Double Yellow's Company Driver to Independent Thread

So how are you going to find your freight?

If I heard one question more than any other, it was that. Do you remember the Keystone bitter beer face commercials? Whenever I replied "from load boards" I was immediately rewarded with a close cousin of the bitter beer face -- a variant I can best describe as "eww, you're making a big mistake, but I'm going to try to be supportive." I just soldiered on, content to know that some people make a living off the load boards and I ought to be able to keep my operating costs as low as anyone. Plus I had the notion that with my analytic abilities I should be able to quickly find above average lanes and maybe even learn to predict where to stage to take advantage of next week's hot market.

What products am I using? OOIDA's Member's Edge load board (powered by DAT). $45 with credit reporting and very basic rates & lanes. I'm now also using ITS with rate-mate ($70). DAT's load board is much more active, but ITS' Rate-mate is infinitely better than the Member's Edge rate feature. Rate-mate shows rates for the last 7, 15, 30, 90, & 365 days -- both posted and paid and both for the truck & the shipper (compared to only the last 90 days to the truck for DAT). As of the last couple of days, ITS also shows average outbound rates of your origin and destination cities from the load detail screen. I figure if I get just 1 load to pay $100 more, it's paid for the "extra" load board. So far it's been worthwhile.

During the weeks in which I was waiting for the California DMV, I was collecting a list of the largest brokerages and augmenting them with the most common smaller brokerages I would see in cities I thought I might be likely to go to. Some of the big ones that will work with new authorities: CH Robinson, Landstar, TQL, Coyote (requires authority be active for 1 month, which if you're dealing with CA, it will be), Hub Group, England Logistics, BNSF, & Allen Lund (requires 3 references). Get the carrier packets from these guys, fill them out, get a certificate of insurance from your agent('s secretary). You'll want to scan a copy of your certificate of authority, a generic certificate of insurance (to use on the road while waiting for a named certificate), a W9, proof of worker's comp (or if you are the sole employee -- a California exemption form), a voided check, and a copy of your cab card. You should also make a cheat sheet with your DOT#, MC#, CA#, VIN, license plate #s, your EIN, your DUNS #, your SCAC code, the name of the manager of your bank, its address, and phone/fax, and your insurance agent, their address, and phone/fax. Develop a system for doing this so it'll be second nature when in your sleeper. The best rates happen when loads need to pick up NOW -- you want to be able to read, fill out, and return a new carrier packet in 15 minutes.


Starting Out

So with that said, I started out on August 8th thinking that I would post my truck, make a few calls, and book a load right away (this is before I found out about the CARB changes). I would stay out a week or so, do a shakedown of the new to me equipment, and then come back home to do whatever work I felt needed to be addressed. I had already put a couple thousand into the tractor, the biggest ticket being a new 5th wheel (the old one was at the end of its adjustment range and 1.5 million miles is probably a good time to replace a 5th wheel). The trailer was pretty much untouched -- a couple lights, a cleaned ABS sensor, some DOT tape, and a jumbo box of crayola crayons to fill in the floor's daylight cracks -- and it was what I was really worried about.

Freight was supposedly good in California, but California is a big state and the Sacramento outbound market felt pretty soft on the phone. On top of that, I was a brand new authority. I knew rates coming into California are generally low (sometimes as low as $1/mi) so I had been counting on getting at least $2.50-$3 going out. Unfortunately, I was getting outbound quotes well under $2. The only $2+ quotes were going to places I knew to be dead zones like Montana.

I should back up and explain my strategy at this point in time...

"Sit on your hands..." -- Paul Jolly (my elementary school's chess teacher)

His goal was to get us to think 3 moves ahead, determine the best course of action, and only then touch a piece to make a move. My basic load board strategy was to see if I could get back home for at least a $1.75 loaded mile average (which should get me to my modest goal of around $1.60 all miles). To do that, I figured I'd need to use triangle routing (thinking 3 moves ahead). So when I see a load posted for $2.50 going to Billings, I immediately look at the rates coming out of Billings (they're LOLbad). Then I try to find a destination available from Billings that goes back to Sacramento (they all pretty much suck except from socal). I might even try to add a 4th leg in there. If I couldn't construct a profitable return in 3 or 4 trips, I wasn't interested in the lane.

