Own Authority VS lease...

Most brokers take 20% right off of the top. Good luck finding one that will advance any money. Some of the larger brokers will for a fee. Most will pay quickly for a percentage as well.

 

I ran my own authority for several years. I am now leased to a carrier and am very happy. I have less headache and don't work nearly as hard for the same money. I cut my truck and insurance costs by leasing. I wouldn't lease to run by the mile. I want a percentage and I want to pick my own freight, and that's what I do.

 

You can use a factor to get paid more quickly. You send youre invoices to a factor and for a small fee they will pay the invoices within 24hrs. G/man and others on this board are very knowlegable about this subject.

 

Your authority only costs $300 for the filing fee. You will need a minimum of $1 million auto liability and $100,000 cargo. Rates differ on the cost of insurance based upon type of freight, area you will run, credit history and mvr. You are probably looking at an annual premium of around $6,000-8,000. More specialized freight can run more. You can check with some insurance companies for actual rates. Keep in mind that rates can vary widely from one insurance company to another. Most will have a means of financing it with a good down payment. You can expect to need a down payment of 10-20%. You will also need a registered agent for all states in which you plan on running. OOIDA offers that service at no charge for members.

You will also need to buy your own base plates and permits. I would expect to pay between $1,500-2,200/yr. If you think you need to spend $30,000 for a trailer you must be planning on buying a reefer. There are some good used trailers on the market for less. You may also be able to get started by renting or leasing a trailer until you can afford to buy. You could probably do a lease purchase through a leasing company that might require a smaller down payment. I would be careful about having large payments. Anything can happen. If you have good credit you may be able to just do a monthly rental. I have known some who have started this way.

There are some opportunities for power only for those with their own authority. JB Hunt, PTL and others do have opportunities to pull their trailers. I spoke with an owner the other day who has been pulling JB Hunt trailers for a little over $1.70/mile with the fsc. Sometimes CH Robinson has power only opportunities for those with authority.

I would not worry too much about what the broker makes. If you can get the rate you want then it really should not make much difference what the broker makes. Everyone needs to make a profit. Brokers do provide a service. Some seem to take more than we may feel is fair, but much of that has to do with your negotiating skills.

If you don't have the resources to finance your business for a couple of months you could factor your receivables and have your money within a couple of days from the time you deliver the load and get the bills to the factor. Some brokers have quick pay and you can have your money within a couple of days as well, with a discount on the bills. Quick pay can take from about 1 1/2-8% of the rate. Some brokers will also advance money to established carriers for a fee. Some will advance up to 50% once the load has been picked up. Most will not advance funds until you have hauled a few loads for them.

You will need some money to fund your business. There are some items which will need to be paid up front. Authority, insurance and base plates must all be paid in order for you to get started. You can probably get most of the cost of insurance financed, but will still need to front some of the costs. For a down payment, authority and base plates, you are probably looking at about $4,000-5,000. That does not include the cost of buying or leasing a trailer or running money. It also takes about 4-6 weeks to get your authority once you apply.