30 ton of iron, 1000 miles

I got a call from my favorite machine shop the other day. I hadn't heard from them since last fall. Usually they call me about every 3 months give or take a month. So I was relieved when they called because I thought they had maybe hauled their scrap in themselves (which they sometimes do) or found somebody else to buy their scrap.

Well, I rolled in this morning and found what I estimate to be about 30 ton of very nice (short) iron.

They had been holding on to it hoping scrap iron prices would come back around. I had no idea they watched the scrap markets. I always thought they just called me when their bins were full. Apparently, they finally ran out of bins.

So the guy who I deal with and who loads me up comes right out and says: “What are you going to charge me to get rid of all this?” I nodded my head and said something to the effect of “Yeah, it's getting ugly out there.” We BS'ed a bit more about the Chinese, then fishing and whatnot.

It's a 180 mile round trip to the machine shop and back to the scrap yard of choice. That probably sounds strange to you guys and gals in urban areas, but living in a rural state that's the way it is.

So I got 2 trips back and fourth in today. I can do 5 ton at a time, figure I have 4 trips left.

Getting (and I am very thankful) $55/ton. Cost me today $58 in fuel per round trip. That was bucking a hell of a headwind on the way back to the yard, but a sweet tail wind on the way down.

Doing the math, about 1 ton goes toward fuel. The remaining 4 ton is: $55 X 4 = $220.

It's a lot of wear and tear especially on my trailer tires making 6 trips and 1000 miles on truck and trailer, but my conclusion is NO, I am not going to CHARGE them to pick up 30 ton of iron. But, they are not going to get paid either. It's a wash.

30 X $55 = $1650. If I charged mileage .55 (is that the going rate?) X 1,000 miles would be $550. Should be more pulling a trailer I guess. So, even at the conservative estimate of $550 for mileage, if you subtract that from $1650, you get $1,100. $1,100 for 3 days work comes to $366/day.

I can live with that. If you are self employed you know that ain't much, but this has been a great client to my brother, and now me during the good times and now the bad times too. I don't want to lose them.

Yes, pulling a trailer mileage should probably be $1/mile, which would make this a loser on my part. But like I said, great client when things are good.

Thoughts?

Not only do you make some coin.. you'll have a client for LIFE! You did right by them.. when steel does come back.. You'll be making a killing with a client like that.. and they WILL NOT forget that you didn't charge them to remove it!

Sledge is absolutely right. I tend to think the IRS deduction is a little high for many vehicles- on business, a family member made $300 profit going to a business meeting with the IRS numbers. My trucks can't really depreciate any more....

You just made someone's day by not charging. They'll be very happy, and I'd bet that they'll call sooner....

Originally Posted by scrapGAME

I disagree --------------- I would have charged HIM ------- NO loyalty in the Scrap Biz -- NONE --- im always grateful for doing a good deed but if the prices were close to 250 - 300 per ton 1. he would have scrap yards and metal haulers offering him 50% on the dollar to pick it up at his location ------ Business is Business

I would tend to disagree scrapGAME. When scrap iron prices where up in the $220 range (highest I saw around here) I heard rumors that there were other haulers sniffing around my machine shop. I paid them good at that time, and they stayed loyal to me. Now when the markets are down, I'm staying loyal to them. So there is some loyalty in the scrap biz.

On a side note, they pulled 1250lbs. of stainless steel out of one of their warehouses, which sweetened the deal quite a bit.

Congrats Pjost, you played your cards perfectly. The only thing that could sweeten the deal is buying the wife some flowers as a gift. Then she would be another voice in his head saying you are a good guy and they need to keep you on their good side. Just an idea.