Pulling profits: The pros and cons of trailer ownership

Jackie Wormley of Hutchins, Texas, bought her first trailer in 2006, even though she was leased to a company that required owner-operators to use its trailers. She waited until joining Landstar in 2011 to put the trailer into service as part of her “run smarter, not harder” philosophy. The result, she says, is increased revenue and better control of her business.

“Last year, I ran less than 70,000 miles and had an increase in revenue of about $6,000 pulling my own trailer,” Wormley says.

The extra revenue is not the only financial payback for Wormley. With the addition of an ATDynamics Trailer Tail, wide-single tires and small airflow enhancers called Airtabs, she is boasting more than a mile-per-gallon savings over her prior operation.

A leased owner-operator owning his or her own trailer can expect to earn 3 to 12 cents per mile more, with the average being about 6 cents, says Todd Amen, president and chief executive officer of the owner-operator financial services company ATBS. That equates to a $350 to $800 increase in monthly revenue.

However, financial gain wasn’t Wormley’s main motivation. “The number one benefit of buying a trailer is CSA (Compliance, Safety, Accountability) because you are in control of it,” she says. “You take care of it, and you know what you have. That’s not true when you are pulling company equipment.”

Not being hit with equipment violations and keeping a good CSA score makes the owner-operator a more attractive client for fleets, Wormley says. Also, leased owner-operators often are charged for using fleet trailers. The overall savings in equipment charges and fuel – coupled with a higher percentage of revenue or per-mile pay – are icing on the cake.

“Some independent contractors make more money with a trailer,” Amen says, “while buying a trailer bankrupts some if they haven’t properly thought through it.”

Overdrive research shows 93 percent of independent owner-operators own their own trailers, as do 48 percent of leased owner-operators.

Wormley paid cash – $15,000 – for a used van and expects to see a full return on her investment in less than three years. Though she is not running a lot of miles compared to the average owner-operator, Wormley has a dedicated route hauling windows between Iowa and Montana. She averages 45,000 to 50,000 pounds per haul, which helps her fuel mileage. “This is another plus of having your own trailer,” Wormley says. “It allows you more freedom to find the right loads and select the places you want to go to make the most money.”

Amen says a good rule of thumb for an owner-operator is to earn 1.5 times the investment. If the trailer costs $600 a month to finance, it should generate at least $900 a month in extra revenue “or it’s not worth the risk.”

Pros and cons of trailer ownership

Pros

• Increased revenue

• Confidence in condition of equipment

• Depreciation savings in first three years of ownership

• Opportunity to customize operation to fit your needs 

Cons

• Increased maintenance costs

• Increased administrative costs (insurance, plates, etc.)

• More responsibility for staying with load

• Possible reduction in total load miles due to less drop-and-hook 

Specialty applications, such as pneumatic trailers for fracking operations, oil field tankers, car haulers and heavy-haul trailers, are often a no-brainer for purchasing a trailer. “You can often bring capacity and special services to a market that will pay extra for it,” Amen says.

One drawback to buying a specialty trailer, he warns, is that “as that freight diminishes seasonally or economically, you are tied to that industry segment due to your specialized equipment.”

In general freight, also be cautious if a big part of your business relies on drop-and-hook operations. “The biggest pitfall is owning a trailer that hinders your productivity in a high-volume drop-and-hook segment of the industry – dry van and reefer,” Amen says. “You may have to wait hours to get your trailer unloaded, whereas if you were operating in a pool of trailers provided by a fleet or shipper, you can drop and hook in minutes and continue driving, which is what you get paid for.”

If they’re well maintained, it’s not uncommon for trailers to last more than 15 years, which makes buying used an attractive option for owner-operators looking for their first unit. “It is often best to buy a good used 5- to 10-year-old trailer so you can minimize upfront capital costs,” Amen says. “The exception is if you are in a specialty segment, such as reefer trailers that must be a certain EPA standard.”

