You Should Know Jack

Fleet ownership wasn’t initially the plan for Jack Webster, but when his son Richard was diagnosed with leukemia in 1991, he had to do something about spending more time at home. Webster had bought his first truck, a new Peterbilt, just two years before, and set his sights on making a solid living as an owner-operator contracted to Reimer Express Lines in his hometown of Winnipeg. He’d spent 11 years there as a company driver and soaked up the corporate culture, one steeped in family, safety, and customer service. Under the watchful eye of veteran Reimer driver Dick Friesen, he learned the value of doing the job properly, and safely.

But then his son got sick, and Webster concluded that buying more trucks and hiring more drivers would provide sufficient revenue to support the lifestyle change. And he was right: over the next 10 years, Webster amassed a fleet of seven trucks working at Reimer and other carriers before paring down to three units contracted to FedEx Ground out of Winnipeg, on dedicated runs to Toronto, Edmonton, and Grand Forks, N.D.

With only three trucks on the road — Pete 379s — you might not think the business needs much attention to the lifecycle of its trucks, but that attention to detail is what keeps Webster on top of the earnings heap. He’s experimenting with buying strategies now and taking full advantage of the cash flow that comes from his three trucks.

He didn’t always have that luxury: Webster asked his wife’s boss to co-sign a loan of $8,000 to top up the down payment on his first truck. “I had to finance the first truck over five years just like everyone else,” Webster says. “But I can afford to do things a bit differently now, and what a difference it’s made.”

To illustrate the positive effect that good cash flow and a business plan can have, here’s Webster’s buying strategy in a nutshell:

On each trade-in, he tries to keep the payments the same. Using the equity in the existing truck, he shortens the borrowing term by a few months each trade. The first truck was financed over 60 months, the next one at 54, the following truck at 48 months, then 42, and now he’s on a 24-month trade cycle. He uses the increased value of his slightly newer trade-ins to fatten the down-payment on the next one. Without spending any more money, Webster has managed to make substantial gains in the cash value of his rolling stock.

His strategy is to buy the first trucks of a new model year as soon as they become available. Last year, be bought two 2003-model trucks in July of 2002. When he deals them in July of 2004, he’ll be trading “one-model-year-old” trucks, with about 650,000 kilometres on them. “I usually have them pre-sold, or else I put them in the paper and they go away,” he says. “Those loaded premium trucks are selling for about $100,000 with a fair bit of warranty left on them.”

He takes care of the trucks, an ethic gained from his years at Reimer. To this day, Webster follows Reimer’s company maintenance procedures to the letter. “It’s all about getting the most out of your maintenance dollar, and Reimer’s already done all the homework. How can I go wrong following a successful plan like that?” He governs the trucks to travel at slightly more than 100 kilometres an hour, and, running in Northern Ontario, there’s not a lot of opportunity to really open them up. His idle time is close to nil (the trucks never stop), and Webster routinely posts fuel economy figures in the high sevens. Not bad for an outfit dragging A-trains over some pretty crummy roads.

His spec emphasizes driver comfort, sparing no expense in this area, saying it all comes back and then some in loyalty and productivity. The rest of the truck is spec’d for earning potential. He’s running a 470-horsepower Series 60, mated to a 13-speed, driven through 390 rears.

In the end, Webster says he can run a truck at a net cost of about $40,000 over two years. There’s interest and depreciation to factor in as well, but it boils down to a very manageable cost of about $2,000 per month for a brand new truck with full warranty — and few headaches — every two years.

Webster continues to eat up all the good advice he received over the years. He has managed his finances properly, executed a well thought-out tax planning and buying strategy. “We’re actually doing as well now with three trucks as I had done in the past with seven trucks,” he says, handing much of the credit to FedEx Ground, to his wife and business partner, Valerie, and to his hired drivers.

Webster’s son Richard, now 19, has made a full recovery from cancer, and he’s currently working toward an MBA. And Jack, now 46, is still at home, staying close to the office except for running the odd load for a driver who has booked some time off.

That’s how he likes it. His two daughters, Kaylea and Kari, aged 12 and 10, don’t quite understand the business of trucking, but do remember a dad who wasn’t home that much when they were young.

That’s all changed since he began managing rather than driving, and he’s working at keeping it that way. He has plans to grow his fleet, but says he won’t expand simply for the sake of expansion.

“I’m doing well with what I’ve got, and I’ll move forward if I can make this better,” he say. “Otherwise, what’s the point?”

What’s the point, indeed? Webster is in business for profit, he sticks to a plan, and he’s been successful — even when life has thrown him a curve.