Small Fleet Owner Shares Razor-Thin 3.7% Profit Margin in Freight Recession

Elite Commodity Express demonstrates the resilience of small fleets. By meticulously tracking expenses and optimizing efficiency, CEO Ted Johnson explains how the stay profitable.

Small Fleet Owner Shares Razor-Thin 3.7% Profit Margin in Freight Recession

Last week, we reported on the shutdown of a large trucking company and the impact of these closures on the overall freight market.

92-Year-Old Trucking Company Shuts Down
Arnold Transportation, a Texas trucking company, shuts down after nearly a century in business, filing for Chapter 7 bankruptcy liquidation.

However, data shows that many smaller fleets are managing to survive this freight recession. Despite fluctuating fuel prices, increasing maintenance costs, and squeezed profit margins, these smaller fleets are hanging on.

A recent post from the CEO of Elite Commodity Express out of Surprise, Nebraska, gives us a glimpse into how small carriers keep the wheels turning.

A Look at the Numbers

  • Maintenance: Costs $0.26/mile, accounting for about 11% of expenses.
  • Fuel: A big chunk at $0.75/mile, or 31.5% of total costs.
  • Insurance: Around $0.15/mile, roughly 6.4% of expenses.
  • Wages: Including drivers and staff, at $0.62/mile, or about 26.1%.

With January and April profitable, but losses in February and March, the fleet managed a slim 3.7% profit margin.

The company's Lost Fr8 profile indicates a fleet of 10 trucks and 12 reefers, showing its focus on specialized services in refrigerated freight.

Data Counts

According to CEO Ted Johnson, the company has maintained its financial stability through meticulous data tracking and comprehensive accounting practices.

Johnson emphasizes the importance of data-driven decision-making. He uses a specialized software, Profit Gauges, to meticulously track every expense and revenue stream.

Each expense—from fuel costs to maintenance bills—is entered into the software, allowing Johnson to generate accurate profit and loss reports.

This level of detail helps him understand the business's financial health and make informed decisions, which has been vital in navigating the market downturn.

Uber Freight's Senior Economist Mazen Danaf points out that Elite's reefer cost per mile is $2.38, and factoring in non-revenue miles, the cost per revenue mile (CPRM) is $2.80.

This exceeds both national spot and contract rates, making profitability extremely tough for carriers in this market.

No Small Matter

The success of Elite Commodity Express is a testament to the hustle and grit of small fleets in a turbulent freight market. Ted Johnson’s razor-sharp focus on his fleet’s numbers shows that even in tough times, you can stay in the game with the right playbook.

Keeping a tight handle on every expense and finding every possible efficiency has kept Elite Commodity Express moving forward, despite a market that’s trying to run smaller players off the road.

For small trucking companies looking to stay afloat, this is a prime example: the right mindset, relentless attention to detail, and knowing your numbers inside out will keep your trucks rolling, even when the industry’s on shaky ground.

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