The Progressive Path To Success As A First Time Owner Operator

My name is Doug Shields. I have been committed to the transportation industry for over two decades.  I have sold for Volvo, Mack, International, and most recently Peterbilt. During that time I have noticed that the one thing sorely lacking in our industry is a comprehensive guide to buying that first truck. I’m not just talking about the truck itself or even a mechanical inspection. I’m talking about the entire process, the mindset required, the questions that need to be answered and a host of other topics regarding insurance, finance and other things that are too numerous to list here.  I’m sure all owner operators would agree that the learning curve is quite steep and there are many things they would have done differently had they possessed the knowledge then that they have now. What I decided to do is to produce a progressive audio course designed to help those who wish to own their first rig (as well as repeat buyers who want to brush up on the process) to do so with both eyes open and with the best and most recent information available on the subject. With the advent of I-Pods and I-Phones and other media players including laptop computers it has become much more plausible to produce this type of program and to provide it to a wide trucking audience without cost to the listener. I am producing a series of podcasts designed to educate you in such a way as to demystify the process from start to finish and to provide you with a roadmap to success. My hope is that you find this information to be helpful that you remember where you got it. I sell class six, seven and eight used and new trucks in Phoenix Arizona and I ship to the 48 contiguous states. I carry sleeper trucks, daycabs, flatbeds, dumptrucks, water trucks, and box vans in all shapes, brands, models, and sizes. My website where my selection of trucks is posted (complete with multiple photos, full specifications and pricing) :
 
Arizona Trucks
 
You can subscribe to my free Successful Trucking podcasts and not miss a single episode by going to my podcast page at:

http://dougshields.podomatic.com/
 
If you use I-Tunes you can subscribe automatically by clicking on the “Subscribe With I-Tunes” icon on the right hand side of the page about halfway down. You can also listen to the podcasts directly on any computer by clicking on the “Play” button for each podcast.
 
Since this is a PROGRESSIVE audio program I suggest that you start at the first episode and work through the successive episodes at your own pace.
 
I welcome your comments, suggestions for future topics, and your business. I thank you very much for your time and I look forward to being of further service.

See my Truck Buying Guide.
 
Respectfully,
 
Doug Shields
Phoenix, AZ
480-238-3873 or 800-273-8309

When you’re a trucker, computing taxes isn’t quite as easy as it would be if you were an employee at a factory. Instead, you own your own business, so your filing becomes more complex, even though it might end up saving you money in the long run. Even if you’re not an owner/operator, you’re most likely viewed as an independent contractor, so filing is still tricky. If you have a good accountant who knows the ins and outs of deductions, you can often end up keeping more of your hard earned cash than many.

While deductions for tools and maintenance on your truck are easy to remember, you can actually claim deductions for almost anything that’s involved with running your business. These include everything from the money it costs you to access the Internet on the road to using your cell phone for business to ATM fees and physicals that your employer requires. These and a longer list of deductions is available at The Truckers Report, where truckers can view a whole host of deductions that might end up saving them more of their money in the long run.

Although a good accountant can find these deductions and more, it is important to make sure that you don’t claim bogus deductions. This can quickly lead to an audit, a fine, and even jail time, if you did so willingly. Of course, most truckers don’t mean to make phony deductions, but when truckers and their accountants make these kind of mistakes, it can end up costing time and money, as well as creating a toll on you mentally, emotionally, and physically. To avoid these problems, make sure you don’t claim deductions for expenses that were already reimbursed or items and services that you may have used while on the road, but could easily be adapted for personal use, such as clothing and home phone lines. The Truckers Report contains a longer list of deduction faux pas for drivers.

Because you’re a trucker, you have an advantage over many, since quite a few of your everyday expenses can be deducted from your taxes. If you’re applying for a home mortgage or some other line of credit that requires you to prove income, however, you should be aware that these deductions change the amount of your income, sometimes lowering it to a standard that your financial needs provider finds unacceptable.

Once you've decided to upgrade your business or start a new trucking business, truck financing can be easy to find. Whether you've decided to loan or lease your truck, however, you soon realize you have large monthly payments to face. For truckers who operate seasonally or have predictable periods of slow businesses, these payments may seem daunting. Because the cost of defaulting on a loan or lease can often mean skyrocketing payments or even your business itself, most truckers worry about having the cash to pay and pay on time.

Freight Broker Factoring is one service provided by some financial companies that can help you avoid this fear. Similar to a payday advance, factoring puts cash in the hands of the trucker before his or her clients have had a chance to pay. We all know that actually getting the money from business transactions can be difficult, especially in this economic climate. Whether you're selling electronics on Ebay or dealing with a client of your commercial trucking business, it may take time to get the money that you need now.

Factoring provides you with that cash just a few days after you've completed the business transaction. According to one recommended factoring agent, cash can be received just two to three days after you've provided your service. The freight broker factoring agent can provide you with up to 90 percent of your bill, while providing the rest after you and the client settle. Of course, the agent will charge a fee for this procedure.

