Cletes' News n Views 

Mostly Truck Stop Talk

12/2006

New processes have become integrated into many trucking operations due to advances in technology and governance... 

In Recent years: the EPA mandated changes in engines, the DOT mandated  hours of service regulations changes..,  coupled  with new and more efficient truck component ideas such as automated heavy truck transmissions and FAst digital information : cells phones, hand held communication & computing systems, the internet ...

the increased speed in communication has possibly, the largest impact of all in trucking .  Time is money.  A truck is a very expensive depreciating asset.  It follows that  the quicker one can make an informed utilization decision the better...  and,  the longer one can wait to make that informed decision the better as well... in the sense of not selling the dollar value of the decision short. (There may be a dollar a mile in revenue difference between the options)

Many of the more successful heavy truck owner operators on the highways today are working to incorporate digital communication tools into their system of operation.  

The focus on Fuel Efficient heavy trucks has not been this sharp since the oil embargo of the 1980's.  

Odd as it seems, the prospect of three dollar plus fuel, above average fuel economy and fuel surcharges has many truck owners looking at one of their most profitable years, ever.

I have roughed out a chart on some of the issues relating to gaining top  heavy truck fuel efficiency from several different perspectives.   

  Times of turmoil can also be times of great advantage for those prepared.  - is a topic I have talked about before on one page or another in the past,  but I argue the turmoil and potential for profit is more true in today's trucking industry today than ever.  

Fuel costs are of course a large issue, but the fuel surcharge, is a very profitable deal for those who are getting above average fuel economy.   

Also, the ongoing shortage of truck drivers is pushing base rates higher for bottom rung freight and typically, even more so for the niche market freight that requires a driver who takes greater responsibility for the load carried. 

There are some very bright spots around this old mature market sector  of trucks.

The last 18 months or so, I have taken great efforts to improve the fuel efficiency of the trucks I have custom built for my customers to the maximum sustainable level.  Some of the later results have been outstanding... earlier, some not as great, but still money makers.  I have some really interesting stuff being built now for anxiously waiting truckers.  

7-17-06

 Truck Fuel Efficiency is where most of the Custom truck talk is these days. 

Many new truck buyers are more concerned about fuel than any other issue... even more than the new trap engines.   A mile per gallon might be the difference between making a decent living or not when the price per gallon jumps around $3.

Truck drivers aren't totally responsible for the amount of fuel a truck uses. People like me and a few others, also have a hand in the extra of tankers of oil we buy each day. For a look at truck fuel consumption from a different perspective, check out truck fuel consumption talking points.   more

Winter 2004

Low Mileage Used trucks are in short supply.  The wholesale price of quality used trucks are higher than the retail price of last June!  Trucks selling for $50,000 then can fetch $65,000 now.  

New trucks are selling, but not leaping from lots.  Really, it was much better before Christmas. At least one manufactures order intake nearly stopped just after the 1st of the year, now late January, sales seem to be picking up.  Still, spotty at best.

 ~~

Old time Mack Truck owners moan loss of old-time camaraderie 

 "the Bulldog just isn't the same."  

Since Volvo took over ownership of Mack from the French Company Renault, more has changed than just the ownership.  It may be that the clubby Mack loyalty long bemoaned by opposing truck dealers is cracking as a sign of the times.   

Mack Trucks, Allentown, Pa. was once a stand-alone PROUD company whose trucks owned the east coast.  Volvo owns Mack. Today, Mack's and Volvos are sold many times under the same roof, built that way, too.  

The Swedish owned parent company is twice removed from the proud old Mack-Mack days.  Many think Volvo will have its hands full in keeping Mack loyalists happy and the old image of "Built like a Mack Truck".  Can it mean what it once did when the components and stores, were all Mack-Mack and  the trucking nation knew that  duplex, triplex and quadraplexes were made of iron not wood?

~~

CAT ACCERT - Cummins ISX

ACCERT so far, seems to be trouble free with slightly better than expected fuel mileage -in most cases.  Peak torque seems to be lower than Cat publishes and like their competitions  EGR engines, engine oil temperatures are higher than pre 10-2002 engines.

