I've got a 2007 Century and a 2004 Great Dane 53' box with Carrier Ultima Reefer. In 2013, I spent $27,000 on maintenance combined. A set of drives, a pair of steers and a power divider, 4- air bags, CAC, ECM to Firewall wiring harness and pair of windshields were included in all of that. Some work I did myself, other stuff I had someone else do.

Ever priced out what it costs for a shop space? about $19.50 / SF. That comes to a nice little $43,000 for a 25'X85' shop. About as small as you want to consider for a single truck. Makes one wonder what's worth it...

Recently, I sat down and did a cost analysis to see if it would be worth it to trade in that old iron with 840,000 miles on it and buy something with less than 300,000 miles.

It's a wash. Even taking into account the extra maintenance I have on my truck and paying for a new engine. Where I suddenly get a better payback is the fact in Jan 2015, I can have my equipment paid for and in the next 36 months, put into savings $48,000.

New iron isn't always better.

 

One thing that I've always noticed that gets lost in the debate of new vs old etc is down time. There is a cost to down time. Really new ones break down too, with all this new technology. It seems to be getting better but nonetheless... Actually, they gave us a Cascadia Evolution as I mentioned to run for now and it broke down on it's first trip. However, here's the thing with leasing, they give you another truck and you keep going.

Now I know your truck is like your house, it's no picnic moving stuff. But it's no picnic sitting in hotels either. Also when you are on a time sensitive load like produce or other perishables, you can't be sitting around waiting for the truck to get fixed. You could lose a load like that.

And down time is not something that I believe can be quantified, by me anyway.

 

now you are getting into business models and organizational methodology.

As drivers, we don't care. You look at the boss and he tells you what to do. As motor carrier business owner, it's a whole new ball game.

This was probably one of THE biggest hurdles I had to jump to make that move from leased operator to having my own authority. I have no support anymore. No second fleet truck or anything to back me up, repower a load or anything. Just what I can swing.

A fleet has an option to put the driver up in a motel and then repower the load as well. Or you can rent a truck or if leased, swap power units and re-power that way.

As NEW operator, you have to wait 2-3 years before some companies (Ryder or penske) will lease you a truck even short term to cover you on a situation of a major break down. If you've been in business long enough, this becomes a more likely and possible option.

Down time becomes then, how well and how fast you can respond and react to that mechanical failure. New iron or old can and will leave you stranded.

What I HAVE noticed. The trucks that seem to be having the BIGGEST issues with emissions which is what's shutting this stuff down is the ones that idle their trucks all the time. The guys with the APU's, don't have near the issues.

As to doing your own work vs a shop. It really comes to the level of difficulty. I just had an idler pulley seize on my Series 60. It's $120 for the part. I needed two. The fan hub idler is the one that seized and I figured I would replace both while I had it down. Since the belt was destroyed, figured I'd replace that at the same time. So I got both of them. Parts alone were like $275. Likely it would have been another $125-150 in labor had I taken it to a shop. It took me all of about 25 minutes to replace both idlers and belts in my backyard. Even in sub-zero temps.

When that Idler failed, I had one of two options. A service call or cut the belt and drive home. WHAT? drive home with no fan belt? Yeah, It's 60 miles, -10*F and an empty trailer on flat ground. What's the issue?

This is where I have issues with companies and company drivers. Some would flip if a driver just DID that. Others would just call the company and send a service truck out costing $750+ to replace that idler which took nothing but a breaker bar and a 3/4" wrench. Which way is right? Both of them are. At least in my view. What's the caliber of driver that you hired?

I have added one thing when I went looking at a 2012 T660 just this month.....

I pay my equipment off in Jan 2015. That means I can now start putting that payment I would have made, about $2000 into a savings account. In Merricks case, that's $2419 per month.

Just using $2000 monthly put into a savings account that grows with 1.5% interest APR and 36 months, that's a touch over $73,000. Take $20,000 off that to pay for an engine/trans/clutch on an 840K mile truck, it still leaves me with $53,000 in a savings account. Do that with his 35ish trucks, that's $1,855,000. (35 X $53,000). With Merricks payments that $89,000 or $2,415,000 (35 X $69,000, take off $20,000 for an in-frame). Not exactly chump change now is it...
Simple savings calculator -- Bankrate.com


My ECM DDEC print out showed 5.83 mpg when I bought the truck. My IFTA history is 6.2 MPG. A 2012 T660 shows a history of 7.2 MPG (Range of 7.0 to 7.4) in the ECM's for the Kiem T660 studio's that are currently showing up on used truck lots. With the reliability issues that the EPA10 engines are showing, I don't know if it will be any more reliable than my truck.

