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Buying New vs Used Vehicles for FedEx Ground Linehaul with Special Guest, Trucks Tom — Transcript

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3:44all right everyone welcome to the route
3:46consultant weekly webinar for those of
3:48you who are here for the first time my
3:50name is Josh Gregory I am the Vice
3:52President of Operations here at Route
3:53consultant and if you're not familiar
3:55with us our team ran hundreds of routes
3:57across the country in both p& and line
4:00hall and today really we're here for a
4:03couple of reasons uh one we want this to
4:05be a place for current contractors to
4:07always be able to come together learn
4:08about what's going on in the space ask
4:10questions and really find ways for us to
4:12be successful together to find ways to
4:14thrive in whatever sandbox whatever
4:16environment that FedEx provides for us
4:19uh and also if you're new to the space
4:21if you're trying to get in for the first
4:22time or if you're early in your
4:23Contracting life we want to be here to
4:25answer questions and be a place that you
4:27can learn and really help make the
4:29decision of this is the right uh space
4:31for you now for all of our regular
4:34attendees welcome back again whether
4:36this is your first time on here or
4:38you've been watching us for months
4:39you've been a contractor for years we
4:42always want these uh webinars to be a
4:44place where we can come together learn
4:46and and ask questions uh and I'll go a
4:49little bit into the format of today if
4:50you haven't been here but first I have a
4:52quick disclaimer to read as I do every
4:54week so route consultant is not endorsed
4:57by and is not recommended by federal
4:59Express Corporation FedEx ground or
5:02Amazon rout consultant is not sponsored
5:04by is not approved by is not associated
5:07with and has no connection whatsoever
5:08with Federal Express Corporation FedEx
5:10ground or Amazon now uh for today if
5:14you've never been here we will go over
5:17some content some things that we want to
5:18talk about that are happening today to
5:20to help you think about the space a
5:21little differently uh but after that
5:23we're going to go over a couple of uh
5:25upcoming events and new listings that
5:27have come out this week and then it's
5:29going to be Q&A so it can be questions
5:31about anything that we talk about today
5:33or anything else that you have questions
5:35about in the lime Hall space we'll be
5:36here to answer uh my ask is there's a
5:39Q&A button at the bottom of the window
5:41uh if you do have those questions type
5:43them in there we'll make sure to answer
5:45them at the end and go through them all
5:47in as much time as we have so um for
5:51today uh we wanted to spend uh some time
5:55today talking on the fleet uh when it
5:57comes to Lion Hall and in particular
5:59some of the strategies around acquiring
6:01used or new vehicles and how to find
6:03Success With both uh or either there's
6:06lots of reasons to do different types of
6:08vehicle Acquisitions in this space and
6:10we want to talk through some scenarios
6:11for you uh and we've actually got two
6:13guests on this week so first we have uh
6:15Alex FR uh contractor and expert in the
6:18Lin Hall space so Alex if you want to
6:20say hi really quickly hello and I have a
6:23question to start off Josh okay okay
6:27what oh what's on my uh various Marvel
6:31characters ah I like it I like it yeah
6:35yeah so I I figure out is that an angel
6:38then so that's angel from X-Men let me
6:41see where I don't know I think I've got
6:45Old Iron Man uhuh Ant-Man Captain
6:48America I think this is wasp oh it's
6:50wasp okay yeah yeah the the old
6:54yeah I'm I'm glad you called that Al out
6:57Alex it's really important that
6:58everybody gets to see my cool shirts and
7:00we don't just gloss over no I I think
7:02everybody we should let everybody know
7:03that you can ask us anything you can go
7:05exactly and FedEx specific you know we
7:09can talk about the Chicago Blackhawks we
7:11can talk about the the Kansas City
7:13Chiefs and the Philadelphia Eagles I
7:16really hope the Eagles beat the Chiefs
7:17because I cannot stand the uh the Chiefs
7:21um I I couldn't care less about who wins
7:24at this point there there's no one I
7:26care about anymore so I'm watching for
7:27the commercials and the love the game
7:30yeah Love of the
7:33Game perfect uh so we also have another
7:36guest so uh Tom Tom W here let me make
7:40sure that uh Tom or is your did I get
7:46let me see if you can get your camera
7:47working there should be the button in
7:48the bottom there to unmute and turn on
7:50your video uh but Tom is actually he's
7:53worked in this space helping contractors
7:55across the country find Vehicles so we
7:57brought Tom on as we kind of uh go
7:59through this discussion today about the
8:01different types of vehicles that you
8:03want and the different uh lifespan of
8:06those vehicles to bring them in there
8:07there you are Tom why don't you say hi
8:10hello hey Tom what's the Hat up today uh
8:13this would be lacrosse Logan High School
8:17uh my I have a 15-year-old son that
8:20plays
8:21baseball got and we had six a.m.
