No experience but getting Authority

I don't see a shortage of trucks. In fact, there seems to be more trucks on the road than ever. I also see plenty being advertised in the trucking papers. This is a highly competitive business.

 

If you get a load from a broker you'll be lucky to even get a percentage of the FSC . There is no regulation requiring carriers or brokers to give any part of the FSC to the person buying fuel .

 

It just seems that companies are paying more and more for drivers now that the freight economy is starting to get back on track. I am making 42cpm right now as a company driver, but only between 2000-2500 miles a week, this past week only got 1700. But I am home every weekend, which is something that is ok, but I would rather stay out over the weekend of a nice long run, which seems to be something lacking with this company. Every single load is 200-500 miles. I have only had 1 load over 450 miles.

I'd like to own my own truck because that way I could pretty much choose where I run.

I am really scared of going into this industry only to find out that I keep getting sucked into a hole where I keep taking $1.50 a mile runs.

If a broker says "This run (700 miles) is paying $1,000" and I say "Well I can't take that for less than $1300" and then the broker comes back and says "Well I guess you don't know ##### about the rates in this area, you're lucky to get $1,000" and then I say sorry, can't take it then, and hang up, then did I do the right thing or not? If I'm wrong, then I lose out, and then the broker thinks I'm an idiot newbie and then won't broker loads to me anymore. However, if $1,000 is a sucker price, and I take the load, then this broker is going to keep suckering me at every opportunity, and has no respect for me.

Is there a minimum I should take for ANY load from ANY area?

I'd like to be able to take loads that I can run with for more than half a day.
Spending 5-6 hours a day EVERY DAY being loaded and unloaded is really stressful. However, I've learned to manage my logbook quite nicely from this.

Maybe there's no definite answer for this, but I'd really like to be on my own authority sooner or later, and I need all the help I can get.

You've answered questions for me before, GMan, you're awesome. I just don't want to go on my own, and get stuck in this black hole where I'm barely able to feed myself.

 

EDIT: my 4y.o. daughter posting on my account. Sorry. I would delete the post if I knew how!

 

In this business it usually comes down to getting more miles or getting home. Some carriers can get drivers home most weekends, but it can be difficult, especially in a down economy. Taking short runs makes it much easier for carriers to get drivers home on as needed. Another reason some carriers do more short runs is because of the rates. Shorter runs tend to pay a higher rate than long runs.

It is true that when you own your own truck you can run where you want. It would be better to run where the rates and availability of freight is better. This is where many owner operators get into trouble. They take a load to an area that they want to see and never consider the freight in that area. They are then surprised when they need to sit for a few days to find a decent load or perhaps a load, period.

I don't typically take a load unless I get the rate that I want. I called on some loads this last week that paid less than $2/mile to go to New England. I told them my rate for that area. Sometimes, they will come back with a better rate, other times they find someone willing to haul for any rate to keep the wheels turning. It is the carrier who determines or sets the rates, whether some want to admit it or not. A low rate will be offered by a broker or shipper. The rate will rise until someone takes the load. When the load is booked, the rate is set. When the next carrier comes along the broker or shipper will attempt to get him to take the load at the same rate. Since one carrier took it load at a certain rate, they know that someone else will probably take the next load at the same rate. Smart carriers and owner operators know when to walk away.

I would not worry about what a broker thinks of you. They will know that you are a newbie when you open your mouth. They can also easily check your MC number and see how long that you have been in business. I have had brokers call with a cheap load, I turn them down and they call at a later date with a decent rate. They are in business. Most don't take it personally when you turn down a load. They understand that it is a matter of calling enough trucks until they book their load. I won't tell you the minimum rate that you should receive to haul out of any area. That is a decision that only you can make. I will tell you one thing, however. I won't take any load where I don't cover my expenses and have at least some profit left over. You may be able to make some money at $1.50/mile, if you drive the truck yourself and keep expenses low. Some may need $2/mile. It is all relative to your expenses and business model. Some expect to have a certain margin of profit. For instance, if you want to have a 25% profit and your operating expenses are $1.25, then your minimum haul rate should be at least $1.67/mile. ($1.67*.75=$1.25).

There are a couple of ways carriers look at rates. The most common is rate averaging. For instance, you know that you are going to a bad freight area but have a load that pays $2.50/mile going in. Coming out you can only find a load paying $1.25/mile. Your average rate is $1.75/mile for the turn. Personally, I prefer getting a minimum rate no matter where I go. Some of us know that as long as carriers and owner operators keep taking the cheap loads that rates will remain low in those areas. That attitude has served me well over the years. Those who subscribe to the other point of view have also made a success from their business model. I prefer my method.

This is a business. Too many new people seem to forget that this is a business. When they buy a truck they still consider themselves to be a truckdriver. They are actually a businessman who happens to drive a truck. There is a big difference and you can tell who has each attitude by the way they run their businesses and the rates they achieve.

I think that many inexperienced owner operators should lease to a carrier before getting their authority. It will help you to learn how to manage your business and still not be going it alone. Some feel much more comfortable having a big company behind them. There is nothing wrong with leasing to a carrier. I have known some owner operators who make more money leasing than they did running their own authority. The objective is to make money.

 

Does it really matter?!? You negotiate a rate that YOU are willing to haul the load for. Ever try negotiating with a broker while rolling down the road and they are giving you the rates plus FSC per mile? I want to say “shut up and give me the rate all in”.

