Mercer’s Tips to Make the Most of the Remaining Summer Months
No boom can last forever, but the current market is unlike the fluctuations we’ve seen in the past. Normally, when rates get very high, the tendency is for a bunch of new trucks (and growing fleets of company drivers) to pick up the surplus freight. With added capacity, the market balances itself out, and the pendulum swings the other way. Right now, because of the chip shortage, there aren’t enough new (or used) trucks available to flood the industry and lower rates. The way things stand, ATBS is projecting the freight surplus should continue at least into the second quarter of next year.
Don’t run yourself (or your equipment) ragged but make the most of this boom for however long it lasts.
Schedule Maintenance (and Order Parts) in Advance
With shipping bottlenecks, it’s hard to get parts, and mechanics are increasingly busy. Consider ordering replacement parts in advance. If you schedule preventative maintenance for the time you plan to spend at home, then you can reduce the risk of a breakdown on the road. To detect engine wear and help predict part failures, think about sending fluids off for analysis. Contaminants in the engine oil, hydraulic and transmission fluids can help you replace parts before they fail.
Remember That (Now More Than Ever) Time is Money
Each week at home, on vacation, or waiting for repairs is costly in terms of lost revenue. You probably deserve a break right now, but this would be a good year to spend more time on the road. Recalculate your priorities about how you usually run your business. Under the right circumstances, you can afford a little deadheading. Eventually, the rates will go back down, and that will be a better time to give yourself some extended R&R.
Build Up Emergency Funds
With mechanics getting backlogged (and more expensive), ATBS recommends setting aside 12 CPM for maintenance. With many owner operators making around 75 CPM in profit, it’s not unreasonable to save 12 or more. In case of an extended breakdown, think about the bills and other expenses you’ll need to keep paying, even when you aren’t moving freight.
Invest in Your Equipment
Noticing a theme? With the chip shortage, used trucks are selling for about twice their normal worth. Go the extra mile with preventative maintenance because it will be hard to avoid overpaying if you have to replace your tractor anytime soon. As you’re probably aware, at least financially, there has never been a better time to be an owner operator. As part of a broader trend in the industry, truck drivers aren’t covering as many miles as they did twenty years ago, but they’re earning more, even when you adjust for inflation. As always, if you want to further maximize your profit, look for ways to improve your fuel mileage. Keep driving safely and thank you for all your hard work.