8:24practice this morning so so that was
8:27nice got to throw some fast balls
8:30um I hope they're doing it indoors I
8:32mean I know that you guys still have
8:33some snow on the ground up there yeah it
8:35was it was indoors yeah yeah just once a
8:39week right now just kind of for fun to
8:42get everyone going in the winter you
8:43know
8:45nice College where they would make you
8:48go outside as part of your mental
8:50toughness training right well right yeah
8:54that sounds like some Marine cor stuff
8:56there yeah perfect so Tom I know we're
8:59going to go a bunch into to kind of the
9:02different strategies just quickly before
9:04we before we get to the content a little
9:06bit later can you just give a quick
9:07overview uh of trucks Tom and and what
9:10your company does sure um what we do is
9:13we specialize in Fleet Acquisitions so
9:16uh we work with large
9:18fleets uh as they get new product um you
9:23know generally they're going to cycle
9:24out the used equipment um so we uh we
9:29kind of specialize in working with the
9:30companies that are going to have have a
9:32tendency to take care of their equipment
9:34because they don't all do that um so
9:38once we do that and uh we can go in and
9:41we can find the product and normally
9:44what we've done is um you know we'll
9:48we'll be selling trucks to large dealers
9:50around the country um and then how we
9:54got into this space was kind of it was
9:56organic because
9:59I started having end users that were
10:01reaching out buying and then they were
10:03telling people and they were telling
10:05people and um well here we
10:09are now we're on a webinar talking about
10:12it so yeah it's all good I appreciate
10:14you having me think a lot of us end have
10:17weird stories of how we ended up in the
10:19FedEx space of I knew a guy who knew a
10:21guy and now suddenly we're on a webinar
10:23together exactly
10:25right so um before we get into the
10:28vehicle conversation I know Alex you
10:30said there are a couple of quick things
10:31that are happening in
10:34space yeah there are two big
10:35announcements I wanted to make so if you
10:37haven't had a chance to go on to myig
10:38ground Biz uh definitely take a look uh
10:41one is the peak points announcement so
10:44if you are new to this space during Peak
10:47which runs from uh late November through
10:50January 10th um if you exceed a certain
10:53mileage threshold you get a point um you
10:55get uh excess points and those are Peak
10:57points they're called uh so if you go
11:00over roughly 10% over your mileage
11:02threshold you get 10 points if you go
11:04over 15% you get 15 points and so on per
11:07truck on your A1 so um those points will
11:11be that you earn during Peak will be um
11:14um released for your review on February
11:1816th and then you can begin allocating
11:20them on February 17th so in an upcoming
11:23res um webinar we're going to talk about
11:26Peak points how you find them where you
11:28find them on uh my on your mybiz account
11:31um and then what you what you want to do
11:33with them some strategies behind how you
11:35allocate them um and you know what what
11:38could we see coming up in the future uh
11:40the other announcement is even more
11:42exciting is that we're getting new fuel
11:43cards from FedEx uh from FedEx um so
11:46we're uh FedEx is moving away from the
11:48tche fuel car because there there's some
11:51security limitations with the T check
11:53card and we're moving to a new field
11:55card called uh wax
11:57EFS so there's been announcement on it
12:00every contractor is going to have to set
12:01up an account with EFS the instructions
12:05are on um my ground Biz um if you go to
12:09the uh the Public Announcement there the
12:12um there is a hyperlink that walks you
12:14through how to set up your account um
12:16luckily for everybody in the webinar
12:17space um I've been the guinea pig for
12:19the last three months so I've have a lot
12:22of experience with setting up these new
12:23cars and how uh how useful they are I
12:26will tell you that they have a lot more
12:27security features um um um embedded in
12:32the in the card um and you have as a
12:34contractor you have a lot more control
12:36so it's exciting um that will be
12:38something else that we will talk about
12:39in the future and some strategies and
12:42some explanations about you know how the
12:44cards are going to work and what to do
12:45with them um but those are both two
12:47really good announcements and exciting
12:49news coming up for FedEx
12:51contractors okay yeah and if if anybody
12:54has questions on those some of it we can
12:56answer some of it we can't if you know
12:58especially on the fuel C it's still
12:59coming some the details there but feel
13:01free to ask it in the Q&A and we'll
13:02answer what we can yeah and we when we
13:05get to talking about these new trucks
13:07before we get into um you know talking
13:09about what Tom does I think it would be
13:11helpful maybe Tom as you and I just have
13:14kind of have a discussion about what
13:15does the truck market look like okay so
13:17you know you have a couple thousand
13:19owner operators or a couple hundreds of
13:21thousands of owner operators out there
13:23but then you have these big entities
13:25like your JB hunts your KN Swift your um
13:29old dominions and even your fedexes who
13:31come in and they buy a couple thousand
13:33trucks a year or in yeah about a couple
13:37thousand trucks that they rotate through
13:39pretty quickly every two years or so is
13:42what the typical large um Fleet carrier
13:45how long they run the truck some of them
13:46run it for four years but in general
13:48it's two to four years is what you see
13:50right Tom absolutely and so when they
13:53come in you know they can't just give
13:562,000 trucks to say you know Mom and Pop
14:00um you know truck dealer in Lacrosse
14:02Wisconsin you know they can maybe handle
14:04maybe 50 maybe 25 used trucks they they
14:08need to find a place to offload a th000
14:112,000 operational trucks and so guys
14:14like Tom there is a secondary Market
14:17that facilitates the movement of these
14:19used trucks into and across the country
14:23because a JB Hunt might buy 2,000 trucks
14:27from a dealer in LaCrosse Wisconsin
14:29which is great for that dealer in
14:30Lacrosse Wisconsin but that dealer in
14:32Lacrosse Wisconsin can't handle moving
14:35those 2,000 trucks back into the market
14:37when they come in on trade so guys like
14:40Tom facilitate the redistribution of
14:42those trucks across the country so that
14:45you know FedEx contractors who like to
14:47buy use trucks in say Kazo Michigan can
14:50buy them because Tom somebody like Tom
14:52has either worked as a facilitator to
14:55move that truck to a dealer in kalamazo
14:58or he's connected
14:59that truck to a end user in Kazo
15:03directly would you agree Tom yeah yeah
15:06yes um all of that is accurate so um so
15:11just that that's just the understanding
15:12of the market so as a contractor you
15:15know what I'm trying to do is I'm trying
15:16to decide whether or not to buy used
15:18trucks or buy news trucks and there are
