MAKING YOUR MILES COUNT Robert D. Scheper
Five Things Operators Do Wrong Having watched, for 25 plus years, how some independent operators come into the industry, and then watch how others leave, I thought I might share a five-point observation on how many of these entrepreneurs do it wrong (rather than how to do it right). I thought I’d invert success to expose how NOT to do it rather than how TO do it. These are the five major things operators do WRONG when they start. Nearly every operator begins undercapitalized. They have no cash reserves for maintenance, downtime, or unforeseen twists in operation. I used to say operators should always have $10,000 cash in reserves, and when it gets below that… PANIC. In today’s environment, I now recommend at least $15,000 and only say ‘enough’ at $25,000. Trucks are too complex, and the industry is too vulnerable and diverse to run reserves smaller than $15,000.
brands, models, engines etc. each have their own peculiar issues. It is your responsibility to know them and know where your truck is on the journey from new/excellent to falling apart. If you plan on owning a truck longer than a year you must become the expert on your own truck. For the issues that are beyond your abilities, you MUST embrace a trusted mechanic. The mechanic must intimately KNOW your truck and work on it multiple times as well as prove themselves to be trustworthy. Only telling you what needs to be fixed does not constitute trustworthiness… he must show himself concerned for your bottom line (not just his). He should show you what does NOT need fixing too. Finding a trusted mechanic saves money long-term, always. Even if you find one, it doesn’t give you the freedom to stop looking and thinking for yourself. Too much delegation is just as costly as not enough.
2. Reactive Maintenance Rather than Proactive
3. Focusing Too Much on Revenue Rather than on Cost Reduction
Every great business person has their trusted advisors and mentors (or should). Having a trusted mechanic advise practical life expectancy of systems and parts is critical to long-term success. Of course, the most trusted advisor you will ever have is usually yourself. You must learn the basics of life expectancy and maintenance issues. Fixing things at the end of their life but before they break is usually the cheapest thing to do. For example, if an alternator’s life is three years… then replace it at three years… waiting for it to fry on the road in the middle of nowhere can lead to downtime and excessive costs. Different truck
Being an independent operator means you have limited revenue potential. There will always be only 24 hours in a day. You can only move a limited amount of freight. Where most operators become successful is through cost reduction. It’s more important to conserve fuel consumption than virtually anything else, consumption first, fuel cost second. This means the operators who race across the country against the wind will have a disproportionately high fuel cost (and maintenance bill) with a corresponding lower bottom-line profit than those who operate carefully and consistently.
1.
Not Enough Cash Reserves
10 • OVER THE ROAD
NOVEMBER 2021