Wormley bought a used trailer and added fuel-saving devices. “I’m very mechanically inclined, so I knew what I was looking for,” she says. “Still, I was dropped out on a hill with hundreds of used trailers to pick from, so you have to be careful when buying used.”

She doesn’t necessarily advise going the used route for first-time buyers – especially for those lacking a mechanical background. “I’ve never been a fan of financing, but with all the new regulations and the improvements with fuel-saving devices now offered on new trailers, I think if the fuel-saving and extra pay will pay for it, owner-operators absolutely should consider a new trailer.”

Tips for spec’ing a trailer

 

• MAKE SURE THE SPECS FIT YOUR APPLICATION. Look at the floor rating to determine if it works with the weight you are hauling. You also may need additional equipment that protects both tractor and trailer. The more frequently you load and unload, the higher your maintenance costs.
• CONSIDER VERSATILITY. If you choose a reefer, you have access to a larger pool of freight and often the potential for higher revenue; on the other hand, maintenance will be more expensive. Certain types of open-deck trailers accommodate more varieties of freight than others.
• BE AWARE OF CALIFORNIA REQUIREMENTS. If your business takes you to all 48 states and/or Canada, pay special attention to size, model, style and axle and suspension configuration. California has current and pending specific Air Resources Board regulations that pertain to trailers, such as SmartWay equipment requirements, age of trailer and mandates such as the distance from the kingpin to the rear axle. Also in California, refrigeration units must pass emissions testing, while van trailers must have certain aerodynamic equipment.
• MINIMIZE MAINTENANCE. Spec for long-life components such as brake linings, wheel ends and  coatings that reduce corrosion. Look for systems that eliminate wearable parts, such as puncture-guard trailer liners and axles integrated with the trailer beam.
• CHOOSE LIGHTER EQUIPMENT. A trailer built with weight-saving materials allows for extra payload. Even if you cube out, a lighter trailer cuts fuel costs. For every 300 pounds eliminated, the fuel savings is 0.2 percent.

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Dry van shipping is one of the most popular, reliable, and enduring shipping forms. Shippers choose dry van trailers because they protect freight from the elements, provide security, and offer versatility. But what is dry van trucking, when and why should you choose to offer dry van shipments, and what are the pros and cons?

We’ll start by defining what a dry van is.

What is a dry van?

A dry van trailer is essentially a box on wheels. Not temperature controlled, it’s specifically designed to handle dry freight rather than temperature-sensitive freight or “wet” goods. It carries boxed items, palleted materials, and most retail dry goods such as cereal, household supplies, and other non-perishables.

Dry van trucks are easy to secure. The fully enclosed space protects freight from the sun, rain, snow, and other elements. Because dry vans can haul so many different kinds of loads, more jobs are available in various shipping lanes.

Dry van trailer dimensions and weight capacity

Dry van trailers come in a few different sizes.

48- and 53-foot trailers

A dry van’s typical dimensions are 48- or 53-foot-long trailers. Most of these trailers are a maximum of 8.5 feet wide, 110” high, and can carry a legal maximum of 45,000 pounds with up to 26 pallet positions in the interior.

28-foot trailers

Besides the longer 48- and 53-foot trailers, there are also short 28-foot trailers. They are generally a little narrower and lower, with a maximum load capacity of 22,500 pounds. Sometimes you will see these shorter trailers in two or three trailer chains. These  “pup” trailers can typically accommodate 14 standard pallet positions.

Box trucks

By definition, many straight trucks or box trucks are also dry van trucks, but they primarily deliver local or short-range small cargo. Box trucks come in a variety of different sizes.

Does dry van shipping pay well?

Dry van trucking is the most common form of freight transportation and is almost always in high demand. While flatbed trucks may earn slightly more per load, dry van shipping does pay well, especially in crunch times when there is a capacity shortage due to high demand.

Dry van shipping rates are usually determined by five specific things:

• Supply and demand
• Delivery distance
• Freight type
• Weight, density, and freight shipping rates
• Fuel costs

Accessorial charges and extra services also add to the cost of what shippers pay.