Although freight broker factoring is another expense for the trucker, it can be the perfect way to make sure you stay on top of your lease or loan payments. Truckers should carefully consider the option before making a decision, making sure that their business can afford it in the long run.

These days, people shop for everything from underwear to groceries online. Amazon.com and other similar companies ship almost everything but fresh fruit and vegetables. EBay is the perfect place to find discounted and rare items. And many people even buy their service products, such as warranties and insurance packages online.

For truckers, shopping online for truck insurance coverage can be convenient, easy, and relaxed. While talking in person or on the phone to insurance brokers may be a less than pleasant experience, especially if you are not sure what kind of insurance you need, shopping online allows you to power down your computer whenever you wish.

Because insurance is a bit like the lottery, as providers only have to pay out if an accident occurs, insurance providers are almost always trying to get customers to buy more than they really need. Instead of being pressured by these pushy salespeople, you can easily compare quotes yourself online.

When you type the words, “commercial truck insurance” into Google, thousands of results appear. Ranging from nationwide, big name providers to small, family owned businesses, these sites offer truckers fee quotes. While one method of shopping for truck insurance coverage online would suggest that you get quotes from each of them, this can be time consuming.

Instead, check web sites that give you recommendations for different insurance companies. For instance, the A.M. Best Company gives ratings to insurance companies based on their performance. By choosing to get quotes only from those insurance providers with high ratings, you’ll be cutting down the amount of time you spend shopping for truck insurance coverage online. Duff and Phelps, Weiss Research, and other groups offer similar ratings, so truckers can compare ratings across agencies. In addition, trucking message boards often contain rants and raves about different trucking insurance companies. By viewing the companies that your peers have chosen, you can also get an insight into how these companies actually deal with customers.

Instead of spending time on the phone or in person with an insurance agent who is trying to sell you what you don’t need, shopping for truck insurance coverage online can be easy, in addition to saving you time. If you check out just those companies that third party observers or your peers have singled out as the best, you’ll be saving yourself even more time and frustration.

More truck insurance options here...

To Our Customers and Friends,
 
We have big news to report! The Economic Stimulus Act of 2008 can save you THOUSANDS of dollars.  This new law allows you to depreciate a larger percentage of trucks you acquire and place in service during the 2008 tax year. 
 
Don't miss out on the opportunity for HUGE tax savings!
Click on this link to learn more:
http://www.us-trucksource.com/2008_bignews.pdf008
 
You can contact any of our friendly, qualified sales staff to help you "crunch the numbers".  Remember, this ONLY applies to equipment purchased and put into service during 2008!

We want to help you meet your medium and heavy duty truck needs. Let us know what we can do. 
 
Courtesy of Marc Hess and
The MHC Truck Source Team
Best Truck KC

To Our Customers and Friends,
 
For most of us, change is as scary as the zombie in a Halloween movie.  But come 2010, most of us will have to make changes to our engines to comply with the new standards set forth by the Environmental Protection Agency (EPA).  What will you do?  Which engine will you choose?  The following article is a comparison of 2 types of available engines that comply with the EPA emissions standards.  

EGR vs SCR? 
Making sense of it all
Heavy-duty trucks comprise about 10 percent of nitrogen oxide emissions in the United States

In 2010, the U.S. Environmental Protection Agency will be changing its emissions standard to two-tenths of a gram of nitrogen oxides(NOx) per horsepower hour. 
This significant reduction will force the diesel engine industry to react strongly to meet the requirements. 
It's not too soon to start thinking about which EPA-compliant engine you'll be buying: a smaller, lighter one that requires urea as an additive, or a larger, heavier one that doesn't. 
So -- let's start with the basics:
 
What is SCR? Selective Catalytic Reduction (SCR) - a form of after treatment to reduce NOx outside the engine.  SCR feeds a small amount of ammonia-containing urea solution into the  exhaust stream of a diesel engine.  The ammonia combines with NOx to form harmless byproducts that are then discharged through the tailpipe.  This reaction will reduce NOx emissions up to 90%. Urea (also called Ad-Blue) is a liquid reductant produced from synthetic ammonia and carbon dioxide.  Currently, 90% of the urea produced worldwide is used as a fertilizer.  In order to utilize the SCR system, trucks would need to have an onboard tank.
 
What is Cooled EGR?  Exhaust Gas Recirculation (EGR)- is a NOx emissions reduction technique that re-circulates a portion of an engine's exhaust gas back to the engine cylinders. Engines employing EGR recycle part of the engine exhaust back to the engine air intake.   The oxygen depleted exhaust gas blends into the fresh air entering the combustion chamber.  Reducing the oxygen produces a lower temperature burn, reducing NOx emissions by as much as 50%.  The recycled exhaust gas can then be cooled. This "cooled EGR", can create an even greater reduction in emissions by further lowering the combustion temperatures.  When used with a DPF (diesel particle filter), emissions can be reduced up to 90%.
 