15:20opportunities and there are decisions
15:22making and there are pluses and minuses
15:24to buying a new truck versus a used
15:26truck or buying a used truck versus a
15:27new truck but say you know let's use me
15:29as a perfect example Tom's in Lacrosse
15:32Wisconsin I'm in Colorado with
15:35operations in let's say Independence
15:37Kentucky hey Tom I need three brand new
15:40trucks I need three use trucks um I'm a
15:43freight liner guy so I could use three
15:462019 Freightliner cascad or newer with
15:50uh daycabs um with FedEx specs and uh
15:55less than 400,000
15:57miles right
15:59um
16:02okay just to kind of um to add on to
16:05where you were with as far as with
16:07product and everything like that
16:11um with Co and everything allocation got
16:14cut significantly with the new truck
16:16sales so this has affected the market
16:19quite a bit so with what I do and what
16:22we're about to discuss um the reason
16:24it's important is because what that
16:28means is if uh somebody you know if JB
16:31Hunt was getting 2,000 trucks but they
16:33could only get 35% allocation a year for
16:36four years um you know basically they're
16:39only bringing in you know 700 trucks a
16:42year brand new so what's happening is
16:44those those other 1300 trucks that they
16:47would normally be cycling out they've
16:50had to keep running so now what we're
16:52seeing is there are a ton of trucks out
16:54there with 7even 800 900,000 miles on
16:57them and they're not worth anything
16:59so what we have we're trying to work
17:02with and what Alex you know and all the
17:06the good smart contractors are going to
17:08want they want the lower mileage stuff
17:10right and that's going to be better
17:12equipment so Alex reaches out to me and
17:14he says that he needs the three trucks
17:16in uh in Kentucky and the the nearest
17:20trucks let's just say that I have are in
17:22California um it's going to be very
17:25difficult for Alex to actually touch
17:27those trucks and inspect it
17:29or even have a mechanic that he trusts
17:31and so forth to to uh to look at him so
17:34what I've done is um I have uh a company
17:39called NIS that I use where they go out
17:42and they will send in an inspector to go
17:45in and and inspect all these trucks they
17:49take uh 40 50 60 pictures whatever is
17:53necessary depend you know usually I
17:55suppose if there's more pictures that's
17:57bad because they had to show
17:59things that they didn't want you know
18:01that you hope weren't there um but
18:03that's reality that's just that that's
18:05okay um then we know that we're kind of
18:07we're getting away from a Bad Apple so
18:11um but uh so they go in they do the
18:14inspection they're you know they're
18:15measuring percentage of brakes
18:17percentage of tires or tread depth and
18:19so forth uh seepage on the Block
18:22anywhere uh is is is there oil mixing
18:26with coolant you know I mean just we
18:29need to know right um and they can give
18:32it you know they can tell you no this
18:35thing wasn't any good um or this thing's
18:38beautiful or it needs a couple things or
18:40whatever the story is um generally we
18:43can kind of anticipate what the what's
18:45going to happen on this inspection
18:47because the way I do this is I have
18:49strict trade terms that I purchase the
18:51vehicles based on those terms so what
18:56that means
18:57is uh
19:00the truck that I'm buying it needs to be
19:03minimum it's got to be dot compliant
19:06let's say that we agreed that we want
19:0850% Brakes and Tires um uh as far as uh
19:13seepage or body damage there's a lot you
19:16know there there could be quite a few
19:17things that um can go into this and
19:19that's where on my end I can be an
19:23advocate for the and user for the
19:25customer because that inspection comes
19:28back and what I do is I go back to the
19:30seller and I say
19:32hey um you know our agreement was this
19:36and that and the inspection right here
19:38has got perfect pictures that show that
19:42um the tread you know the tread is not
19:45matching up or tread is not uh adequate
19:48or um you know you got chunks out of the
19:51tires uh the brakes are bad or you know
19:55there's a there's
19:57a we've got a leak on the Block we got a
20:00leak at the oil pan um you know all
20:03those kinds of things are things that
20:05we're able to go back to and it creates
20:07leverage to go back and get that truck
20:11uh either taken care of or we move on to
20:14the next one um once that is done um we
20:19review the inspection and so forth and I
20:22would go back to Alex and they say okay
20:24Alex here's we got the three inspections
20:27you know what do you think and you know
20:29I'll point out what I'm seeing right
20:30away the obvious and
20:32um um as an example an inspection that I
20:36had the other day
20:38um um I actually I I just emailed it to
20:42you Josh if you wanted if you wanted to
20:44show it um but what happened is there's
20:48two tires that came back that came back
20:51at 430 seconds so they're legal they're
20:54dot but they're
20:56not we're not running that that you know
20:59I mean you're going to you're going to
21:01make it down the block and you could get
21:02you could get popped for you know you
21:04could get nailed for inspection so
21:08um so just things like that so what we
21:11did in that case in that situation was
21:15um the buyer of this particular truck
21:18happened to be in Florida so for our
21:20hypothetical here we're just saying it's
21:22in Kentucky with the Alex so in that
21:25situation what we did is we just said I
21:27said um listen we've got uh got a couple
21:29tires that need to be
21:31replaced
21:32um and um they're legal but they're not
21:36really what you know what what I
21:38represented what we were hoping for um
21:42it doesn't put that truck in a position
21:44where it's ready to go make money the
21:45day you bring it home um so in that case
21:48what we did is we just gave a credit
21:49back to the customer and just lowered
21:53the price essentially so he's going to
21:55get a couple tires he's cool with that
21:58um and in in this case um we hired a
22:01driveaway Company the driveaway company
22:04actually came and picked up the truck in
22:06San beradino
22:07California and took it to in this case
22:12they would take it to
22:14Kentucky uh right to the front door so
22:17we figured out with the pricing
22:18everything like that uh on the truck on
22:21the inspection on uh
22:25transport the whole deal um we can have
22:29the truck literally brought right to
22:30their front door with and it was a good
22:32inspection and and there's not any
22:34surprises once that truck gets there
22:36it's what the inspection
22:38was um and that's why the inspections
22:41are so nice a lot of people get offended
22:43if somebody wants an inspection and to
22:46me I I don't really I I don't see a
22:49negative um part of their job is to find
22:53a problem so literally if there if
22:55there's nothing they can probably find a
22:56problem with a brand new truck if they
22:58want
22:59so um but that's okay you know and
23:02that's that's it's reassuring to the
