the things that make money. They don’t always take care and maintain your equipment, they smoke cigarettes in it or don’t keep it clean inside and out. They often don’t have good time management and HOS skills, something that makes or breaks you in this business.
They must follow the law, secure loads correctly and be motivated to make money. Now I know I am going to hear some of you say, I have great drivers, they don’t need CDLs, I make money. Yes, I know they are out there. I know many people who have great teams of drivers and growing fleets.
I saved the really bad scenarios for the end. Do you know how many posts I have approved on our groups of members that had a driver just disappear and steal and sell their equipment? You think I am lying, wish I was. I remember one of our longtime members had me posting on all our groups about his driver and equipment disappearing for two weeks. One morning about two weeks later, it shows up in front of his house.
I was talking to a friend Mandy who rents and leases to own trailers and we were talking about how much equipment is stolen. It had me so worried because I was down in the valley where trailer theft is high. I parked literally in front of the room.
Hiring Drivers
So, what about all the dispatchers and fleets that jump on to every post when someone asks “I am looking to lease on with someone or need a dispatcher?” I am constantly amazed and dumbfounded at all the responses they will get. “We will add you to ours, we are looking to add drivers, you can lease on with us.” This is without knowing a thing about the prospective driver.
Do you know his driving record and does he have experience? This is just stupid and reckless. It is desperate and greedy, to be honest. This is your business, investment, time, trouble, and money. Why would you take a chance on an unknown just to make a few dollars that might cost you thousands and effect you for years?
What if they wrecked, killed someone or themselves? You might never recover. I see this all the time on all our groups. It is part of the reason we developed our driver directory and dispatcher directory, to vet them both.
Some things you can do to reduce your risks is hire and train drivers yourself. I would not hire a driver unless I personally had him drive with me for a minimum of two weeks. Screen them. We haven’t talked about drug use… weed smokers, alcoholics. We’ve all been there. I am not downing what a person does in their own time but if you’re going to risk your Authority, insurance and CSA score… Your business and investment. You need to have a handle on all of this.
Train the driver in proper use of ELD, securing loads, laws, and weigh stations. My best advice is to get Prepass for ALL your vehicles. That way the time spent in weigh stations is cut by 90%, less chance of a bad inspection. Second best advice, get a GPS Tracker and hide it in your equipment, truck, and trailer. Get an Owlcam dashcam or another good brand that can monitor inside and outside your truck at any time.
We pretty much covered most of the negatives. I didn’t start out to be negative or scare you out of wanting to grow. You should have a desire to grow and build your own empire. We just wanted to highlight some of the pitfalls. With all great things, comes risk. There are a lot of great people making money right now and growing. You just have to operate smartly, invest in the best equipment, make good decisions, and to hustle.
For me, I have learned to be more fiscally responsible, to manage my income and bills. It doesn’t take but a few weeks to get behind with fuel bills and repairs, that you’re trying to catch up on all the time. I pay attention to details more and try to use less fuel when possible. I only take loads that I am going to make money on. Cheap freight will kill a small business faster than anything. Also, keep up with your bookkeeping. High fuel costs have changed the dynamic of bookkeeping. You have a lot to write off and keep your taxes in check.
We are going through tough times but the market will adapt. We will adapt. Freight is coming up in some cases. Fuel costs should go down someday, we hope.
I will let all of you grow your fleets. I’m waiting for the markets to correct themselves or crash and burn. I want to keep my overhead down and don’t feel the gain is there to overcome the risks right now. What are your thoughts?
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