Document outlines truck purchase vs. freight contractor considerations
Federal research agency Grains Research and Development Corporation (GRDC) has issued a Farm Business Fact Sheet for grain growers contemplating truck ownership.
The Should I own a truck fact sheet includes tables for estimating truck operating expenses for a low, medium and high capital investment, and for calculating total per kilometre loaded cost to compare with freight contracting rates.
“The fact sheet is a useful resource to help growers decide whether they should purchase a truck or use freight contractors,” GRDC grower relations manager south Randall Wilksch says.
“As a grain grower, I know the question around truck ownership can be complex, as so many factors need to be taken into account.
“The new fact sheet provides guidance as to what growers should consider when weighing up the pros and cons of purchasing a truck.”
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GRDC recommends that farmers: collate a list of the potential uses of a truck; estimate the amount of time it will be used and the distance it will travel per year; assess the financial costs/benefits; document the cost of employing a freight contractor to complete the listed tasks; Compare the full cost of purchasing a truck versus using a freight contractor.
Its five concluding points are:
- Document and assess potential use and tonnages to be carted to assist with a decision about if and what type of truck may fit your needs.
- To be similar to grain freight contract rates of $4.50 per km, a B-double truck worth approximately $300,000 needs to travel approximately 50,000km per year loaded.
- Financials, lifestyle and resourcing all need to be considered when making the decision.
- Carefully weigh up other, non-economic factors such as employment of a driver and waiting for a contractor.
- All machinery purchases should fit the whole farm production and labour plan.
The full document is available here.