I desperately need some good thoughts....

[Eurocat]

Sorry to hear about your situation.
I have an accounting background, so just like to leave you with a couple of thoughts:
- for a "healthy" business to run a specific policy (outside of workers comp and others not related to auto/truck insurance) at the rate you described (aprx 40K) for regular rate, it should be grossing enough to be able to take on the increase. Therefore, you probably have other causes that are making run with such a thin margin. This should be looked a from an accounting perspective and you might need to reevaluate the business model for overall performance and efficiency.
- Tax write offs. Well, insurance, like any most other business related expenses is tax deductible. I am probably not giving anyone any news, but if this will put you in the red, you will have no tax liability once the fiscal year is closed out. Since I do not know if you declared a profit or a loss the last cycle, I do not know if there is anything to consider here.
- Also, the structure of the company can or not allow you take out a salary and still be able to declare a loss both on the business and personal. (depending on the numbers you might have a business loss and still have to pay personal taxes).

All this should be taken into account if you are running that close or borderline over the red.
Just as an example, i used to purchase most household items that could be classified as tax deductible under the business in order to reduce the "profits" shown. Even items like paper towels, toilet paper, printer ink and paper, etc... can be easily declare under the business and there is no way to track where exactly they are being used. The list is enormous and most ppl don't understand the impact 50 or so items can have at the end of the year in what you get to keep from your business (or not).

A tax attorney can help you both ways, and a good one should be able to dissect your business and let you know if there is anything you should look at.

good luck.

 

[Englewoodcowboy]

Thanks for the insight but I will tell you if you have not dealt with a trucking company, you can pretty much throw everything out the window when comparing to other businesses, the only thing in common from a trucking company to any other business is it is called a business. My normal insurance runs me 40K, between equipment expenses etc. we are above a break even point. Not too many small trucking companies with new equipment or loans like I have operate at much more than a 1% margin in this slack economy. In 08 we did a lot better, running about a 12% margin and oil based products were relatively affordable, tires cost about 250 ea and fuel was 42% of my expense. Now with todays inflations, rates remaining relatively the same as they were in 08 less the variable fuel surcharge we operate at much tighter margins. Tires today cost 500 ea for singles and the wide based tires are 1K ea. Fuel is now 68% of my costs yet my fleet MPG average in 08 was 5.4 mpg, today with the new equipment I am holding a very strong 6.9 mpg. I have accepted that until the market swings, wich it is finally starting to do and rates are starting to move we would be stuck at a low margin. What is hurting me is we are gong from 40K a year insurance to 100K a year. I could swing it but then it puts me in a position where a single major breakdown would put me out.

On the bright side, I have finally formulated a plan and all things and research are showing this plan is very viable, only time will tell and I am about 4 weeks out from it going active. It has taken a lot of worry off of me now that I have some solid information and a plan of attack formulated. All I can say is fingers are crossed that all goes well and I can execute what I have come up with. If that happens I should be in much better shape. Some other opportunities have als presented themselves in this time that I am also exploring for my other company. I have een through 2 years of real shit luck and I am hoping this little glimpse of good luck I am getting becomes a trend, I certainly could use it. These opportunities always open up options and one was to cull a bad positioned employee and I have 2 hungry prospects wanting to take his place. I also have built in some time to plan everything and the panick of no time to do things right and carefully has come to pass. Thank you all for your best wishes, I believe it is working.

 

[Eurocat]

That is great news. I am really glad it's looking up for you.
Our company has a private fleet of 6 trucks, but about 30% of the business we do is picked up by customer transport so we don't account for that. We have at times had to add temporary fuel surcharges, and every company we sub for longer hauls has also had fuel surcharges built in that vary depending on what is happening with diesel. Needless to say that we are obviously running better margins since diesel dropped about 2 years ago. But overall trucking only comprises 5% of our overall expenses, so I cannot say we must keep an extreme close eye one it. The salaries of drivers, helpers and warehouse related employees has been our major increase. It has been largely offset by the falling Euro, therefore we operate with an 8% better margin that we did 2 years ago.

We do have a VA based trucking company that often comes into our warehouse to pickup, along with several other stops and shoots back down. Do you do any interstate or it's just local?

 

[dansshin]

@Englewoodcowboy Hang in there and wish you all the best of luck!