ISX - so far, we have heard few if any claims of better than expected fuel mileage:(  Isolated reports of sensor issues.  The popping sound heard when at least some Variable Geometry Turbo's are working properly is seldom music to the ear.  One user described it as "kind of like a backfire"?  don't know but I'd think Cummins gets the engine smoothed out, soon. Hopefully, they already have.  Cat and the industry needs the competition.

~~~~~~~

Spring 2003

The worst of the disaster seems to be over for Americas remaining 350,000 owner-operators. Some two and a half years after the used truck value crash and economic downturn, some 70 percent have survived the wreckage. According to Transport Topics 250,000 truckers recently failed. Those who remain still have a tough economy along with a fist full of industry issues to face, but there are signs of improvement.

For one thing, the nation still eats just as much and consumes about as much, so fewer truckers makes for upward pressure on rates per mile in many market segments. Fuel prices are trending lower and interest rates for those with good credit and truck ownership experience are near historic lows. There is the opportunity to start or build on a profitable career as a truck owner-operator.

It is not all roses.  Just now, some of the traditional big money trucking jobs that flourish in a strong economy, such as those working the van line markets, remain soft or spotty, while some of trucking's core nuts and bolt segments such as steel and containers are improving.

As with any career, timing, knowledge and preparedness are the elements needed to recognize the lucky break when it comes and hard work is likely to be the backbone of any successful result. Truckweb.com remains committed to providing ideas and information toward owner-operator and small fleet success, all the while.

Thanks for visiting.  Clete

winter 2002-3

Repositioning

A few weeks ago an owner operator told me that; "if a trucker couldn't make money now, I don't see how he could ever make money." Of course, this guy has found his niche market and is working it. For many of the experienced truckers who have worked their way to the top of their specific markets ...life ain't all that bad.

That said, we have lost nearly two of three heavy duty truck owner operators in the past ten years (and I am guessing we lost half of those in the past two years).  Hauling cheaper commodity type freight, the wrong truck or components, the economy, possibly the wrong personality and as much as anything, an industry that steps on and takes advantage of the little guy with every opportunity are some of the reasons for our loss.

October 1st is now behind us, the new and unproven truck engines are here and as expected; truck buyers, particularly the owner operators, are taking a break after cleaning off most of the early(pre price increase) pre October engine new trucks and about all of the low mileage used trucks.

There is opportunity available to those who want to be their own boss and own a heavy duty truck.  The truck manufactures, dealers and support infrastructure needs customers ...partners.

With an economy that is surely close to its' bottom and even now a shortage of good owner operators, there are ways to make a good income and build assets.  There is a need.  Now is the time to choose what to haul and the partners who help you do it very carefully.  Clete

fall 2002

OPPORTUNITY lurks where chaos reigns.

Wow!  The last year or two has been an interesting ride for any of us that call the trucking industry ours.

In my town, Fort Wayne, Indiana, all the new truck dealerships other than our KW store have gone out of business and/or changed ownership in the last few years.  North American Van Lines, long a giant industry stalwart -has new, non trucking owners.   

Mid size area fleets, truck distributors and even a manufacturer of specialty trucks have been sold to corporations (probably for way too much money), then the hapless corporate buyers ending up filing for bankruptcy only a few months later, then in some cases selling what they purchased back to the original owners for a small fraction of the original price.

GadZooks! 

Now the 10-2002 engines are around the next turn.  Yes, this engine has pushed up the value of good used trucks some, but the risk involved in owning these new engines can't be ignored either.  Big mistakes put individuals and companies out of business.  The 10-2002 consent decree the engine manufactures signed was a big mistake, at least in terms of the damage and risk it will foist on others.

Even if the engines turn out OK, chances are that enough able buyers will not buy the darned thing.  The popular perception is: "Who wants the risk?"  Who makes the truck payments if the engine breaks?    Other uncertainties, talks of war, oil price spikes, corporate finance scandals... make for shaky economic forecasts.  

This near certain shortage of buyers of the new engine trucks means even more dealerships and OEM manufactures or their suppliers will fail.

