Previously in this package: Truckers primarily capitalizing on profits in the ‘feast or famine’ segment of oilfield trucking.
All trucks in John McGee Trucking’s fleet are Macks, primarily daycabs. The fleet includes one sleeper truck with another on order, and tank trailers are sourced from Dragon Manufacturing, equipped with epoxy liners for rust protection. McGee opts for steel tanks instead of aluminum due to the rough oilfield road conditions.
Challenges of Entering the Oilfield Business
For independent operators or small fleet owners with no prior experience, entering the oilfield sector can be daunting. A crucial initial step is developing relationships to be recognized as an approved vendor for the desired customers.
John McGee’s Journey
John McGee initiated his oilfield career in 2004 by leasing to another carrier in northern Louisiana, where he assisted in running parts of the operation. By building relationships with clients during this time, he was able to maintain some of these connections when he launched his own business after the original owner sold it in 2011.
Advice from Experienced Operators
Clayton Driskill, an owner-operator with extensive experience in step deck transport for well-completion operations, recommends that new entrants should partner with an established oil-services hauler to gain the necessary experience and insight into the industry.
Payment Structures in the Oilfield
Unlike conventional trucking segments, payment terms in the oilfield are often 90 days, and McGee highlights that many companies will wait until the 89th day to remit payments. Thus, newcomers in the oilfield must ensure they have substantial cash reserves to sustain their operations until payments start to arrive.
The Importance of Cash Flow Management
According to Truett Novosad, owner of Equipment Express, managing cash flow is critical for oilfield operators. He emphasizes that while the potential rewards are high, the need for financial management over the typical 90-day payment period cannot be overstated.
Maximizing Revenue Potential
Driskill affirms that numerous opportunities exist for small owner-operators in the oilfield sector. By identifying their niche, they can achieve success. Frank Bowman, a frac sand hauler, echoes this sentiment, stating that hard work can yield significant revenue, with profits ranging from $300,000 to $350,000 per truck, with previous years seeing even greater returns.