Even if I continue to plan for $19,000 annual maintenance on an '07 Century vs $15,000 for a '12 T660. It's within $1500-2000 annually for the newer truck in savings. That's taking into account reduced cost for fuel for better economy and increased fixed expense for lease/loan payment. Basically breaking even.

 

I'll add this in a new post....

I went back and looked at my "maint" escrow". I budget for $0.138 per mile. When I take out for EGR, Major, Trans and 2 rear ends, I can drop that down to $0.066 per mile just for tires, brakes and oil changes.

Pretty much what Merrick is paying for his lease equipment.

Last year, my total maint was about $26,000. Including about $3000 for reefer/trailer stuff.

Tires were like $6000 last year for steers (goodyear 399LHS), drives (Firestone FD695+) and a set of decent used tires (virgin Bridgestone 720's with 12/32) now on the trailer.

Power divider was $3,000 just for that and I had another $1000 of needed maint done at the some time. Including an LOF, DOT Annual truck & trailer etc

CAC was $850

ECM harness was $700.

Air bags were $800.

Espar Bunk heater, $800

You can see it chews up that 13.8 CPM really quick and I only drove 74,000 miles last year. So that should have only put about $10,500 into my maint account.


Having said all that....

I don't see spending NEAR that amount this year so the Maint account should be able to recover a bit. The joys of buying someones old iron. Especially fleet equipment.


As a Comparison, my fuel account last year showed I spent ~$53,000 on fuel for both the reefer and the truck.

 

Big difference between an O/O and a fleet. Drivers, in general, don't take care of company equipment. They don't maintain the little things and they don't know anything is wrong until it breaks. Maintenance costs and downtime for an O/O should be significantly lower than for a fleet on an adjusted basis. For a fleet, the downtime and service failures associated with breakdowns cost far more than the actual repair/maintenance costs. So, they often don't mind paying a little more upfront in order to control the uncertainties down the road. That model would never pencil out for an O/O because his repair/maintenance costs are the bigger concern AND much easier to control than they are for fleets. Not that it matters much because, as mentioned earlier, most O/O's couldn't qualify for a full-service lease anyway.

 

From what I see, it is very hard to get in with Penske/Ryder now. I was talking to my rep the other day, I got in when people where going out of business left and right. They had so many trucks parked against the fence it wasn't funny. As I mentioned, I just opened up another company and they at first denied me a rental. We had to take it to the head of credit and they approved me but on the condition that my existing company guarantee payment.

I'm impressed mndriver with your breakdown of costs. I never do stuff like that. My mind just doesn't operate that way. I have never balanced a checkbook or set myself up a budget. I have an overall feel of things and go from there. A few years ago, my books were a complete mess. I knew I wasn't losing money (of that I keep track of) and thankfully my wife and her sister put the books back together. I do the major cost cutting things for example I have fuel discounts, I save thousands on sales tax, I get tires at steep discounts. I worry about the big stuff. I have people that worry about the small stuff and besides I just keep going that things are always changing. I can say besides the trailers, I have no loans, don't factor, and have no credit card debt. I am now going to add a couple of more trucks and might order another 5 trailers.

I am hiring more people and now will be pushing the intermodal. We, today, are getting signed up with the UIIA. Then this week we have a meeting with FEC (Florida East Coast Rail) so I'm excited about that.

 

Here's the quote I just got for two more trucks. They are automatic. From the feedback I got from the driver in one now, it anticipates if the road is going to elevate and adjusts the speed accordingly. You can leave it on cruise control on hills etc, it just automatically adjusts. Anyway here is the quote: (I copied this from the email from my rep)

Here is your quote for the Freightliner Cascadia Evolution:

1) Your most recent tractors priced out at: $2,928.18 per month (includes insurance)

2) The New Cascadia Evolution with Direct Drive Automated transmission prices out at: $3,122.47 per month

3) Difference of $194.29 per month.



Now if we use 6.5 mpg as a baseline and use the 5% fuel savings (Freightliner is saying 5%-7%) on a fleet that is averaging roughly 130,000 miles it would look something like this......



130,000 miles per year / 6.5 mpg = 20,000 gallons x $3.80 per gallon = $76,000 in fuel per year

130,000 miles per year / 6.825 mph = 19,048 gallons x $3.80 per gallon = $72,382 in fuel per year

Difference is $3,618 per year / 12 months = $301 savings per month



This would mean that you would spend $106.71 less per month with these Cascadia Evolutions. If the price of fuel goes up or you do more miles than the savings would be even greater.

 

What is the difference in tags for irp and insurance?

 

the insurance was included, also the IRP. Sometimes if the tags come out a little bit more I have to pay the difference but it's not much.

 

I am seeing that difference between my century and a new '12 T660. The numbers are basically break even so now it's almost an emotional decision.

Century with a series 60 or 660 studio with paccar MX engine.