Ironically the resale value of these 10-2002 engine trucks is likely to be very strong.  So very few new trucks have been built in recent years that a used truck shortage is almost certain down the road ...assuming Americans will still be consuming tooth paste, toilet paper and all that goes with it, freight will still be moving.

Meanwhile, if you are looking for opportunity, there are and will be voids where owner operators, suppliers to the industry and trucking companies have left the market place.  

So, opportunity seekers ...Keep your eyes open for niches that might work for you, I can't tell you what they are but if you are looking you will recognize them when you see them. They will probably be in places where the big guys don't dominate, or don't offer the personal level of service necessary to satisfy the customer.

Be careful out there:))

-Clete

March 2001 - 2002 Truck Model Year

While many theories exist as to why we are experiencing a new and used truck crisis in America, the one sure thing is that it is an industry wide problem that is causing an adverse effect on each of us. One relatively painless partial solution is to eliminate the 2002 model year, if not in total, at least until Jan. 2002.

There aren't many people standing in line for the 40 or so 2001 models sitting on the truck sales lot I have paced the past 15 years. If I didn't have a model year change to worry about those trucks look far less intimidating. I just returned from a Florida trip and saw similar lineups at every truck dealership I passed by. I doubt many of those dealerships are anxious to add 2002 models to their mix.

An absence of 2002 models should also have the effect of pulling up used truck values, or at least slowing their fall. Since model year is the first criteria in determining used truck values, the absence of a year should have the effect of eliminating one value step downward. This would be of mid and longer term value to each truck owner in America and may also have an immediate positive psychological effect. We could use that!

For the truck manufactures it should also be a plus. Manufacturing trucks that people don't want has helped create this problem. Returning to a mode of manufacturing only sold trucks or trucks their dealership base has confidence they can sell will put capacity and demand in better balance and improve the long term viability of each brand.

This is one action step toward making the coming difficult months year a bit more manageable by removing one years monkey off each of our backs.

Lynn Doctor
Fort Wayne Truck Center
truckweb.com

Did your supply truck run last week?

America, love them or hate them, trucks make things happen! 

A working heavy truck is the marriage of man and machine that drives the worlds economy.   Without trucks our cities could lie only on the edge of tracks or at deep water. What man, woman or child in America  doesn't count on trucks for daily survival?

Gosh, you would think trucks would be appreciated!?  ...everymans'  hero.

The reality is; we are not paid particularly well, we have terrible hours, our workplace is overcrowded with all to often angry roadways and we are allowed no excuses for late pick-ups or delivery.  Then, piling on, we get   daily the media thrashings, price increases (from everywhere), all this plus DOT, EPA, FET and various other governmental 3 letter words...  

Oh well, we are needed and will remain and occasionally prosper (there will always be some bright spots, too). It looks like this site will have things to work at, discover, share  and talk about for a long, long time.  

877.269.0148 truckWeb Central- We've got em!  Work trucks, Dump trucks, Big rides too! Studio Sleepers, Custom Sleepers... either on the lots or on order.

truckCycle truck ownership system for success ...amazingly low  cost per mile track records.

Custom Trucks  really the only way to get the lowest personalized risk and highest profit potential.

The Federal Excise Tax on new truck purchases is not likely to go away but it is time for change. The way FET works today; we pay an additional 12 cents per dollar of cost for the truck and for each safety or efficiency item we add to a trucks content.

This tax structure encourages all truck buyers to buy less efficient and less safety oriented equipment. This is not good for truck buyers or the population they serve.

Meanwhile, the larger the fleet, the less tax the fleet pays because dealers and manufactures significantly lower their margins, thus the taxable truck price to volume buyers. The smaller fleets and owner-operators pay a disproportionately larger portion of this significant federal tax.

If the average FET for all trucks sold is $8,000 (for example) then a better, fairer way to apply the tax is $8,000 FET for each truck sold. This "Flat Rate FET" would take away one government sponsored advantage to the largest players, allow the smaller to be more competitive while allowing desirable truck specification choices and enhancements to stand on their own merits.