23:04customer the inspections are really
23:06really important every single time I've
23:08ever bought a used truck it's important
23:10to get um either an inspection done by a
23:13third party um don't trust the seller's
23:16mechanic or um if you're buying it from
23:18a dealer then make sure that you're
23:20getting some kind of a uh buy what they
23:23call buyer Assurance so but you're going
23:25through Tom you know if you go through a
23:27third party seller like Tom make sure
23:29you get a third party you know um
23:32independent some uh mechanic to inspect
23:35the vehicle like any NIS Services which
23:37is a nationally known um inspection
23:40service or if you're going to go through
23:42a dealership like tag or MHC or
23:46something like that make sure that you
23:47buy or you get um 90 days Assurance on
23:52your purchase because in the in the
23:53first 90 days um if you're buying it
23:56from a dealer they're going to own if if
23:58there's anything issue with that truck
24:00and they can take it back and they'll
24:01repair it or in Tom's case um by doing
24:04this inspection then you know that um
24:07everything has already been identified
24:08and they're going to make sure and
24:09they're going to stand by their word
24:11that hey that engine's good that
24:13transmission good those tires are good
24:14the electrical system is
24:17good yeah because you're putting a lot
24:19of in especially when it's a used
24:21vehicle you know you don't you can never
24:24just trust a seller like Dom's saying um
24:28who knows what they did when they were
24:29using the vehicle so an inspection is
24:31one of the most important things you can
24:32do to make sure that the vehicle is as
24:36advertised right and and and it's not
24:38even uh a comment about the seller
24:42really I
24:43mean they got thousands of moving Parts
24:46man things break and that's just the
24:48reality of it and that we want to try to
24:49do the best we can to get that product
24:53in front of the customer ready to go on
24:55day one um because you know h hly I tell
24:59people all the time anyone that ever
25:00tells you a truck's not going to break
25:02they're a liar so that's the reality and
25:05the other thing is to actually um I know
25:07people have said have asked me in the
25:09past like oh I don't want to buy a truck
25:11from JB Hunt or Old Dominion actually
25:13it's the exact opposite you really do
25:16want to buy a truck a used truck that
25:18came from one of the large fleets
25:20because they have a very specific
25:22mainten program that that truck has been
25:24followed um and these are very well-run
25:27organizations in and so they're going to
25:29hit their metrics every 35 or 45,000 Mi
25:32that truck is in the shop being
25:34inspected by a uh a a certified diesel
25:38mechanic that can oper that can work on
25:40you know whether it's a freight liner or
25:42a Kenworth or a Volvo they're trained on
25:44that equipment and they're going through
25:46and doing all their uh preventative
25:48maintenance checks to identify that
25:50vehicle and they're going to have a very
25:52robust maintenance package that Tom is
25:54going to be able to hand you and say hey
25:56this is all the maintenance history in
25:57this vehicle this is when the last oil
25:59change was done this is when the last
26:01overhead adjustment was done this is
26:03when the last differential flush was
26:05done and so that gives you a lot of
26:06peace of mind that that truck is being
26:08taken care of and in my experience I'd
26:11prefer buying a truck from JB Hond or
26:14Old Dominion versus buying from another
26:16fellow contractor um at least with JB
26:19Hond or Old Dominion I know exactly what
26:20I'm getting and I'm getting a lot of
26:22history
26:23there yeah that's that's true um now Tom
26:27do you so Tom in this instance you you
26:30you you've arranged for me to we we
26:32found these three trucks you've we've
26:34talked about the price already and
26:36you've arranged for the transportation
26:38from California to here um but hey uh I
26:41only got like $88,000 to buy these
26:43trucks is that going to be enough to buy
26:45these three trucks well I mean if you
26:48need to do financing um three or eight
26:51grand might be light on the downstroke
26:53but you know that's that'll get you in
26:55the door maybe I can scrape by maybe I
26:57can scrape by let's see um how about if
27:00I if I can scrape by 20 $25,000 is that
27:04going to be I think you might I think
27:06you might be in business okay so how do
27:08how who do I go to if I need to buy some
27:10if I need to finance these used trucks
27:13sure what normally what I would do um I
27:16actually I work with ap financing out
27:18laida which does a ton of work with
27:20FedEx so um so honestly I send a link to
27:25one of the guys out there and you fill
27:28out a six line credit app and and that's
27:31that um and they're fast they're
27:34good um they uh they get it done pretty
27:38quick and you know they're easy to work
27:40with they're they uh they're not coming
27:42back with making you go get things
27:44notorized you know and you're next of
27:47kin and the whole deal so um agreed in
27:52the used truck space um for for uh FedEx
27:56line hall contractors for tsp
27:59um your number one choice should go to
28:01AP Finance um after AP Finance you can
28:05also look at Bank of America JP Morgan
28:08Chase Bank of Montreal and Wells Fargo
28:10also have pretty robust um what they
28:13call Rolling Stock financing operations
28:16so tractor trailers what we operate um
28:20Class 8 heavy vehicles um are called
28:22Rolling Stock in the banking industry
28:24and so those are other uh other banks
28:27that you can go get fin financing from
28:29um and then uh some Savings and Loans or
28:32local Community Banks will finance uh
28:34tractor trailers too but that's on a
28:35casebase basis and generally requires
28:38you to have some kind of banking
28:40relationship with that local Community
28:43Bank yeah I you know AP is actually
28:45they're just they're really good they're
28:48flexible um you know based on credit
28:51history and things like that you don't
28:53have to necessarily walk in with A1
28:56credit every single time if you're a guy
28:57that's getting started and you've only
29:00you know if you're just at two years on
29:02your CDL or whatever um that's usually
29:05the biggest obstacles how long you've
29:06had that CDL so um you know once
29:10company's established it gets easier so
29:12typically you can kind of expect if
29:14you're doing the financing initially is
29:18they may want more money down so you got
29:20to be a little more creative and stuff
29:21like that um and like I say I do have a
29:26a good relationship ship with them where
29:30people that are new to the to the
29:33industry or not to to FedEx themselves
29:37they're new to the industry like I said
29:38it is a little bit more of a change but
29:41um AP is a great
29:43source every single time um I would say
29:47so when you look at the market in
29:49general and we can get into more details
29:51if you if our guests um or attendees