Now that you understand the basics of the two systems, let's see what happens when we compare them side by side, weighing the pros and cons:
 
Selective Catalytic Reduction (SCR)
 
Enhances thermal efficiency & fuel economy
It reduces heat rejection and cooling system stresses, allowing for a smaller radiator and cooling fan and extending oil-drain intervals
The smaller, lighter engine may equate to increased payload and less expensive injection system
Can reduce emissions up to 90%
Ideal where fuel economy and weight are primary considerations and trucks operate on main travel lanes
Availability of urea - searching for suppliers may add out-of-route miles
Consumption of urea is unpredictable, since its mixing ratio varies with driving conditions
Vehicles will be fitted with an NOx sensor to ensure the urea level is not neglected.  Failure to maintain the urea tank will result in a minimum 40% reduction in torque output if the additive runs out
The urea system cost doesn't really scale with engine size. It's a fixed cost and as you move down in engine size, it starts to account for a larger percentage of the engine cost
Least effective in stop start situations such as city operations where the constant acceleration creates the most NOx
Unknown price stability of urea
Exhaust Gas Recirculation (EGR) 
Ideal for users running less traveled routes and those eager to avoid replenishing urea
No additive, no extra tanks, and the loss of payload and fuel capacity associated with SCR
 
No risk of experiencing a power down event due to NOx monitoring the addition of EGR coolers increases overall engine size and the additional heat loads could mean an increase of 10 to 30% cooling capacity might be required
 
Technical risk related to the SCR catalyst and doser is eliminated
 
The simpler fueling requirements are easier for hired drivers, thus good for small-fleet driver retention
 
When combined with a DPF can reduce emissions up to 90%Engines are larger and possibly heavier, depending on power rating
 
Larger radiator and fan are needed to handle small increase in heat rejection
 
The fuel cost is higher than the cost of fuel plus urea in an SCR system
2010 PLANS (announced to date):
Caterpillar - out of heavy-duty truck engine market
Cummins - EGR
Detroit Diesel -  SCR using urea solution & catalyst
International - EGR
Mack - SCR using urea solution & catalyst
Paccar - Unannounced
Volvo - SCR using urea solution & catalyst
 
There are notable advantages & disadvantages to both systems. It seems to come down to dollars and cents.  For operators, the major considerations are around the price stability over the operating life of the vehicle and the hassle factor associated with the purchase, storage and filling of the urea tank, along with your own belief on the future cost of Urea.

Whatever you decide, we are here.  We want to help you make the best decision and find the best solution.  So give us a call or stop by today!

Marc Hess
Best Trucks KC

reprint courtesy of MHC

With the rising cost of living and the increased number of occupational options, workers in a number of professions and occupations are beginning to consider becoming small business owners, going back to school, or applying for new an different jobs. For many truckers who work as employees for trucking companies, the thought of becoming an owner-operator has most likely crossed their minds more than once. While doing something new and exciting is usually the first choice for many truckers, cost is always a consideration. For this reason, libraries and bookstores are stocked with self-help books that aim to show working people how they can become free on a certain budget.

For truckers that book is Cost Per Mile, Scott Elgin’s financial guidebook for truckers. Unlike other business owners, owner-operators might not know every detail of their own business—every cent that comes in and every sent that comes out. Part of this may be due to the nature of the work, since expenses on the road are difficult to keep track of. Other owner-operators might find the task of keeping good business records difficult because they used to work for a trucking company that audited all of their expenses for them. Whatever the reason, owner operators aren’t always keeping good business records, and it could very well be this fact, not the cost of fuel, that is causing so many to go out of business.

Elgin attempts to change this phenomenon with his book, which is geared toward explaining the cost for every mile of operating a big rig. In fact, Elgin never meant to publish the book. Instead, he gave it to the owner-operators in his fleet, hoping that some could use it to work more efficiently. It was only because of the truckers’ favorable response to the material, however, that he put the book into print. Now, it is one of the most widely read books in the trucking industry.

Recommended as a way for owner-operators to keep track of their expenses on the road, the book contains chapters on tire cost, fuel cost, maintenance cost, and insurance cost, just to name a few. While the book is chalk full of formulas and worksheets to help each trucker determine his or her cost of operation per mile, the book is written in a way that any trucker can understand—even if he or she does not have a degree in math.

Although the book is a useful resource for owner-operators, those who are considering buying a truck and trying out the life of the owner-operator should also give it a glance. Knowing the information in the book will allow truckers to decide if they can really afford owning their own truck. Even if reading the book convinces some that they can become owner-operators right away, by having knowledge of their cost per mile right away, truckers can have an advantage over other owner-operators that went into the endeavor blind.

Although no manual has been written to tell truckers how to make it rich in these costly times, Cost Per Mile is a great resource for truckers who want to know what they’re really making and operate a more organized business.