Nuances of change are required for a vibrant trucking industry poised for a successful future. One action step you can do is call or write your congressmen. We can't eliminate the government from our trade, but we can make it wiser.

E. Lynn Doctor
Fort Wayne Truck Center
truckweb.com

Oct. 99

Huge Crash Kills many used truck values...

- Transport Topics article opens eyes, late summer auction wholesale values on some aerodynamic fleet trucks  drop 10-20 thousand dollars over 4 week period.  Ouch!  Street word claims some Freightliner and Volvo owners and dealers with large inventories are mortally hurt.

FLD and WIA Owners hit hardest with more trucks than buyers.

Meanwhile,   "0 down" deals prevail as a method to lure green O/O wanna be's into undesirable used iron and take dealers and manufactures off the hook. 

Supply of classic KW W900's still below demand, values hold.

TruckCycle™ owners, largely unscathed, a few nicked but most watch bullet go by!

$3.00 per Mile?  ...maybe, not that high, but rates must improve. 

Fewer hours - fewer drivers

For the first time in memory, many truck owners are in a position to demand significant and incremental rate hikes.  Recent articles in Transport topics suggest many trucking companies have received a 5-10% hike before crude oil went to $30 a barrel.

While insurance and fuel costs are key concerns, the largest ongoing issue is the shortage of drivers.

Simple supply demand economics is in force. We all want to eat drink and do our thing but there is barely enough truck drivers in the work force to haul all the products to keep all the shelves full at the current level of commerce.

Some larger fleets are said to have 10% or more of their trucks parked for want of drivers.

Look at what happened to fuel. Supplies were relatively tight and then Iraq decided to withhold its 3% share. Cold weather helped but the price of fuel increased far more than 3%, it been more like 30% plus.  . What would happen if 3% of the drivers sat out? Or, what happens if the national GDP increases another 3% without an increase in the driver count? (the Gross Domestic Product has been increasing at a 4%-5% rate)

Meanwhile, the government is taking steps to significantly reduce hours of service for truck drivers.  This lowers the effective utilization (efficiency) rate of existing trucks and drivers.

Population demographics suggest that the current expansion of the economy should continue through about 2010.  That year,  the last of baby boomers will pass through peak spending years.

The bottom line is that if you are a driver or a small or large fleet owner that can hire drivers, you may in a position to make income or profits unheard of 2, 3, 5 ten or twenty years ago.  

truckdoctor

learn while you drive...

Tired of the same old thoughts?  This tape may open up a whole new world 

Common sense knowledge to help you put your financial house in order.  $5.59

Short book, long on smarts!  You will wish you read it when younger.

Hebe is gone.  Freightliner has an unknown number of buybacks, repos and unsold new inventory. If the economy stays soft, in time, Daimler's world market share plan could cost the German company' a couple billion, maybe more.  

Meanwhile it is not assured that the Sweeds' are doing much better with Volvo USA.   They also have an unknown number of buyback agreements sure to cause problems simular to Freightliner's.

Hell, it could be that they  both pull out of the American market and save money.

Jan 2000

Presidential elections and fuel prices??

In the big picture, it sure looks like the oil producers would like to see a republican president in the White House. A Gore presidency would certainly have refiners getting diesel fuel, for example, much cleaner. This and other EPA initiatives are projected to be expensive, expensive enough to make alternative fuels and engines more competitive. Such a result is not viewed be in the best interests of oil producers.

Unless rate relief is available, of course, this scenario is not in the best interests of truckers either.

It is interesting that the timing of OPEC’s production cutbacks coincide with Americas presidential election season. Historically, Americans have voted their pocketbook. OPEC ‘s actions, either purposeful or coincidental can certainly trump the months of economic expansion Gore expects voters to remember in November.

note; this articles purpose was to shed some light on forces we can't control. Not, to influence your political thinking.  Even an American president is at a loss under these circumstances.

used truck crisis updatefeb 2000

earlier this month Jim Hebe, Freightliner's CEO called on his competitors to help drive up the price of used trucks.  Hebe also noted that the industry over- built new trucks by about one third in the previous years. 

He  claimed  many of America's trucking companies were functionally broke because of poor truck values. 