29:54have questions on this but um just to
29:56give you an idea I have 36 truck TR on
29:58my fleet um I will cycle through and buy
30:03anywhere from three to eight trucks a
30:06year um because my fleet is both you is
30:08both solos and team trucks um and a lot
30:12of times I you know my team trucks I'm
30:14always buying new because that's just
30:15the way I run my operation and that's a
30:18different discussion but on the on the
30:21solo on the daycabs um I'll go back and
30:23forth buying um used and new based off
30:26of the number of miles
30:28and what the the market is for used
30:30trucks so when used trucks are say in
30:33that $40 to $50,000 range it makes a
30:36very compelling case to buy a used truck
30:40um at that cost because the cost per
30:42mile is really compelling versus buying
30:45a new truck so if you think about it
30:47this way if you buy a used truck say the
30:50example we just had a 2019 freight liner
30:54Tom is going to be able to get it to me
30:55somewhere between 40 and $50,000
30:58um if I assume I'm going to run that
31:00truck for three years and I I'm put it
31:03on a run that's probably going to do
31:04about 100,000 miles a year that cost per
31:07truck when you take that $40,000 and
31:10divide it by 300,000 miles then that
31:13cost per mile for that truck is 13 cents
31:16per mile it's just a simple math
31:17equation it's 40,000 divided by 300,000
31:20now when I look at a new
31:22truck um if I'm buying new trucks at say
31:26165 I'm assuming I'm going to going to
31:28get 7 and 1 half to 8 years on that
31:30truck so doing the same math you take
31:33165 divided by 750 now that cost of
31:36truck is around 22 23 cents a mile now
31:39there are a couple more things you have
31:41to add to it you have to assume that
31:43your maintenance is going to be more
31:44expensive on that used truck versus that
31:46new truck and so they kind of the
31:49difference in um the cost per mile is
31:52not as great as 13 cents versus 22 cents
31:55the cost per mile really gets to about
31:5825 cent for that new truck versus 23 or
32:0124 cents per mile for that used truck at
32:0440,000 now if that used truck is
32:05$880,000
32:07it it makes it a much more challenging
32:10conversation to have because at
32:12$80,000 buying a new truck is much more
32:16um is is a much better financing op much
32:20better financial decision at that point
32:22but there are plenty of times like I
32:24just bought two used trucks in November
32:26for $40,000 and it was a great buy so I
32:29would definitely always look at the used
32:31Market versus the New Market and and
32:34make that decision based off of what is
32:36my cost over the life expectancy of that
32:38vehicle that's what you have to do as a
32:41FedEx contractor um to understand when
32:45it's the right time to buy used trucks
32:46versus the right time to buy news
32:48trucks Tom do you have anything to add
32:51no I I think it's accurate um with
32:56uh again getting back to co the the
32:59pricing is had Extremes in the used
33:02Market um you know there was literally a
33:05point in uh
33:092022 late 2021 where it was so hard to
33:13get a new truck that people were
33:15literally paying as much or more for a
33:17used truck just because they needed the
33:19product um so and it so in that case um
33:24to your point your your cost per mile is
33:27going to be as economical
33:29although typically that stuff that you
33:31were seeing that was used that was
33:33bringing such big money they were still
33:35under o and warranties and things like
33:37that you know I mean so but still it it
33:40uh for what you were paying was
33:42ridiculous you know um it was tough to
33:45sustain that especially for a new guy
33:47now it's the market is adjust down
33:50enough
33:51price-wise that um you know literally
33:54you can buy four used daycabs for this
33:58you know with good miles for the same
34:00price as one newon so yeah agre and this
34:03is something very important for all my
34:05uh all our attendees that as we approach
34:08carb
34:0927 doing this financial calculations is
34:12going to be really really important for
34:14you to be able to generate sufficient
34:17margin to make uh for for the being in
34:20the FedEx space to be worthwhile okay so
34:23you're going to have to every single
34:25time you need to buy a truck you're
34:26going to have to do this math look at
34:27the used truck Market versus the new
34:30truck as we approach carb 27 because
34:32there are going to be times when used
34:34trucks are very cheap and then all of a
34:36sudden some OEM or some big dealers
34:38going to be like or some big uh Fleet
34:40carriers going to be like I can't get
34:41enough trucks to the oems and I'm going
34:43to come in I'm going to bid up or I'm
34:45going to buy a bunch of used trucks and
34:47the the the price of used trucks is
34:48going to Skyrocket and then at that
34:50point in time you need to take a step
34:52back and say hey hey hey I can't I can't
34:54make enough money buying a used truck at
34:57this price so the next three years
34:59there's going to be a lot of Peaks and
35:02valleys in the used truck Market as we
35:04approach that carb 27 end date yeah and
35:07it's going to be guys like Tom are going
35:09to be really important for you to talk
35:10to and say hey what's the used truck
35:12market like like right now you know are
35:14are you finding good value or is it you
35:17know is the market really
35:19expensive yeah oh you go Tom oh no no I
35:23was just gonna say I mean I think that
35:24the market is in great shape right now
35:28um I actually um we kind of anticipating
35:32probably towards the end of the first
35:34quarter that you actually may see
35:35wholesale pricing going up just a little
35:37bit um just because more people are
35:39getting into the
35:40space um there's been a lot of um you
35:47know there's been a lot more action
35:49since November quite frankly so um where
35:52there's more people that are a little
35:53more confident um that are going to get
35:56out there and you know get after it so
35:59um but yes go Josh yeah yeah no I mean I
36:03was just going to say like you know the
36:05the big thing here that a couple of
36:08things we want to make sure everybody
36:09knows one is uh you will hear people who
36:13are extremely successful using only new
36:15vehicles and you will hear of people who
36:17are extremely successful using only used
36:19vehicles or some kind of mix in between
36:22but the the thing that is I think Alex
36:24did a great job of highlighting is that
36:27there are calculations you can do there
36:29are considerations you make for your
36:30business and the cost that you're
36:32incurring and the revenue you're
36:33generating and you can really think
36:35through this at a granular level because
36:39sometimes it will be that the new truck
36:40is the best fit and sometimes it's the
36:42use but you can't just assume that one
36:45blanket policy will work at all times of
36:47year for every type of run for every
36:49type of uh truck that you're thinking of
36:52buying and so this is something that
36:54it's important to think about and have
