Gas over $5/gallon, skyrocketing equipment prices, increased driver pay rates. Oh, and did we mention that 55% of US owner-operated trucking businesses fail in the first 18 months?
Why on earth would anyone get into trucking right now?
Because often if everyone agrees with you, you’re too late.
Commodity industry + Disruption = Opportunity
So today we’ll break down how a former trucking accountant turned trucking business owner – makes $2,200/day with just one truck.
Spoiler alert...we might be doing a full playbook on this next month inside our premium cashflow community. If that strikes your fancy...check it out. Cashflow is like (how can we say it?) a mini-MBA getting you to your first $100k in passive income.
So today in < 10 minutes or less we’re going to talk about:
How David McGill makes $2,200/day revenue with 1 truck
Terms and lingo to know
How much it cost to get started
Ongoing fixed and variable costs
How to get your first load as a new trucking business
Two drivers + one day cab = $2,200/day (and legally)
David McGill started with a day cab (aka no bed in the back) truck with no trailer as a first-time trucking business owner. Mainly because they’re lower cost. But also because you just “drop and hook” the shipper’s load, a surprisingly quick process. Even for us less than handy humans.
Is this how you do it?
Jokes aside…
Minimal wait time between loads = less waiting = happier drivers = more time for more loads
Back to David. The key is to look for different loads. Many truckers don’t know that different types of loads exist (but you do dear Contrarian!).
You need to do your research, always be consistently building your network, persistently follow up with shippers and brokers who may not have needed your services a month or two ago, and of course - be patient.
But first… did you know apparently truckers look like this these days?
I mean… I had a slightly different visual than this… (get it, girl):
Speak like a Truck Driver
Before we dive into how to do it, we need to cover some trucking terms that apply to this $2,200/day sitch.
Day cab: Truck with no sleeping quarters.
Power only: A type of load where the truck driver moves the shipper's trailers for them. The driver’s truck doesn’t have a trailer. Also known as “drop and hook”.
Dedicated: Consistent route but NOT contract, meaning the shipper could cut ties any time.
Local: Start and end in the same place.
Make $$ Step by Step Guide
Sneaky Moves:
The customer needed these loads delivered by 5 AM the next day. A single delivery time for three loads gave David a ton of flexibility, versus needing each of the three loads at different times.
Because he used two drivers, he managed to keep drive time under 11 hours for each of them (aka where the “legal” aspect comes in).
Show Me The Money
Alright, here’s how this all goes down in detail.
Trip 1 / Driver 1:
First trailer for Driver 1 is already loaded and ready to hook up to the truck.
Driver 1 drives ~125 miles for the delivery (250 miles round trip).
He unhooks the hook trailer at his first destination, then hooks up an empty trailer and takes it back to the starting point.
Revenue = $725
Trip 2 / Driver 1:
Driver 1 returns to the original location.
Drops off the empty trailer, hooks up loaded trailer.
Heads off on another 250-mile round trip in another direction.
If Driver 1 has time before he hits 11 hours, he’ll grab the customer’s third trailer for the day and drive it over David’s truck yard to save Driver 2 a trip.
Revenue = $725
Trip 3 / Driver 2:
Driver 2 heads out on a 300-mile round trip, either from the truck yard or from the customer.
Revenue = $725
And there you have it, folks.
3 trips at $725 each in one truck for $2,175/day from one truck.
If you assume 40% capacity throughout the year that's $321,200 a year in revenue.
But how much did it cost him?
In the example above, here’s a rough profit/loss analysis:
This example is from 2020. That means fuel costs are going to be much more and take away from profit.
Okay, but what about the cost to start his business?
Costs may vary depending on your state, how you file things, and what type of truck you get. But let’s give you a rough breakdown.
What varies? Well, for example, David didn’t have to pay a DOT inspection fee since the truck he bought already had one for the year. Similarly, you will want an emergency fund starting out for maintenance and accidents. Moving forward, the rule of thumb is to tuck away $.10-.15/mile driven for maintenance.
Note: Make sure you bring a reliable mechanic to inspect whatever truck you plan to buy.
Or ya know, buy a company that is already operating and bring your mechanic to value all of their companies like this one.
