Trucking's feast-or-famine cycles: Stock the pantry against 'panic mode' as an owner-operator

Overdrive Radio

In this special-edition Overdrive Radio short, Red Eye Radio host Eric Harley relays an anecdote from a family relation, an owner-operator who lamented the difficulty coping with the hunger-sticken parts of the feast-or-famine business cycles in trucking. That's most certainly where the business has been for at least the last year -- some would say close to two years at this point in the game -- after post-pandemic highs. "Dollars and cents matter right now," said ATBS Vice President Mike Hosted, underscoring the point. "Decisions matter." It's been a year where fixed costs are up 8%, variable costs are down 10%, and freight rates have continued their fall in the broader markets. Without clear insight to truly understand your costs, "you're running in the dark" on what you need to be profitable, Hosted said. And while a seasoned owner-operator may have a gut feeling about their business performance -- and they may be right 8 to 9 times out of 10 -- prevention practices with finances (not just mechanical prevention) will pay off when the famine is on, noted Gary Buchs, Overdrive contributor and longtime owner-operator business coach. With a good backstop of money in a reserve account, or a line of credit opened during one of the feast cycles, you can avoid falling into "panic mode" when cycles turn, Buchs said -- a recipe for "unwise decisions" you can't take back like one too many unprofitable loads. "In a time like we're dealing with now, if you run into the necessity of a large repair bill, and if you don't have the cash on hand to pay that, it can be a killer," said Overdrive Editor Todd Dills, rounding out the four-person panel discussion featured here. It's the first in a special midweek series of short excerpts from a special talk Overdrive and ATBS had with Harley at the Mid-America Trucking Show in Louisville, Kentucky. The talk was attendant to the March 22 release of the 2024-updated edition of our Partners in Business handbook for owner-operator business, start to finish, with our seminar at the big show: https://www.overdriveonline.com/partners-in-business/article/15667166/poor-ratesdemand-outweigh-lower-trucking-costs-this-cycle This year sponsored by the Rush Truck Centers national dealer network, the new PIB book is available for download via this link: https://register.overdriveonline.com/pib-manual/ This short introduces the PIB program and digs further into perspective on building your owner-operator business pantry to insure against those feast-or-famine dynamics and the whims of the business cycles. The talk is aired in full also via Red Eye Radio's Extra Mile podcast at this link: https://www.redeyeradioshow.com/the-extra-mile-podcast/ Visit Partners in Business sponsor Rush Truck Centers, the premier solutions provider to the commercial vehicle industry with 150-plus full-service dealership locations in the United States and Canada, via https://rushtrkctr.com/4bLxbR4