Featured Article: Renewed hope
Jerry Lee, her German shepherd, and two small dogs ride in her truck. She fixes all of her meals in a cab equipped with a refrigerator and microwave.
“Everything seems against you out here. Sometimes you’re surprised that people are out there willing to help,” she says.
Mike Burbidge found assistance from Landstar Systems, to whom he is leased. Landstar lent him the money to pay $8,000 in towing fees and repairs on his 1999 model truck. He is repaying the debt in his settlements over a year.
The 63-year-old resident of North Las Vegas, Nev., is relieved that he postponed buying a new truck in 2008.
“That was my best year,” Burbidge says. “Now, things are tough. Your credit has to be perfect, and you have to pay down at least 20 percent.” With 22 years in trucking, Burbidge adapted to the recent downturn by selling his car, which he says he didn’t use anyway. Like Nemeth, he has no permanent residence and stays with his children when he’s not hauling freight.
David Owen, president of the National Association of Small Trucking Companies, says he was able to help a small fleet in securing a loan to add two or three trucks. NASTC’s fuel card partner, Fleet One, wanted the fleet owner to make a larger cash deposit, but Owen negotiated to have the owner agree to pay his fuel card twice weekly instead of once a week. Fleet One agreed to extend the credit.
Three years ago, NASTC started conducting monthly training for owner-operators who want to start small fleets. “The locking up of the credit system has totally dwarfed growth, particularly in small trucking companies,” Owen says.
Not only is credit much tighter than it was before the recession, many owner-operators have seen their credit scores drop as they struggle to stay in business. Because it takes years to significantly improve credit scores, perseverance in financial discipline is key.
“Budget – this is the big thing,” says Russell Fullingim, of Truckers Financial Services in Corning, Calif. The 77-year-old former owner-operator says clients rarely plan or follow through on a budget. He advises clients to record every expense and examine their spending closely. “It’s ridiculous how much money we spend playing video games,” he says.
He says that, despite the freight downturn and financial turmoil, hard-working owner-operators can stay alive if they control expenses. For example, driving at lower speeds will reduce fuel costs and prevent tickets, Fullingim says. He and Burbidge advise looking for higher paying freight or accepting loads to challenging regions, such as northern states during the winter.
Jay Seaton of the Cleveland, Ohio, branch of nonprofit Consumer Credit Counseling Service cautions owner-operators to separate personal and business finances. “Small businesses often use personal credit to pay business bills. That’s when they get into trouble,” he says.
Stuffing fuel receipts under a cab visor or in pants pockets doesn’t work, says Linda Shedrow, debt management manager at the Consumer Credit Counseling Service of Northwest Indiana. Shedrow also helps prepare truckers’ taxes outside of her debt management service.