As for variable and fixed monthly costs, here’s what he’s working with and what you’d be looking at too:
The goal with maintenance is to find someone who does wholesale. If you decide to become an owner/operator within an existing fleet, make sure they have their own shop.
Keep in mind, that most trucking businesses have monthly equipment payments. David paid cash for his truck, which is another reason why a power-only trucking business is so beautiful. Trucks without trailers are significantly cheaper than those with.
We cannot stress this enough when buying a truck:
DO. YOUR. DUE. DILIGENCE.
Find a reliable mechanic to come with you when truck shopping and be sure to ask for a vehicle inspection, repair, and maintenance record.
How to get your first loads as a new trucking business
You got your truck, you got your insurance, you got your permits, you found a driver (or you learned to drive a truck), and you’ve tucked away some money for maintenance.
Now it’s time to get some loads. Btw - I can’t stop watching these trucking videos.
The bad news: Many brokers don’t work with operating authorities less than 90 days old.
The good news: Here’s a list of ones that will, plus what you need to know about them as per Trucking Made Successful (another insanely helpful YouTube channel):
TQL = don’t let them low ball you or they’ll continue to low ball you for future loads
Uber freight = don’t have loads everywhere but pay you within 10 days
Convoy = can bid, and they pay within 10 days
Amazon Relay = good with power-only
Landstar = reliable, but they low ball
CH Robinson = refuse to negotiate
Knight/Swift = ton of loads in West and Midwest
Working with smaller brokers to get references that you can whip out at the drop of a Von Dutch hat (wink) is also a great way to break the “too new” ice. (Just a heads up, most brokers don’t consider TQL a reference because they are so big.)
After 90 days of an active OA? Most brokers will be happy to work with you.
The secret to finding power-only loads
David was kind enough to share his secret to finding power-only loads (ones that don’t require a trailer). Why? Because he knows most people won’t put in the work to do it. But you’re not most people. You’re a scrappy, hard-working Contrarian keen on building a cashflowing business.
Here’s how he does it:
When he’s driving on the highway, he always keeps an eye out for trucks that have one company on the side of the truck, but another name or company on the trailer it’s pulling. That (usually) means it’s a power-only load.
David will make a note of it, do some detective work, then give them a call to see if they have any loads.
Do the same when reaching out to other shippers. Let them know you’re interested in power-only loads. The next time they have one, you’ll probably be the first person to come to mind.
You never want to rely on just one route for your revenue because they can drop you for another trucking business.
Context is 🔑
We firmly believe anything is possible here at Contrarian Thinking. And while we love a good story just as much as the next person, we also want to keep it real and set you up for success.
Trucking is a highly regulated, complex industry that can take years of experience to navigate successfully without getting your a** kicked.
Every business, trucking included, will experience struggles.
Or buy yourself a big load. I anticipate automation is coming this way… but there’s always opportunity in the change and chaos.
Keep it rolling,
Codie & Contrarian Team
'Not Boring' Section
Online Biz's Hayday - We talk a lot about brick and mortars here at CT, but offline isn't the only space for acquisition. If you're interested in buying or expanding your online biz, our fave marketplace is Flippa (it just happens to be where our friend Ramon bought his first content biz for $500 and scaled it to 8 figs)
Speaking of online... - Ok maybe the first point intrigued you, but you're like "idk how to buy an online biz". Well, you're in luck because we have a playbook for exactly how to do that.
Up up and away - Ok Jerome Powell, we see you. Yesterday the fed announced a rate hike of .75%, the highest since 1994. We've seen it coming. Are you prepared?
We Raised $5 Million with One Email?!
We Raised $5 Million with One Email?!That’s right, we raised $5 million in a week from one email. Coming from someone who has been raising money by running around like a headless chicken for the last 15 years… this is WILD! Wanna see how we did it? PS...it's the future of fundraising.
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Disclaimer – This is the “Be an adult” section. Everything mentioned above isn’t advice, just a recount of what I did. That said: This article is presented for informational purposes only. The opinions stated here are not intended to recommend any investment or provide tax advice. Neither are they an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing do involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. By reading/sharing this newsletter or consuming our content on our other channels, you are indicating your consent and agreement to our disclaimer.
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