Interestingly enough, many believe Hebe's aggressive marketing to the nations larger fleets, armed with the tools of   aggressive pricing and guaranteed buybacks contributed to today's problems. 

Some news reports 15 years ago (about time frame when Daimler Bentz bought Freightliner) stated Daimler was after a 50% world heavy truck market share.  It was assumed their strategy needed more than half share to have  hopes of controlling the world truck  market.    

Freightliner  had (I think)about a 17% US share when taken over by Daimler. In a few years the Freightliner share grew to about 20%.

At the time, Jim Hebe was KW's sales chief and  proving to be an excellent  marketer.  The Daimler people saw this, came in and offered Hebe a deal he couldn't refuse.

Today, 11 or so years later, Freightliner share is above 30%.  It is all Hebe.  Those that know him well say he is a dynamo, going all the time and making things happen.  The Daimler goal 15 years ago was market share.  Until now is didn't look like the goal had changed, if it in fact   has. 

Street word is that Freightliner wrote off in excess of 300 million in used truck losses last year with the prospect of even greater used losses the next 2-3 years.  Sounds like a lot of money.

Yet, you've almost got to think that it is some sort of high stakes game, Daimler certainly had to know about the dangers of guaranteed buy backs.  A few years ago they(Daimler) lost something like 4 billion dollars.  A number almost unheard of at the time.  Doesn't seem to have bothered them much, ask Chrysler.

With the used truck market we live in interesting times and it looks like we will for a while longer.

truckdoctor

Thanks for visiting, I hope you find something you can use.   If not, why not take the time to tell me what you didn't find.    That way, you may find it the next time. 

If you are in the area, please stop in our store  (free coffee!) We have a few more secrets to share.  And, a win for us both to gain.

Thanks!

Lynn Doctor

TRUE or FALSE

Young people need less sleep.

Tips for tired Drivers

from the ATA

Heavy truck ownership is all about managing future risk.  The best and most accurate I have ever heard of on managing the future is Harry Dent.  His 'The Great Boom Ahead'  made those who listened and acted wealthy wealthy wealthy.  Now,  his;

"The Roaring 2000s: Building the Wealth and Life Style You Desire" offers more of the same. 

  3 hour cassette

Many of the first of these trucks sold are profitably running today, every day. 

Be aware that the individual truck owners were successful by their own initiative and actions, alone.  They taught many heavy truck ownership tricks and tips that this site will  pass along.     These truck owners are and were successful while thousands have failed by loosing their truck and even worse; their credit and many, their self confidence or family peace.

Many truck failures simply didn't need to have happened today and with planning, they don't need to happen tomorrow either! 

You would think repeated, fundamental truck mistakes  would stop, but I have been watching most of the same mistakes since 1958 and before( I was a young teen when my dad made a bunch of them, I have made a studied practice of learning of many others to avoid since).  Most of you know that truck mistakes don't come cheap.

This stuff is simple and straight forward, common sensible enough that most anyone can practice it. It does help to have plans rooted in knowledge of specific truck use market(s) and careful development of a relationship of mutual trust with the right truck salesperson(kind of like shopping for a partner).   If you shop for price and what you want to hear, eventually, you will get hung out to dry.  Really.

Truck dollars and cents fundamentals are that modern trucks typically consume plus or minus  $100,000 in yearly expenses;  Driver, fuel, maintenance, depreciation, insurance, taxes, permits and administrative overheads are the heavy truck expense areas. 

I argue a purchase price increase wont necessary drive up overall expense mid to long term.  In fact, if extra money is spent in the right places, risk can be lowered and long term profits nearly assured. 

for sale by owner buyer financing link   

Quality Focus ...truckweb  limits trucks shown  to  carefully selected Kenworth and other new and used trucks that appear to have a quality edge. 

• "All drivers have to realize that a split-second burst of aggressive driving--especially in a cramped construction zone--just isn't worth the often tragic consequences."

from; Safe Construction Zone Driving

ATA

If a trucks economic life can be increased without dramatically increasing maintenance cost or other expenses, great relative advantage is available.