Who uses dry van carriers?

Nearly all industries that produce or ship non-perishable goods use dry van carriers. Even companies who ship some perishable cargo like produce or frozen foods use dry vans for specific products. They can often be combined with other products in a single shipment or LTL shipments making this method exceptionally efficient.

Here are some common examples of dry van freight:

• Construction materials
• Retail products and dry goods
• Agriculture equipment and materials
• Automotive parts and service products
• Beer, wine, and spirits
• Publishing and printing, including paper, finished books, and equipment
• Oil and gas equipment and materials
• Healthcare equipment, personal protective equipment (PPE), and non-perishable goods and medicine

Many industries rely on dry goods shipping to get work done, like construction, publishing, and healthcare. Like retail and automotive outlets, others directly profit from the goods shipped in dry vans. They are, in turn, sold directly to customers or to wholesalers who then distribute them to retail outlets.

Efficiency and cost are some of the primary reasons these companies rely on shipping via dry vans to keep their supply chain moving But not all goods can be shipped this way. As with any shipping method, there are pros and cons.

Pros and cons of dry van shipping

While full truckload (FTL) and less than truckload (LTL) dry van shipping are the most common and affordable ways to ship goods, there are some disadvantages.

The advantages of dry van freight shipping include:

Affordability

Dry van trucking is more affordable than other shipping methods since they are readily available and generally do not require additional service charges.

Versatility

Dry vans can be used for a variety of goods, including consumer packaged goods (CPG), clothing, electronics, furniture, and machinery. You can also ship non-perishable food items and just about anything that will fit and doesn’t require temperature control.

Efficient

You can consolidate a variety of goods and materials into a single shipment, avoiding redundancy.

Fully enclosed

Unlike flatbeds and other trailers, dry vans trucks make it easy to secure goods and protect them from outside elements, damage, and theft. Your shipment remains locked tight inside until it reaches its destination.

Drop and hook options

Drop and hook options lets you drop an empty trailer and picking up a full one speeds up turnaround times and prevents wasted time at either end of your runs.

The disadvantages of dry van shipping include:

Capacity

There may be less capacity due to height, length, and weight constraints, especially in peak seasons. For example, if you need to ship significant volume during the holiday season. Advance planning will help assure the capacity is there to meet your demand.

Limited environmental control

There is less control over the environment inside the dry van. Bad weather will influence internal temperature control. If your freight requires temperature control, you are better off shipping with a reefer.

Flooring

Wooden flooring is more susceptible to damage from heavy items, those with some moisture (like produce), or weather at pick-up or drop-off points.

In some cases, dry van shipments might not be the best option. It’s essential to think about transportation logistics, including cargo, your lanes, weather, and other factors that come up on your route.

Frequently Asked Questions

Flatbed trucking is used for wide freight, oversized cargo, or heavy items that won’t fit into a container or on a pallet. Flatbed drivers also have to secure loads and may need to tarp items in transport. They also tend to drive more miles, so flatbed drivers typically get paid more.

The best place to find loads for your cargo van is using Truckstop Dry Van Load Board , which lists hundreds of thousands of dry van freight loads daily.

You can haul just about anything that will fit inside your dry van that isn’t perishable. You can haul consumer packaged goods, clothing, electronics, furniture, parts, and machinery.

Box trucks and dry vans are similar. In fact, box trucks can be dry vans. Dry vans are generally used for cargo that is too big for small box trucks and have lift gates for loading and unloading.

Use a dry van load board to find carriers and compare rates.

Finding dry van freight can be a cinch. One of the simplest ways is to find trusted brokers offering loads on a load board. Brokers use these platforms to find carriers to meet their specific needs. Staying loaded prevents deadhead runs and lost layover time, and keeps your dry van loaded and making you money.

Load boards help you find the best loads that keep you in your preferred lane and end as close as possible to where you will pick up your next load. The Truckstop.com Dry Van Load Board has verified loads from vetted brokers that keep your business making money whenever you’re on the road. Sign up today.