Reward of Stability
Stability in trucking does not mean regularity, it means consistency. Transportation is tied to market forces which tend to run in cycles, like everything else. Consistency in trucking is recognizing cycles and planning for them. When you choose your loads at random and don’t know your numbers for Cost Per Mile (CPM) or your daily rate needed to be profitable, planning for down markets is nearly impossible. Making smart decisions for load choices, based on the real-world numbers you are tracking, ensures that you know how much you need for a particular load and have the ability to not just cover costs, but profit and plan for the future. Do that long enough and consistently, your net worth will grow and give you more flexibility to reach and exceed your goals. After all, that is why we set goals, to have a target to aim at while knowing that when we reach that goal, we can make a higher goal.
Trucking as an O/O is not a “get rich quick” or “six figure guaranteed income,” but it can be a rewarding and lucrative career when treated as a business and goals are set. Make a plan and work the plan until it is time to adjust the plan. Stability in trucking for O/Os is not expecting the same revenue each week, it is increasing your skill set. It is providing your customers with the absolute best service. It is constant monitoring of your revenue and expenditures, analyzing your profit margins, and making the necessary adjustments before they become catastrophic to your business.
When you track your business long enough, you can see the cycles repeating and easily prepare for them. If you have already been planning and funding your reserve accounts, it is easy to take time off, have repairs done, or even just sit out a down market instead of chasing freight to pay the bills. Not all cycles are the same either. Some customers ramp up in the summer, while others may have a winter uptick. The cycles you encounter will depend on the customers you choose to serve.
Live below your means. Always have funds available in reserve for expected and unexpected expenses. It is amazing that when you have an emergency fund, and reserve it only for emergencies, how many times you don’t have an actual emergency to need the funds. If you can plan and fund an emergency fund, chances are that you also have other funds for maintenance (routine and unexpected), equipment replacement, tax account, etc. And when you have these accounts funded, emergencies rarely happen, because you have already accounted for the expenditures. Having these accounts in place gives you the freedom to make better choices rather than chase freight to cover costs, and your stress level will likely decrease as well.
Finding your level of stability decreases the emotional volatility behind many business decisions. When you are no longer choosing loads based on emotion, your decisions are clearer, grounded in reality, and more consistent. A level of stability can be achieved for O/Os if they are diligent and disciplined about preparing for their future.
True stability results when presumed order and presumed disorder are balanced. A truly stable system expects the unexpected, is prepared to be disrupted, waits to be transformed.
- Tom Robbins
See you down the road,
Greg