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Economies have a natural flow. We have a rising tide right now. The economy is good. That leads to an increased demand. The ELD mandate limited the supply. That has led to higher rates. In my years in the industry this may be the best time to be an owner operator. Make hay. Put some money in the bank Don’t over extend in the good times. Spend wisely and think long term.
Every 8-12 years historically our economy will have a dip, or an ebb tide. We had a serious downturn in 2008. This is not a political thing. It is an economic thing. Don’t get me wrong. I am not telling you to not stay aggressive or to invest in your business. Just don’t zero yourself out in the expectation that tides rise forever. Be smart.
Don’t put the screws to your customers, just because you can. I am not a spot market kind of guy. Yes, right now drivers and trucking companies are making a killing on the spot market. They may look at my rates and snicker a bit. At least if I am to believe Facebook. I am a slow and steady type of business person. It has served me well over the years.
Shippers are trying to insure capacity with more long term contracts and less spot market. Take a serious look at the long term offers. They may look a lot better a year from now than they do at the moment. In this industry, dependability matters. Shippers like trucking companies that are there for them in good times and bad.
Don’t leave a long term customer for a few more dollars down the road. I have been with basically the same group of shippers for the last 30 years. It is amazing to watch other companies try to invade my boring little turf when times get rough. The same carriers who may have snickered at my boring “low” paying gig in high times scramble to be me at ebb tide.
As much as anyone tells you that this business is all about price, it isn’t. It is for some people and shippers, but I prefer steady. How would you expect a customer to react if you left them over a few dollars in good times, then went back to them in the slow time. If I were them, I wouldn’t be too receptive.
This is a good time to build up some cash reserves and reduce some debt. Build a cushion. Establish a good relationship with your lender. You don’t need to be overly cautious, but you should not be on the edge in good times, or you will be over the edge in bad times.