36:55an actual strategy around this and work
36:58that you do to develop uh relationships
37:01like with Tom if you're trying to get a
37:03used vehicle or or the right person if
37:05you're trying to buy a new vehicle
37:06whatever the case may be that that's
37:09this is something to think about as more
37:11than just a oh you know I guess I need a
37:13new truck uh like there is some strategy
37:15and some thought that really needs to go
37:17in this if you want to be successful
37:19especially as things like Alex mentioned
37:21as carb 27 coms there are additional you
37:24know restrictions and costs that can
37:26come with some of of these vehicle
37:28changes that'll continue to happen over
37:30the years and being flexible and having
37:32different Avenues to pull on different
37:35relationships to to leverage to find the
37:37right vehicles at the right times is how
37:39you'll be successful in this
37:41[Music]
37:42industry so uh I think we'll we'll pause
37:46kind of the conversation here to to kind
37:49of go over some uh upcoming events and
37:52uh
37:53upcoming uh listings that are coming out
37:56um while I'm talking when everybody
37:58should type their questions into the Q&A
38:00that if you have any uh the other thing
38:03um if BR if you'll go ahead and drop uh
38:06Tom's contact information into the chat
38:08for people and we'll send it out uh
38:10after the webinar too if you're looking
38:12for how to contact Tom we'll put it in
38:14the chat in just a second now um couple
38:17of new listings this week uh first two
38:20are line hall so if you're on here for
38:22lin Hall we've got two a couple new ones
38:24for you this week uh the first one's out
38:26of Tennessee it's six line hall runs at
38:28three million so this is 11 employees
38:31six trucks it's five dedicated teams and
38:34a dedicated solo so um if you're looking
38:37to get into the space this is a really
38:38solid set of dedicated runs generating
38:41High Revenue in uh close to home for me
38:43in central Tennessee um and these are
38:46newer model uh line hall Vehicles as
38:49well uh the the next one is out of
38:52Georgia it is six line hle runs at 3.3
38:55million again this is four DED dedicated
38:57teams a dedicated solo and a dedicated
39:00or an unassigned team run so two pretty
39:03large line hall operations that we have
39:05hit in the market this week Central
39:07Tennessee and Georgia if you have
39:09questions on those reach out to us we
39:11can give you all the details all the
39:12financials and and help you out from
39:14there now we also have a new Amazon
39:17listing this week out of Texas it's
39:19between 18 and 24 routes on the Amazon
39:22DSP side uh 59 employees 26 trucks and
39:26four managers so uh if you haven't
39:28looked into Amazon those can feel a
39:30little bit different in size the average
39:31Amazon operation is larger and so you'll
39:33see things like that where there's 59
39:35employees and and uh four managers at a
39:38business like that so again that was in
39:40Texas so if you're interested in Texas
39:42and getting into the Amazon space we
39:44have a new one there uh for 500,000 uh
39:46in Texas we've also got a new EMS
39:49listing that just went live this week
39:51out of Arizona this one's at listed at
39:54$250,000 with five employees and four
39:57trucks uh if you haven't heard about the
39:59EMS space if you haven't heard us talk
40:01about it we got all kinds of content you
40:03can go watch but it is an opportunity to
40:05be in a very different uh a very
40:07different space but also very similar
40:08it's just that the packages you're
40:10delivering are people so uh different
40:12things to think about there but we have
40:13new one of those uh that went live this
40:15week uh a couple of uh events to quickly
40:18highlight especially for those of you
40:20who are interested in a line hall space
40:22uh we've got a happy hour that was in LA
40:25but we've got rescheduled to San Jose as
40:27you can imagine uh La is not the best
40:29place to host an event right now so uh
40:32San Jose is where the event will be it's
40:33on February 25th uh and it's a happy
40:36hour and we're also going to have some
40:37content uh Tim Goff is going to be there
40:40and talk a little bit about uh how you
40:42can save money and optimizing the line
40:44hall space so uh he'll be out there and
40:47we'll be out there in about a month so
40:48if you're in the West Coast Area we do
40:50have that happy hour free to attend uh
40:53you can get all the details online uh we
40:55also are having a uh large kind of uh
40:59Road show that we're doing specifically
41:01focused on line hall coming up on March
41:0327th and 28th in Houston Texas uh so if
41:07you're in that area we're going to have
41:08vendors we're gonna have content you're
41:10going to be able to meet all of us there
41:12uh I think we'll all be there Alex and
41:13Tom uh at that event in Houston so if
41:16you're interested uh that is again free
41:18to attend but it's just important to go
41:21ahead and sign up so we know you're
41:22coming and we can prepare for you and
41:23make sure that we've got a name tag for
41:26you so um other than that I'm seeing
41:28some uh questions come in but all of our
41:30events are online on our our website so
41:33if you have questions on any of those we
41:35can give you all the details and they
41:36are free to attend okay so um I I see
41:41somebody requesting information about
41:43the listings uh I see your number deeta
41:46we can make sure that we reach out today
41:48uh I also I saw a hand raise from
41:51Matthew uh if if you have a question put
41:53it in the Q&A and we'll answer it um and
41:56get back to it in just a second but
41:58deveta I did I do see your info and we
42:01will make sure to to reach out about
42:02those dedicated lines in
42:05Georgia uh so this one here's for you
42:07Alex uh is it possible for someone with
42:10no real Logistics experience to enter
42:12and be successful in line hall without
42:14going through any kind of consulting or
42:17training I'm your perfect example I did
42:19it you know I did it six years ago um I
42:22came into this space um uh without any
42:26line hole or Truck Driving Experience I
42:28still don't I'm still not a truck driver
42:30I still don't have my CDL um I was a um
42:34I was actually a bond Trader before I
42:36got into the space I used to work on
42:38Wall Street um and uh bought four
42:43runs six years ago in Memphis Tennessee
42:47um and I learned uh by drinking from the
42:51fire hose I had a good manager for that
42:53first nine months and then he quit um
42:56but he taught me a whole hell of a lot
42:58about the business um from there I was
43:00able to hire um new managers and grow
43:03into Olive Branch
43:05Andy so yeah it's definitely uh done I
43:08would say the majority of people um who
43:12buy into this space um are not don't
43:15have any Logistics experience I mean I
43:17can
43:18name I mean you know of my closest
43:21friends in this space and understand
43:23that once you join the lon Hall
43:25Community become a Lon Hall contractor
43:27you enter into I want to say a pretty