This was the case for Montana, Idaho, and much of Oregon. And since I did not put down a $2,000 bond for Oregon's weight-distance permit, I was planning on staying at/under the 5 trips allowed under Oregon's trip permit system (where you call in and prepay for the miles you plan to run in the next week). That would also mean I would not have to try and file monthly mileage reports with Oregon.

Anyway, one triangle that stood out for a nice shakedown run was Sacramento to Phoenix ($2.20/mile for 750 miles) to Salt Lake City ($2.18 for 660 miles) to Sacramento ($1.38 for 640 miles). 2050 miles at an average rate of $1.94/mile. This compared to a simple Sacramento to Phoenix and back ($1.56 for 750 miles) for 1300 miles at a $1.88 average. Plus 2050 miles would be about right for 1 week in a new truck (I should have plenty of time to make temporary repairs, if needed, and still be on time).

So I start calling on loads heading to the Phoenix area. I ran into "sorry, you're too new" a couple of times, but mostly people were willing to work with me if I was willing to bend over and take it... Seriously I only had a handful of quotes over $2/mile and the market was soft enough they weren't interested in negotiating. I had gotten up at 5 am and by early afternoon I was ready to take a break. I'd basically worked a full day and had nothing to show for it.

I remember sinking into my recliner, sandwich in hand, half-listening to some daytime tv judge ranting about a lack of decorum, and thinking to myself "maybe those bitter beer face folks were right," when the phone rang. It was a big broker with whom I was already set up and who had a truck cancel on them and needed someone to pick up a load 30 miles away in 1 hour. I let them know I was nearby and I would commit to arrive in 90 minutes if the price was right. 3 picks, 1 drop, 810 total miles going to the Phoenix area -- we pretty quickly settled on $2100 (making me think I could have asked for more).


My first load

I headed to my truck, fueled & pre-tripped, and waited for the rate confirmation. And waited... I had planned on being at the shipper right at the appointment time and had only told the broker 90 minutes to give me some breathing room, but now I wasn't going to be able to meet the shipper's appointment time. Finally the rate confirmation came, I e-signed it, & emailed it back and headed to the shipper. I arrived 15 minutes after the appointment, but 15 minutes before my ETA, and the shipper wasn't terribly impressed. It was a food processing plant and I kept thinking "please don't reject my trailer, please don't reject my trailer." It was clean, dry, and free of holes, but, well, it is 16 years old with faded white paint and as a company driver I once had a shipper reject a nearly-new trailer because of a single pebble-sized piece of glass in the very front corner of a trailer (where a push broom couldn't reach).

The warehouse workers didn't even look twice and started loading me right away and I was out of there within an hour. I drove 45 miles to the next shipper and parked for the night. In the morning they too loaded me without a second thought and I began to relax... Until I went to close my left door and it went from "difficult" to nearly impossible now that the trailer had some weight in it. I struggled with it for 10 minutes before trying to slide the tandems, which somehow helped, and I was able to get the door closed. So much for maintaining a professional appearance...

The third pickup went smoothly, but again I really struggled with the left door. This time I at least pulled around the block and out of sight before attempting to close the doors. Try as I might, I could only get 1 of the 2 latches to close. I wound up zip-tieing the 2nd handle in a horizontal position that looked like it was closed, closed the right door (which further secured the left door) and then locked the 2 doors together. The product was strapped in, the doors were technically secure, but I was not happy with the setup. I'd need to get at least the left door replaced in Phoenix...

Worse, my air conditioning stopped working. It was 110 and rolling with windows down was not fun. And then came Tejon Pass. I should mention that my truck does not have an engine brake. Not that it doesn't work -- it was never equipped with one. I've always had an engine brake -- even when I was delivering furniture in box trucks. So this was going to be fun with 79,000lbs...