FSC is designed to allow you to give a contract rate and make sure that in 6-months you are not loosing money because fuel has gone through the roof. In the spot market it is meaningless.

 

It seems the only ones that take it personally are the kids right our of college at CHR. They want to argue that you can run your truck for $1.20/mile. OK, maybe I can run it for that but then I'm not making money.

 

So I'm getting the idea that over time you build good, balanced business relationships with certain brokers where each side works with the other to make each other successful.

I've been trying to figure out where the good/bad areas for freight are. In my experience, places like Ohio, Indiana, Illinois, especially Chicago are all full of freight. That probably means higher rates going out, but cheaper rates going in? Places like W. Virginia where there is hardly any freight, probably good rates going in, bad rates going out, as there are probably more trucks than are needed? I read somewhere in these forums that westbound loads into Memphis are very cheap rates - like 80-90 cpm avg. That isn't even profitable.

And I guess Florida hardly has dryvan freight going out, no manufacturing down there, so cheap rates going out, better rates going in.

If this is inaccurate, please tell me.

I don't really know about New England, except for NJ, NY, PA, hardly have ever gone into CT or MA, or ME, NH, etc. I have never been to the North West either, have been to NM and AZ a couple of times, I love it there. I've also been to CA but I don't plan on going there at all.

I guess my ideal would be to go out to NM, AZ, or west TX and try to meander my way back towards home in MI.

I think that if I can average $1.80-$1.90 per loaded mile, I would be able to make some decent money. Since I'm making 42cpm with my current job right now, I would have to profit more than that much being an O/O to even make it close to worth taking on all the risk myself.

Is it out of the question to think I can average $1.80/loaded mile over the course of a year?

I look on Craigslist in the Transportation Jobs section in Detroit, and there are companies looking for O/O for dedicated accounts and other OTR stuff that are paying $1.20-$1.40 per mile. I think with brokers, you negotiate a set flat fee and not a rate per mile basis, but on these Craigslist ads, they are offering O/O a rate per mile, the $1.20-$1.40, I'm wondering if that is already implying that a FSC would be added to that, because I don't see how anyone can profit by running at $1.20-$1.40 / mile on a dedicated account.

Thanks for the replies so far. I wish I could like go to your trucks and just sit down with yall for a couple hours and just learn everything you know. Knowledge is priceless, and without cost here. Thanks

 

For the most part, if you want to haul the best paying freight you need to stay east of I-35, South of I-80, west of I-95 and north of I-10. If you pull a reefer, then you may need to go to California to get some of the better paying produce loads. South Texas, New Mexico, Arizona and follow the produce up the coast to Washington to come back east. Go out when produce isn't moving and you will find it difficult to find freight out of those areas. I have a friend who pulls a van with his own authority. He usually doesn't go further south than Tennessee and North Carolina. He stays between Pennsylvania and Illinois. In fact, he does a lot of Ohio.

You may gross more money running the long miles to California, New Mexiso and Arizona, but that isn't where the money is in this business. You can haul onions starting in south Texas and go up the west coast. Rates going out will be lousy.

If you want to run in NM, AR, and TX as you stated, you can expect low rates and time sitting. You can get freight out of north New Mexico about 6 weeks out of the year with a van, reefer or side kit. There is some freight coming out of certain areas, but rates are going to be cheap for the most part. If you want to see the country, then you can go to those areas. If you want to make money, then you need to stay in the areas that I noted above.

You don't make money running a lot of miles. You can turn money and generate a lot of revenue running miles, but it is what you stick in your pocket at the end of the week that is what is important. For the most part, if you want to run in those areas you mentioned, you are probably looking at rates in that $1.20-1.35/mile range.

 

True, but you're both trying to squeeze a buck out of the load and you're the one with everything to lose. I have brokers that I like, but I trust them as far as I can throw them.

Now you're getting to that part where you don't know what you don't know, and the advice on specific rates here is not going to help you. cpm is not the only measure that determines whether a load is worth taking or not, and those variables change by the day, sometimes by the hour. You won't be able to fathom a guess until you get out there and figure it out. To make it even more difficult, you'll have different challenges in your first month than you have after the first year. You have to stay on top of (your) trends and correct/adapt.

Whatever you're putting on the back of your truck has buyers and sellers somewhere. True, some areas are prone to production, others to consumption. The commodities you are loading will dictate whether those regions are good or not. For example, the generalization about FL are correct if you are exclusively loading off of load boards. A guy with a dedicated shipper account in FL may see things differently.

Sure you can. As mentioned earlier, cpm is a strong indicator, but is not the end all, be all to whether you can operate profitably. Same thing could be said about your current job. 42¢/mi is a strong sounding number. But it's just a number that could be good or bad considering the bigger picture. The one truth is that you will always be limited to 42¢ and fully dependent upon your boss for any upside. As an o/o under a lease you get more control with more upside possible, running with your own authority it's all you. Nothing ventured, nothing gained.

Call and ask. If something isn't mentioned, it doesn't imply anything but that it probably isn't there. $1.20-1.40 could be ok given the right circumstances. The chances of you making it work walking in are highly unlikely. There's a few leased on o/o I've seen here that do good, but it didn't happen overnight and not from a craigslist ad. They know their market and know how to make their deal work.

Don't forget - if all this free advice doesn't work, you're eligible for a full refund.