43:30supportive fraternity of men and women
43:33who are in this space And so there's
43:35myself but I mean none of us had any CH
43:39of trucking experience before this I
43:40mean there's a couple old school guys
43:42like your Dave tamas or Mike Skyler your
43:44Steve Campbell or Steve Crawford who
43:47grew up as you know a truck driver and
43:49started with one truck and have grown
43:51and been very successful but most of the
43:53guys who've entered in the last 8 to 10
43:55years I would say since like Spencer got
43:58I mean when Spencer got in the space 10
44:00years ago 11 years ago I mean he didn't
44:03have any logistic space so it doesn't
44:05take it it just takes a person who is um
44:10can do a couple things uh the big one is
44:12you need to be able to ask questions
44:16learn and Implement what you learn um
44:20and there is no dumb questions there are
44:23it's always good to be asking questions
44:26um and two the other thing you have to
44:28be is willing to you know to work um in
44:31the areas that FedEx wants you to work
44:32on so FedEx prioritizes safety so you
44:35need to have safe
44:36operations uh so you have to be
44:38understanding what are the safety
44:39metrics that FedEx looks at and we've
44:41talked about that and we'll have more
44:43webinars where we talk about that they
44:45want to know that you're going to be
44:46able to put drivers in your trucks so
44:48you have to be good at recruiting or if
44:50you're not good at recruiting you have
44:51to find a thirdparty vendor that you can
44:53do good recruiting with um you know my
44:57favorite is Bri flag Tony Toby uh but
44:59there are others out there um and then
45:01the third thing that you have to do is
45:02you have to have trucks that are up and
45:04rolling you know you can't get paid if
45:07your trucks are not moving and you can't
45:08have trucks moving if they're not you
45:10know if you don't buy good trucks and
45:13don't perform maintenance on it so you
45:14need to be able to perform maintenance
45:16and I'm not asking you to be a diesel
45:17mechanic but you need to have the
45:19ability to build relationships with
45:21mechanics or dealers who can do that
45:24work on those vehicles for you and so in
45:26each of my locations Olive Branch
45:28Memphis and Noki uh Independence
45:30Kentucky I've built relationships with
45:32mechanics who will look at my vehicles
45:34and there are plenty of third-party
45:36vendors whether you go from the oems to
45:40the um to the truck Fleet Maintenance
45:44providers like a Clark power service or
45:46a Dickinson Fleet Service or you can
45:48just go to you know for example I use
45:51Northern Kentucky Truck Service in
45:53Independence K actually yeah they're in
45:55Independence Kentucky it's
45:57you know it's this great guy named Dave
46:00who has a five Bay Mechanic Shop and he
46:03takes great care of my trucks so I mean
46:06it's just finding those opportunities
46:08and you know and building those
46:10relationships and how do you find out
46:12that information you talk to other
46:13contractors or you come to us here at R
46:16consultants and you talk to us and we
46:17can put you in touch with
46:19people yeah and and I think that's
46:22exactly right I would Echo you know
46:24everything you just said there of most
46:26people who get into the space face don't
46:28have any experience I think I think part
46:30of your other question is can you go can
46:31you come in without consulting uh yes
46:34you can most people like a lot of people
46:35do but the reason we design the
46:36Consulting is to hopefully help
46:39accelerate your learning curve um and
46:41that's always the design of things like
46:42that of like the program's designed to
46:46teach you the things that took us longer
46:48to learn than we would have liked uh and
46:50hopefully save you some time and money
46:52on that front end to get you up to speed
46:54more quickly yeah I mean and look I mean
46:57we do Consulting here at Route
46:58Consultants there are a number of other
47:00contractors whove also do a side
47:02business of Consulting you know I'm not
47:04going to say we're the best I mean I
47:06think that what Josh and I do is great
47:08um and we'd love to be to partner up
47:10with you but there are other guys out
47:11there that you know you can go ask um
47:14you can come to us and ask us of you
47:16know other contractors that we've
47:18provided Consulting forces services for
47:20and is it worth it I think it is I mean
47:22we make a very dramatic change for our
47:25tsps that we work with we either
47:27identify issues with their operation and
47:30why they're not making as much money as
47:31they should be so your margin should be
47:34somewhere between 15 15 and
47:3725% okay I mean that's just basic math
47:40of how our business is structured and
47:42what FedEx wants to pay us that's what
47:44your margin should be and if you're not
47:45then we can do a deep dive into your
47:47business to identify where are you not
47:49generating enough margins and where are
47:51you're spending too much money and how
47:53can you become more efficient and then
47:55from there we can also help you figure
47:56fig out how do I grow and organic growth
47:59is the best way that you're going to
48:01create equity in your business and
48:03increase the value of your business
48:04because at the end of the day someday
48:06you want to sell you bought your four
48:08runs now your 30 runs you're going to
48:10want to sell those 30 runs so at some
48:12point in time I'm going to be knocking
48:14on well not Josh's door but Butch's door
48:16and say hey Butch and it's been a great
48:18run but you know it's time for me to
48:20right off into the sunset you know where
48:22can you sell my business
48:25for yeah exactly exctly and that's the
48:28whole idea is help you get in and pay
48:30the right price for the right business
48:32help you be successful once you're there
48:33and then ultimately when you do decide
48:35to exit help you get the most money that
48:37you can uh and find the right buyer so
48:39that's the that's the the full circle
48:41but you know we can answer any questions
48:43you have and in particular if you have
48:45questions that you don't want to ask on
48:47here or it's more specific you can
48:49always reach out to us directly info
48:51rout consultant.com will get to me uh at
48:53some point but that's probably the
48:55fastest way to to get to me uh I I do
48:58see kind of a follow-up here though Alex
49:00so I know this is a range uh but how
49:03much time commitment is needed I'm doing
49:05a full-time job but I don't want to
49:06leave immediately until I feel the love
49:09the lovely thing about being in this
49:11sector is that you can spend um if
49:14you're willing to pay for it you can
49:16spend a lot less time in your business
49:17just understand that you're going to be
49:19eating into your margins so um for
49:22example um I used to do payroll myself I
49:25used to do recruiting myself I used to
49:28do um a lot of back office functions
49:31myself um and I wor I worked a full-time
49:34job and this is all I did from 6:00 a.m.