There is an old saying in trucking: "You can go downhill too slow a million times, but too fast only once..." I took it to heart and as I began descending down into the LA basin, flashers on, in 5th gear snub braking between 15-20mph. The truck speed limit was 35, but most drivers were considering that the minimum. A mile or so above Castaic I see a truck barreling down on me in the mirror and think "oh ####." It is blocked in by cars to its left and, despite seeing its nose dive under hard braking, I can tell it isn't going to slow in time. Just as I'm about to clutch in and head for the shoulder, I see him move to the right so I maintain course and watch as he flies by -- still going at least 35 with smoking brakes.

I pull in to Castaic just shaking and immediately put an engine brake retrofit on the to-do list... Aside from being miserable without A/C, the rest of the trip went without incident. I did get my first green light on the prepass and bypassed the open Arizona scales.

Once empty, I took a picture of the signed BOL, cropped it right on my smart phone, and attached it to an email I had previously saved as a draft with the rate confirmation & my invoice already attached. I've received a number of positive comments about this; by having my invoice & rate confirmation attached and saved as a draft email addressed to the broker's accounts payable department (and CC'ing the agent I've been working with), I can quickly take a picture of the BOL, crop it, and send the whole thing within 15 minutes of delivery. Most brokers are happy getting proof of delivery within 24 hours -- having everything in 15 minutes definitely makes a favorable impression. If the brokerage doesn't accept these documents via email, I just change the recipient to their fax # @efaxsend.com -- and they get a fax instead...

I then took truck & trailer to a shop recommended to me and had the AC fixed and asked to replace both doors. An A/C hose had failed draining the compressor's oil & ruining it -- ~$800. The shop said the door was still pretty decent in their opinion, and for $250 they would patch the bad wood, replace the hinge hardware, and realign the door. I deferred to their experience (and, while still taking a little effort, the door now closes each and every time).

While inexpensive, that shop did take 4 days for those (simple?) repairs so I had to abandon my triangle routing and look for a straight shot back home. Unfortunately, DAT rates don't have any sway in the real world and I was getting $600-$700 quotes to take 45,000lbs 750 miles. Ultimately I wound up deadheading to Las Vegas where I got a 400-mile $2/mile load to central California, and then deadheaded home. With the extra miles & all the deadheading, it still worked out to ~$1/mile, but losing 30cpm stings less than losing $1.30/mile. Besides, I got $2.60 going out, so it wasn't a total loss...

The truck went into a local shop for an engine brake retrofit, to have the bullgear checked/replaced, a new crank damper, a trolley valve installed, and to have air pressure gauges installed on the drive and trailer axles. I had originally planned on getting wide singles on truck & trailer right away, but decided that the above work was more important and put the wide singles on the back burner.

 

But what about getting paid?

Standard payment terms are 30 days from the receipt of your invoice & proof of delivery. That means at any given time I probably have $20-$30,000 in accounts receivable -- work I've already done, but for which I have yet to be paid. I've already paid for the fuel, the driver (myself), any maintenance and repair, insurance, tolls, permits, etc (this is also one more reason to focus on getting great fuel mileage). So you need a pretty good reserve of capital, or the ability to borrow at reasonable rates.

When you apply for your authority, your phone & mailbox will be bombarded by companies offering any number of services (many deceitfully so, making you think their advertisement is a government communication -- but those are mostly "compliance services"). The most prolific of these advertisers are factoring companies, a fact that should be your first red flag. For a fee, these companies will pay you immediately and then collect in 30 days from the shipper or broker. You get some money now, instead of more money later... Sounds like interest, right?

The payday loan and factoring industries get very defensive when you call their "flat fees" interest because doing so frames their "fees" in the context of APRs -- of 40-90%!


What is interest?

