Choosing a Trucking Company: Environmental Risks

Choosing a Trucking Company: Environmental Risks

Operators are in the business to make money. Their business model accepts responsibility and risk, and in return accepts cash. The more responsibility accepted, the more cash, the greater the risk the greater the return.

Responsibility is usually the easiest to calculate. Which load, at which location should be brought to which destination by a specific time and produces a predictable dollar figure of revenue.

Risks, however, are not always that easy to calculate and factor into the operators business model. Some time delay risks can at least be partially compensate for: picks, drops, customs etc.

However, some intangible risks are less definable: freight claims, accidents, DOT inspections, fines, weather (and a host of others). Markets such as: tankers, refer, dry van, flat deck, livestock, logging, bulk, LCU”s etc. also have their own specific risks, all difficult to factor into costs.

Each risk must be accepted and managed by the operator in order to navigate to a successful financial conclusion. Some risks must be worked through while others avoided whenever possible.

In the last decade there is a risk operators have been exposed to that should be avoided at almost any cost… ACERT-EGR-DPF-SCR…aka… EPA-BS. It may be a tough risk to avoid but too often it’s been the death of even exceptional operators.

I’ve always appreciated a good mechanics advice to Detroit’s pollution control devices from the 1970’s… once the warranty is off… ripe it all out! Common sense is just common sense! Fuel mileage went up emissions went down… everybody happy! But apparently radicals have limited common sense.

If a trucking company purchased 20 trucks and found a 60%+ increase in maintenance they can hire a lawyer for $50,000 to fight the manufacturer at $2,500 per truck, but a single operator can’t afford to spend $50,000 to save $50,000(+/-). The best option an operator has is AVOID the risk entirely.

With regards to upgrading your truck, companies must remember YOU are accepting the risk… not them. It’s YOUR business… NOT THEIRS! If the company forces the issue maybe it’s best to let the company handle the risk and drive for them, or take your power to those who appreciate common sense business models.

The problem with environmental legislation is the historical melding of politics and science. I have a close friend who is finishing up his PHD in his field of research. Some of his piers get jobs in industry. However some don’t follow the corporate route and chase government grants for their paycheck. Competition for grants is all about marketing and presenting a sense of value, even better if it’s tied to a crisis (real or imagined).

This means unethical scientists (a true contradiction in terms) who fudge data (see climate-gate), can manufacture controversies. Add to that groups who refuse to acknowledge industry environmental advancements (ie. Oil Sands surface mining verses In Situ or surface drilling) and you get extreme disinformation and even fraud.

Giving “scientists” the freedom to manufacture a crisis is a lot like giving tire shops permits to randomly throw down spike strips on highways. Tire manufacturers would get in line, so would the national association of tow trucks, flare manufacturers, credit card companies, and even fuel companies who would fuel the service vehicles. The economic boom would be tremendous. But who pays? You… the operator!

Trucking Companies that require operators to have newer trucks are still embracing old business models, just not thinking through their policy. They believe it’s the truck that makes on time delivery not primarily the driver. A fleet of well maintained older trucks operated by top drivers can out perform the new trucks any day of the week, just ask any tow truck driver what age truck is his bread and butter the last few years.

As a successful operator you MUST factor in all industry risks into your business model. If the company requires you to take on too much risk… walk away! When enough operators vote with their feet the industry will have to take notice.

Robert Scheper

Robert D Scheper has a Masters Degree in Business Administration and is the author of two books, “Making Your Miles Count: Taxes, Taxes, Taxes” and "Making Your Miles Count: Choosing a Trucking Company".

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