I will do some shameless promoting on the site. Some of you are in range of the roads that cross my location. I have got to pay for this site and survive in rough times, too.;)  Not to mention, make the boss happy.   If a few of you don't find the right salesman elsewhere, you may give me the favor of a call.   With luck, we hit it off and strike up a business friendship that could last a lifetime. To those, thanks in advance! :) 

To all, good luck.  Great, if you find something useful on the site today.  As for tomorrow, I have more improvements and additions to add than I have years, so do stop back.  Between making a living with truck sales, I will continue to pour what dollars I can into truckweb.com.  To improve on  ways to share what we can learn,  the best of what you teach me and each other.  Thanks!  LD

*New truck Owner Operators only.  (A mid-fleet new truck buyer did go south  in '89,  less than 10 used failures since 1986).

NE Indiana

Known for 75 years as the

Heavy Truck Capital of the World...    See why...

A TRUCK RULE that seems to hold:

The longer the perceived economic life of a specific truck to the marketplace as a whole; the lower the potential operating costs and risk to its' specific users. 

(The market place assigns relative values for a reason)

Q: Your truckweb ownership method as opposed to what?

A: As compared to full service leasing(at least for most small and midsized  business), or (buying / finance lease) ill specified trucks or trucks the used truck market place does not favor.   There are a lot of trucks out there today that fit these categories.

If you full service lease,  you pay for leasing company overheads, their profits, truck maintenance costs, along with truck depreciation and interest costs bundled into a long term deal.  At the end you have no equity, meanwhile if the economy turns soft, no affordable way to get out of the lease over a 3-6year term.  Leasing companies love the 1-10 or so truck lease customer.

If you are buying or finance leasing your truck and it  is not specified "right" for your job, your driver and the secondary market your cycle of ownership for the truck is less likely to be efficient.

Q: I  plan on running my truck at least a three years. Possibly trade then,  Or sell.  I want specs' to keep maintenance costs low and reliability up even to five, even  more years. 

A:  Great!  If you buy into the right deal you should start cracking equity at 2 1/2 years or earlier with 54 month financing and 10% down.  With 60 month financing equity takes about a year longer.  With equity, you can easily keep, trade or sell. You open up your options earlier with quicker equity.

Q: How can I avoid leveraging into higher expenses?

A: The specific truck and specifics of deal you choose will impact each truck expense area.  The result will make each of these truck expense areas more or less manageable in tougher times.

The better the truck is specified to its' job yet have some flexibility to enter other markets, the trucks  care and the quality of the unit as percieved by the market place and most certainly the trucks driver.  Each of these characteristics can give daily benifits over the trucks ownership period.

Q: Why would the units percieved market place value impact daily operations.

A: Because if the marketplace places higher values on your equipment versus another similar unit you are likely to have more equity.  Next to cash and your track record, equity in valued assets is what bankers and  financial institutions look at to determine if they want to do business with you.

p.s. After looking around, if you like what you see here please pass the word, tell a friend about this site.  Thanks! :))

  You may want to check out the discussion area.  There is likely to be a topic of interest or you can join the discussion area and start one! 

Federal Excise Tax Laws need Overhaul

and you have a voice ...talk to your congressman

Ideas

• Fixed rate for all trucks … FET is based on the trucks price. Fleets pay a lower price than the O/O or small businessman. Isn’t that regressive, unfair? If truck FET is necessary then make the playing field even for the little guy, even for all.  Instead of, for example: $7,000 for one truck and $14,000 for another designed to haul the same weight, why not $8,500 for all?

• FET Tax Credit for Safety Items… Vorad collision avoidance systems, Glare free mirrors, Anti Spray mud flaps all cost extra money …PLUS 12% FET. Hmmm. Wouldn’t it be better to encourage truck owners to buy trucks that are safer to operate as opposed to discouraging the safer truck?  Why not 0 tax on safety items and a dollar in FET credits for each dollar spent on safety related items?

spruce the ol'girl up  ..? 

for comfort, safety, looks and profit

A link to the  our Fort Wayne Store ( the major sponsor of this page) is one of their 7  Kenworth branches.  

Eldon Palmer (he's the owner) has a partnership philosophy that has made wealthy people out of hundreds if not thousands.  Some say Eldon is older than dirt and richer than God.  I don't know about all of that but the turnover rate for his employees is low and that says something good.