Would you rather have a bird in the hand, or 2 in the bush? Money now, or money later? Now, right? Interest is what makes a certain amount of money now equal to a larger amount of money later. It is the foundation of finance:

Present Value = Future Value / (1 + rate) ^ # of years

...which can be rearranged to solve for rate: r = ( FV / PV ) ^ ( 1 / Y ) - 1

So let's look at what happens when you pay a factor a 2.75% fee to have them take over $10,000 of your receivables. You get $9,725 now instead of $10,000 in one month. $275 -- that doesn't sound bad, right?

r = ( $10,000 / $9725 ) ^ ( 1 / (1/12) ) - 1
r = 39.74% apr

Now a factoring company will point out that they aren't loaning you money at a 40% rate, you're paying that one $275 fee only once. But are you? In one month, will you truly be in a different cash flow position than you are now? Be brutally honest with yourself and you'll realize probably not. That $9725 has been spent over the preceding month, you still have $20-30K in receivables and you need to put fuel in your tanks and replace a couple tires and pay yourself... So you continue to factor, paying $275 each month to have that money now. At the end of the year, you've paid $3300 in "fees" to have that $9725 in your bank.

Now just about everyone feels that carrying a balance on a credit card is bad, but just to show how much worse factoring is, let's look at what you would cost to put $9725 on a credit card at 15% interest: $1368

$3,300 vs $1368...


So would you ever factor?

As a means of financing? I can't imagine letting my business get in that bad of shape -- and if I did, factoring would only push it further into the death spiral.

Some aggressive businessmen can make the argument that factoring allows them to grow and expand their successful business more quickly than they otherwise could. They might be able to add another truck before a traditional lender would agree to additional financing... These folks "leverage" that capital in the hopes of becoming larger and making even more money. This is a proven method and I don't fault anyone who consciously uses factoring for this reason. It's too risky for my tastes -- these aggressive growth companies are among the first to go bust in a downturn, but some do become wildly successful. Risk vs reward...

The other "valid" reason to use factoring is if the factor assumes the risk of collecting from non-paying shippers/brokers (known as non-recourse factoring). I personally could see using factoring for this reason. For example, I had a broker offer me pretty decent dedicated run. $4,200 for a 1,870 mile round trip and, if I really hustled, I could squeeze in 2 turns most weeks. I just would not feel comfortable extending this one company ~$34,000 in credit (which is what I would be doing if I ran for them for a month). So if I had taken them up on their offer, I would have a) done an even more thorough credit check on them and b) probably mitigated some of my risk by using non-recourse lending.



A bit of trivia:

The origins of Benjamin Franklin's fortune can be traced to payday lending (he would loan beer money to his co-workers and then collect, with interest, on payday -- sometimes their entire salaries).

 

So how am I doing?

I wouldn't call myself an optimistic person, but when it comes to my business I always seem to think I'm doing better than I really am. I imagine this can be much worse for a natural optimist, so it is critical to stay on top of your numbers.

Still, I'm doing significantly better than my original business plan projections and it is clear to me that I'm doing better now than when I started. With that preface, I'll now open the kimono:

[TABLE]
[TR]
[TD][/TD]
[TD]Starting odometer[/TD]
[TD]loaded miles[/TD]
[TD]rate[/TD]
[TD]$/loaded mi[/TD]
[TD]$/all miles[/TD]
[/TR]
[TR]
[TD]Lodi to Phoenix[/TD]
[TD]1476240[/TD]
[TD]810[/TD]
[TD]$2,100.00[/TD]
[TD]$2.59[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]LV to Hanford[/TD]
[TD][/TD]
[TD]375[/TD]
[TD]$750.00[/TD]
[TD]$2.00[/TD]
[TD]$1.30[/TD]
[/TR]
[TR]
[TD]Corning to San Antonio[/TD]
[TD]1478424[/TD]
[TD]1850[/TD]
[TD]$3,248.25[/TD]
[TD]$1.76[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Ennis to Gering[/TD]
[TD][/TD]
[TD]997[/TD]
[TD]$2,450.00[/TD]
[TD]$2.46[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Platte to Jackson[/TD]
[TD][/TD]
[TD]786[/TD]
[TD]$1,500.00[/TD]
[TD]$1.91[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Jackson to Plainview[/TD]
[TD][/TD]
[TD]875[/TD]
[TD]$2,300.00[/TD]
[TD]$2.63[/TD]
[TD]$1.88[/TD]
[/TR]
[TR]
[TD]Las Cruces to Sparks[/TD]
[TD]1483471[/TD]
[TD]1129[/TD]
[TD]$2,200.00[/TD]
[TD]$1.95[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Stockton to Red Bluff[/TD]
[TD][/TD]
[TD]179[/TD]
[TD]$650.00[/TD]
[TD]$3.63[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Redding to Bellevue[/TD]
[TD][/TD]
[TD]597[/TD]
[TD]$1,600.00[/TD]
[TD]$2.68[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Kent to Davenport[/TD]
[TD][/TD]
[TD]2096[/TD]
[TD]$3,650.00[/TD]
[TD]$1.74[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Fort Madison to Houston[/TD]
[TD][/TD]
[TD]968[/TD]
[TD]$2,150.00[/TD]
[TD]$2.22[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Houston to Liberty[/TD]
[TD][/TD]
[TD]756[/TD]
[TD]$1,300.00[/TD]
[TD]$1.72[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]KC to Terrell[/TD]
[TD][/TD]
[TD]518[/TD]
[TD]$1,100.00[/TD]
[TD]$2.12[/TD]
[TD]$1.77[/TD]
[/TR]
[TR]
[TD]Irving to Roswell[/TD]
[TD]1490622[/TD]
[TD]486[/TD]
[TD]$1,325.00[/TD]
[TD]$2.73[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]El Paso to Yuma[/TD]
[TD][/TD]
[TD]557[/TD]
[TD]$1,325.00[/TD]
[TD]$2.38[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Tolleson to Ladson[/TD]
[TD][/TD]
[TD]2168[/TD]
[TD]$3,500.00[/TD]
[TD]$1.61[/TD]
[TD]$1.56[/TD]
[/TR]
[TR]
[TD]Clarkton to Flagstaff[/TD]
[TD]1494558[/TD]
[TD]2512[/TD]
[TD]$4,350.00[/TD]
[TD]$1.73[/TD]
[TD]$1.77[/TD]
[/TR]
[TR]
[TD]Flagstaff to Carson[/TD]
[TD]1497013[/TD]
[TD]497[/TD]
[TD]$650.00[/TD]
[TD]$1.31[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Commerce to Vacaville[/TD]
[TD][/TD]
[TD]408[/TD]
[TD]$950.00[/TD]
[TD]$2.33[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Selma to Walton[/TD]
[TD][/TD]
[TD]2274[/TD]
[TD]$4,750.00[/TD]
[TD]$2.09[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Nicholasville to Marlow[/TD]
[TD][/TD]
[TD]906[/TD]
[TD]$2,300.00[/TD]
[TD]$2.54[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]OKC to Rock Springs[/TD]
[TD][/TD]
[TD]965[/TD]
[TD]$3,000.00[/TD]
[TD]$3.11[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Rock Springs to OKC[/TD]
[TD][/TD]
[TD]965[/TD]
[TD]$1,200.00[/TD]
[TD]$1.24[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]OKC to Rock Springs[/TD]
[TD][/TD]
[TD]965[/TD]
[TD]$3,000.00[/TD]
[TD]$3.11[/TD]
[TD]$2.19[/TD]
[/TR]
[TR]
[TD][/TD]
[TD]1504242[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD]Average $/ loaded mile[/TD]
[TD]Average $/ all mile[/TD]
[/TR]
[TR]
[TD][/TD]
[TD]28002[/TD]
[TD]24639[/TD]
[TD]$51,348.25[/TD]
[TD]$2.08[/TD]
[TD]$1.83[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD][/TD]
[TD]Deadhead %[/TD]
[TD]13.65%[/TD]
[TD][/TD]
[TD][/TD]
[TD][/TD]
[/TR]
[/TABLE]

