What's the minimum per day you would agree to with a high rail?

I dont know if I'm missing something obvious here, but maybe fill the other spots with stuff from load boards?

 

Sounds like you are getting into the same model I have been in for years, where you have regular work but not always truck load. As you know, I have to run my routes with the trucks every day, M-F, even if there is not a full truckload. Lately that has been the case more than the exception, but when times were good it was normal to "eat it" with the bigger picture in mind. Now, with a fleet of 5 units it is easier for me to accommodate this that a single truck O/O, but it is still hard, as the drivers have a minimum they are paid even if they sit at home, only fair way to keep great people on board.

When you are doing regular route work you need to look at the entire revenue stream, not just the individual trip or unit, meaning is the customer going to guarantee you enough volume over a period of time so that it averages out profitable? I know my per mile and per day revenue costs and targets and do my best to stay close to them, but I also look at my monthly and quarterly targets and as long as I hit them I will be fine. Example, September started out on fire, busiest I have been in months, but it has slowed down now, which I knew it would, and it will remain slow until November. This is just how my market cycles, I run out of sync with the new model introductions because I do a lot of fleet and lease work, the fleets get the early releases of the new models for beta testing and the consumer doesn't lease a lot of cars from now until the new year because they have Christmas, Thanksgiving, and other stuff to spend their money on.

All that to say, try to figure out what the minimum daily volume will be, in your question you asked about 2-5 cars, well obviously you will loose money on only two units but should be able to break even on 5 or 6 units, so try to set you rate to allow that to happen. Keep in mind,today you have to be competitive with the load boards, it is too easy for a shipper to get crazy rate comparisons in minutes from the boards. Little side rant, this is my biggest problem with the load boards, they do help fill in the empty spots but they also made it easy for lowballers to get freight and drive down the industry averages to a point where direct to carrier freight is suffering. Meaning, the shipper expects top notch service (as they should from a direct relationship) but at bargain basement luck of the draw load board rates.

Now, if this customer has steady work maybe you can interest them in a daily rate for dedicated use of your truck and services? Sure, some days you will feel like you got the short end of the stick after busting arse to build a 10/11 car load, but on the days you only move 3 or 4 units you will feel like a king. Bottom line, you have to make enough at the end of the week to pay the bills and most importantly, pay yourself! Also, if this will become a regular model for you, look hard at the reverse lane for freight. I have my primary lanes running from northern and central New York into one auction in southern New York, that is my bread and butter, but I also have two other auctions that I run a few units a day/week into from southern New York. I also picked up a few small used car dealers upstate that buy 1-3 units each from my primary auction, not a lot of volume and I do not promise them quick service, but an extra couple of hundred in revenue now and then helps a lot. This really makes the difference and increases the revenue per mile significantly even though it is not full truck loads. Now, it can be tough making the schedules work, I am fortunate enough to have a two car carrier to gather up the southern NY work and drop it at the same auction the trailers unload at, but it can be done by a single truck as well.

In summary, if your new customer can help you plan by providing their historical averages of volume by week or even month you will be better able to understand the whole picture as to what the account is worth. As long as you have an operating reserve so you can weather a bad week or better yet, bad month, this will work for you. The hardest part about having a dedicated customer that expects daily or weekly service is it becomes very difficult to fill in the gaps with load board work as you never know when they will call with extra work or need you to be there for a special project. You can't do that if you are tied up on a load board project, and in my case since I have to run the route daily and do not know my actual units assigned until about 18:00 each night I do not have the time to find work on the board and set it up properly, so I just roll the dice and run.

 

When you are running a daily or weekly dedicated route for a larger volume customer you do not usually have the flexibility built into your schedule to find, call, and complete load board work. Example, I run 5 trucks on routes that have to go every day, even if it is only a handful of units, but I do not get my exact unit assignments until 18:00 each night, so I do not have time to search and secure work on the load board, nor do I have time to call and verify the units to properly dispatch. Occasionally I can fill in the gaps with the board, but it is rare that the scheduling and locations will work out. That perhaps is the biggest difference between dedicated lanes/customers and irregular route work.

P.S., sometimes I get jealous of you guys that run the irregular work, I wish I could run hard for a few weeks then park for a week or two, can't do that with dedicated customers that expect their units to be moved within 24/48 hours of dispatch. I barely get to take a vacation, and I have to plan that around my historically slow times.

 

Is this like a dedicated account for you?

If so, and you really want to keep the business, you will have to learn that sometimes you have to bite the bullet on the onesy twosy units that HAVE to get moved for your customer.

Example, when we had the Ford account out of Phoenix. The furthest north dealer we had was Page Ford, up on the Utah border. They would order one maybe two a month. We had to try to run the Page with the furthest north traffic we had. There were times when I could not hold Page any longer and had to split with north Phoenix.
It is the cost of doing business.

Your situation will depend on how much that business means to you.

 

I guess each side has it's pros and cons. We only do irregular runs, pretty much chase the money within a 2000 mile area and it's nice to have the flexibility. The downside is as always, it's a luck of the draw type deal with freight coming out.
Just this week we hauled into Denver with the 7 car, got good rates going in, and rates about 30-40% less to come out. Granted, it evened out to be a decent run considering the time it took to get everything done, but I didn't find an order to fill the last spot until the day we were leaving lol.

I think I'd take the flexibility over the "stability" for now. Still working on building some relationships so that we can have a steady stream in case things slow down, but in some ways it's nice to decide if we're just gonna do mini-sub 500 mile runs a couple times for the week, or go OTR for a while.

 

The thing is, you will never know from one day to the next when that will happen. In the big picture, meaning juggling servicing the customer professionally whilst turning an acceptable profit, is just that, a big picture. To properly serve a dealership/dealer group you will have to bite the bullet some days. It all depends on how you want to grow your business. When you agree to srvice a customer on a dedicated basis, that means moving what they need moved. If your agreed rate is not what you think it is to facilitate 100% service, then this type of arrangement is probably not going to work out.