49:37to 6 p.m. um and then I got smart and
49:40said you know what I'm going to hire or
49:42pay for other people to do these things
49:43for me um and so I focus on what I'm
49:46good at because I let me tell you I suck
49:49at recruiting I really really suck at
49:51recruiting so initially I used Tony at
49:53bright flag and she did a great job of
49:55sourcing driver for me and then
49:57eventually I grew to the point where you
50:00know Tony and I had a Frank discussion
50:02and I said you know what I think we're
50:03going to have to hire my own recruiter
50:05internally and so now every recruiter
50:07who works for me and does that so that
50:09eats into my margins a little bit but it
50:11takes it off my plate and I don't have
50:12to do that I have a payroll specialist
50:14that handles payroll for me so I don't
50:15have to do that um you can go to Tim gof
50:19or John haly or um lie Muse and buy
50:25their software and they'll do your
50:27dispatching and your scheduling and
50:29they'll do your maintenance reporting
50:30and your ivms um you can go to Flint and
50:33Flint can help you with your ifas and
50:36your ivms you can go
50:38to um uh uh Dave what's it got D John
50:43Davis um and he can do your safety
50:45program for you so there are people out
50:47there who can take things off your plate
50:51and allow you to to continue to work
50:53your full-time job and you can just be
50:55talking to your manager in the morning
50:57and the evening and getting a recap I
50:59mean it's totally doable just understand
51:01that your margins are going to be lower
51:03but you know the nice thing about FedEx
51:05is that you know that you can afford to
51:08do those kind of things if you want
51:09until you grow your business to the
51:11point where you this becomes your
51:12full-time job I'm like look I mean when
51:15I first started it wasn't a full-time
51:16job I've now grown to the point where I
51:19mean I could make this a full-time job
51:21for me but I don't I work about four
51:22hours a day in my business I spend the
51:24other rest of my day talking to Josh and
51:27being on phone calls and you know doing
51:29consulting work
51:31and uh looking other you know investing
51:34in other businesses um so I mean this is
51:37this is really you know I really enjoy
51:40being a lion Hall contractor I really
51:42love the community um and this is you
51:46know this gives me the financial and the
51:48lifestyle that I want where allows me to
51:51travel to go visit my kids um who are in
51:53college and yes you know I'm bald I mean
51:55I might not look settle but I do have
51:57kids who are not home anymore
52:00so perfect yeah um so I I think that's
52:05that really answers it I mean there's
52:08there are all kinds of different ways
52:10you can different amounts of time you
52:11can spend in the business it's just a
52:12question of you know sometimes you might
52:15spend a little bit for vendors to free
52:17up more time but I know you know
52:19probably most of the Ln Hall contractors
52:21I know are more focused on working on
52:25the business instead of in it uh I think
52:27that Lin Hall as opposed to p& has much
52:29more uh ability and flexibility there
52:32for that to be kind of the lifestyle you
52:33go after um but management and having
52:36the right employees look making sure
52:38that when you're looking at which
52:39business to buy into that you understand
52:43what types of things you're handled by
52:44the managers right now versus the owner
52:47and kind of understanding what are the
52:48things you would have to do or Outsource
52:51is really important in that evaluation
52:54process um there are so deveta I I see a
52:58few questions here several of them I
53:01like I said I made sure we updated your
53:03number and we're going to make sure to
53:04call you uh we can several of these are
53:06kind of specific and we can answer um
53:08but a couple of them I think is kind of
53:11a uh a more General thing that are we
53:14can answer and talk about a little bit
53:16here so like what does drug testing look
53:17like in this space Alex okay so uh drug
53:21testing is really convenient because we
53:23operate under FedEx's do number and
53:25under their dot Thor
53:27FedEx as the motor carrier on record has
53:29is required to do the annual drug
53:31testing or the uh the sorry the random
53:34drug testing that we are required under
53:36the
53:37FMCSA um so FedEx will notify you on a
53:40monthly basis um which of your drivers
53:43have been randomly Chosen and while
53:46they're on duty because that is a DOT
53:48requirement they have to come um on duty
53:51they just can't come in on their off day
53:53but they have to come in on their
53:54workday um and take a random drug test
53:57either before or after their trip uh
54:00depending on the time and usually FedEx
54:02at the larger facilities facilities
54:04FedEx will have a drug screener on site
54:07so think of the Hub so think of like
54:09Rialto California or Woodbridge New
54:12Jersey or Memphis Tennessee um in the
54:15stations a lot of times they will use
54:18they will send you out to a Concentra or
54:21a Quest Diagnostics and have your
54:23drivers um go to those locations and do
54:25their drug
54:26screen um and it's a random um right now
54:30under the FMCSA
54:3225% of all drivers in the United States
54:35have to be tested uh on a monthly basis
54:39uh because of the failure rate of our of
54:43the national uh drug
54:45screenings and a lot has to do with
54:47marijuana to be honest that's that's the
54:49most important reminder I was going to
54:51give is even if it's legal in your state
54:53FedEx is going to test for it and it's
54:55not legal for them to be to to be using
54:57it and operating they will fail the drug
54:59test yeah regardless of what the state
55:01requirements is if it's illegal at the
55:03national level then it's illegal for
55:05FedEx and it's illegal for your FMCSA
55:08and do so um yeah I mean there's a lot
55:12of there's a lot of advantages of
55:13working for FedEx um because we operate
55:16under their dot Authority we don't have
55:18to pay as much in insurance we don't
55:20have to pay for trucking insurance FedEx
55:22is required for
55:24that perfect well I I think we're we're
55:28at the end of time here um oh
55:31so deeta this is a question about Canada
55:35um I'm not even going to go into
55:37Canadian laws but basically if FedEx
55:39decides that uh you won't like if you
55:43can't use it with f in the FedEx Network
55:45they won't let you you'll still fail the
55:47drug test yeah so yeah there's there are
55:51certain I mean there are at the federal
55:53level for CDL holders they there are
55:57because of the US New Mex Mexico and
56:00Canadian um trade rules CDL holders are
56:04all held to the same standards across
56:06the country just like uh Pilots are held
56:08to the same standards so you can't be
56:11smoking pot and flying an aircraft and
56:13you can't be uh smoking pot and driving
56:15a tractor in any of those three
56:17countries um I would say deveta the best
56:20thing for you to do given all your
56:22questions um it would be to reach out to
56:24Josh um and we can up a call to discuss
56:27a lot of these uh specific questions
56:29that you
56:30have perfect all right so Tom thank you
56:34so much for being like we said we put
56:36all of your info in the chat if anybody
56:38has questions if you're trying to get
56:39vehicles or if you're just trying to
56:41make sure you know him for when you are
56:42ready to get them um we put all that
56:44info in the chat so and we'll send it
56:46out after the webinar too but Tom thanks
56:48for being on here and providing your
56:50Insight there very nice thank you very
56:52much for having me yeah and Alex always
56:55a pleasure having you as well uh and we
56:57will see everybody on this call in the
57:00in the March Road show but U other than
57:03that we'll be here uh on the webinar
57:05next time so thanks everybody weeks
57:08we'll be we'll be here for Super Bowl
57:09week oh wow okay maybe we need to think
57:13about what what uh we bring to that call
57:15Alex Doritos yeah probably yeah Mountain
57:18Dew
57:20yeah perfect all right well thanks
57:22everybody for being on here and we'll
57:24see you all next time maybe it'll be
57:25more exciting we'll see bye thank you

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