Fuel cost:
Miles: 27793
Cost: $12,619.69
Cost per mile: $0.454

Fixed costs for 6 months: ~$8,000
maintenance (mostly unrealized): $5,600
------------
net income over first 6 months: ~$25,125

Remember that the first 3 months I sat unproductive. If I look at the 3 months I was rolling, the net income was ~$29,125. That, I hope, will be closer to normal moving forward (well, for as long as this hot freight market holds out)...


Excuses for not doing better:

Corning to San Antonio: When I left off my narrative, I was going to have a significant chunk of work done (including retrofitting an engine brake). Well after 2 weeks, I pulled my truck out of shop #2 just disgusted at the lack of progress. A fan switch override had been installed -- that was the sum total of work that had been done. I did not even have a firm estimate for the engine brake. So I decided to go to the shop that the previous owner had used in San Antonio and, despite not being able to get ahold of the shop owner, I started looking for a load straight there. Irrational behavior was rewarded with predictable results -- a double-brokered load that paid poorly before I even counted the deadhead. When I was able to make contact with the shop owner, he didn't have an opening for a week so I wound up trucking on...

Las Cruces to Sparks: Loads back to California generally don't pay well, but this one seemed worth the 370-mile deadhead (it was also my first load requiring a vented van). It was either this 20K lb load of jalapenos or 40K lbs of stinky cow-hides out of Amarillo... Anyway, pick-up was first thing Thursday morning and delivery was set for Saturday morning -- plenty of time to poke along at a fuel-sipping 55mph... Well I make it a hundred miles down the road and the broker calls me frantic. The receiver had some major issue pop up at the warehouse and would have to close Saturday for emergency repairs. Could I be there before 530pm Friday? I ran the numbers in my head and figured that I could cruise at 68mph, stopping only for an 8 and a 2, and make it around 430pm. I would be deadheading home to Sacramento after delivery so I certainly didn't want to sit until Monday to deliver. "Sure." I told the broker. "Oh that's fantastic!" he said "thank you so much" and then hung up. About 10 miles later I'm thinking to myself -- WTF it wasn't my fault, why am I the one wasting fuel to get this done? I should have at least asked for an extra $200 to cover fuel. So I stewed in my stupidity for the next 1000 miles and, when I arrived, I discovered the warehouse had no emergency & that it is never open on Saturdays. The broker had F'd up, told some tale to cover it up, and ultimately I'd paid the price...

Tolleson to Ladson & Clarkton to Flagstaff: These loads (which were both multi-stop trips) don't look as profitable as the others at first glance, but I was experimenting with looking at revenue vs time instead of revenue vs miles. I set a goal of at least $1,000 revenue per productive day. A long run at $1.70 can easily do that. A short run at $3/mile might not. I'm still working out how to best balance these needs, but I am personally moving away from looking at revenue (and costs) on a pure mileage basis. Verbosity aside, I'm not ashamed of these runs...

Flagstaff to Carson: This lane is just terrible. I was looking to go home and I could get a $1-$1.30 load to Sacramento, or a $1-$1.30 load to LA & then a $2+ load to Sacramento... The later got the nod, especially since it was just a quick light load of empty beer kegs.

Rock Springs to OKC: This was a backhaul, plain and simple. I know many folks hate that term, but it loaded in the same dock to which I had just delivered, and delivered to the same dock from which I would take my next $3+ load... Round-trip was better than $2.20/mile (using a short-cut on country highways).


What have I learned so far?

Mondays, particularly Monday mornings, are generally not a good time to be looking for a load. Most everyone and their brother emptied over the weekend or first thing Monday morning so there tends to be a glut of trucks fighting over a fixed number of loads. I'd just assume take Mondays off instead of Saturday or Sunday...

Mid afternoons are good for rates, although limited in options. Be careful with time zones though, many east-coast brokers are closed when you're trying to get a 2pm load in Arizona.

Just because there are 6 loads per truck doesn't mean you can get $3/mile. The spot market suffers from anchoring. A lane that typically averages $1.20 won't rapidly come up over $2+ just because there is a temporary shortage of trucks. Brokers and shippers will balk until their loads start piling up and they NEED to move them. If they don't really care whether it goes out today, tomorrow, or next month, the rates will stay fairly low despite what appears to be high demand (example: Idaho potatoes).

The market does not appropriately value weight. I've mentioned this before, but a 10,000lb load should cost you 25% less in fuel than a 50,000lb load, yet they usually go for the same rate.

Listen to your intuition. If a broker gives me an uneasy feeling or strikes me as dishonest, move on (or charge enough to compensate).

Don't be afraid of small brokers. They often provide the best rates & service.

The market seems to over-value extra stops & driver assist loads. I look forward to these loads as they often turn a $1.80 lane into a $2.50 lane, but they don't tie up the truck for much more time.

The market seems to under-value grocery warehouse loads. Don't fall into this trap -- factor in your cost of waiting, dealing with lumpers, etc.


What I need to work on:

If you have taken any business classes in the last 25 years, you've probably heard of kaizen -- a term Toyota used to describe their philosophy of continuous improvement. It's just common sense, but sometimes we prefer to have an ivy league MBA wrap common sense up in the exotic before we take note. The most successful people & businesses are always striving to be even better. But where should you start?

Imagine a 2-mile NASCAR oval with 1/2 mile straights and 1/2 mile corners. Your car averages 210mph on the straights and 175mph in the turns (average speed 191mph) and you have the option to modify your car to get another 5mph in either the straights or the corners. Most people will choose to get more straightaway speed (new average speed 193mph), but you'd be even faster around the track if you improved your corner speed instead (194mph). A chain becomes stronger by improving its weakest link...

I could focus all my effort on further cutting costs -- increasing mpg's and decreasing overhead, but I'm already well above average in this regard. I'd be better served by working to improve my weaknesses -- the parts of the equation contributing to revenue. Now I'll still work to cut costs, but my focus needs to be on further increasing my revenue.

I need to do a better job looking for partial loads. These can be a nice boost to an already good load.

I need to grow a pair (see: Las Cruces to Sparks)

I need to fall out of love with round numbers. If a broker will pay $1050, they'll almost certainly pay $1066. $16 extra x 100 loads/year = $1,600...

Mainly I need to do a better job selling myself. I once had a broker ask "why so much?" when I quoted 10% over the market rate. I replied "uh, uh, because that's what rate-mate says this lane should pay." Broker then assumes control of the negotiation and inserts their superior knowledge saying "well that must be mistaken because I move it for this all the time." This exchange really grated on me over the next couple days -- as a new 1 truck operation running old equipment I came out of the gates feeling like I really didn't deserve market rate -- I should be a discount provider, right? Wrong. I was thinking about what I didn't have: a long history, a pretty truck, deep knowledge of the markets. What I needed to convey is what I can offer:


Why so much?

Because I am a one truck operation. Your load will be the entire focus of my business from the time it picks up to the time it delivers. Because I always arrive on time with a clean, swept-out trailer. Because I am a safe, conservative driver who takes 30mph corners at 25 & has never had a damage claim. Because when I'm faced with problems, I don't just throw up my hands and call in defeat -- I look for and find ways to get the job done anyway. Because I can communicate clearly in English. Because I'm quoting a simple flat rate. Because I'll submit my invoice and proof of delivery within minutes of delivery. Because I am the owner, the dispatcher, the csr, the driver -- you don't need to waste time on hold being transferred from department to department just to talk to the man who can help. I am the man who can help. Nor do you run the risk of having special instructions get muddled when the CSR gives them to the dispatcher who gives them to the driver. Because when you book with me, you don't have to give that load a second thought; you're free to focus on your other business.