Percent pay @ Landstar vs Schneider Choice

A whole two bucks running your own authority, WOW!!! How long does it take these days and what does it cost now, to take a pay cut like that?

 

Why do I pay 26.5% of the linehaul to LS? It could be because unless you are pulling shipper direct freight, it costs about 20% to the broker and another 13% of that for leasing to BBB, for a total of 30.4%. After that 26.5% I have no other charges as they are paid for by LS from their 26.5%, like public liability and cargo insurances, etc. Then add to my little old 73.5% the fuel surcharges and accessorial charges I receive and I'm up in the 80% area.
Now, if you prefer to get 69.5 cents of every dollar with more expense, instead of close to 80 cents of every dollar with fewer expenses, more power to ya.

 

So let me get this straight if a load is offerd at $1,000 dollars (total) let's see I would get $1,000 and you would get $735 .... Please don't be fooled by fsc most companies say well flatbed freight is paying $.63 fsc (example) same load is 435 miles so Landstar will tell you it's $725.95 Linehaul and $274.05 fsc, that's how they break it down trust and believe you won't get $1,000 plus $274.05 fsc. You are paying Landstar 26.5% for their brokerage, water bill, lights, gas, company jet, corporate charge cards, and trick bill.

I am not leased to Bill, I run my own authority so that additional 13% you speak of is a non factor. If you see a load at $1,000 it may be offered to me at $900...that's still more than $735 so say we both do 5 loads per week that is a difference of $825 ( 900-735 x 5) that you are paying to Landstar to cover your public liability and cargo insurances, my cost is $385 a MONTH. So it's 2,175 miles and just say avg 5 mpg so that's 435gl if you get what $.20 fuel discount that's $87 and in my funny math I am still ahead..

I am not against leasing to a company and I don't want to make this into a pissing contest in what is better. My point is if being at Landstar is EXACTLY like running under your own authority why do it? I feel like it is hiring a lawn service to cut your grass when you have a brand new mower in the shed.

 

If you pull a brokered load for Kaplan you are pulling it for the same price their O/O are pulling it for...sometimes less depending on the agent. I use to be leased with Kaplan, know a few guys that are still with them, and brokered loads from them when I went hauling machinery and the rates were the same leased and brokered. I will say they are a decent company once you figure out which agents are good.

As for SNI. The last I knew they would take a O/O as long as their MVR is clean, truck will pass annual inspection, driver pass testing during orientation, and a couple of small quirks with truck restriction (fifth wheel height, weight, and wheel base). These were the standard for the typical line haul SNI dispatched trucks. Now if you wanted the Choice Program you had to have at least 1 year of O/O experience added to the requirements.

 

No, if the load pays LS $1000, it goes to you at $800, flat rate and to me at $735 plus fsc and any accessorials. Depending on the fsc and accessorials, the money to me may well be over the $800 to you, the broker carrier.
The advantage an Independent Motor Carrier has over me, is when dealing with a direct customer. When dealing with a direct customer you get 100% of the freight bill, I still get my percentages. When dealing with a broker, an Independent only gets a percentage of the freight bill.
Contrary to popular belief, brokers are not non-profit organizations, they do not pass along 100% of the freight bill from the shipper, but generally only about 80%. Some pass along a little more, some pass along a lot less as much as 50% off the top.

 

If you are leased to Bill at 87%, he is getting 13% off the top of any freight bills run through his authority, which is fair. Nothing wrong with that. On any direct freight, that is only 13 cents of every dollar. However, if that freight is coming from brokers, the broker is getting their percentage, generally 18 to 20%, off the top of the freight bill, before Bill gets his 13%. I face the same thing here at LS.
Here's a breakdown.
Bill books a load from a direct account for $1.00 deducts his 13% or 13 cents, this leaves you with 87 cents.

LS books a load from one of their direct accounts for $1.00, then brokers it to Bill at 80%, 80 cents. Bill then turns the load to you after deducting his 13% of the 80 cents he recieved, 10.4 cents, leaving you with 69.6 cents.

As to fuel discounts, I'm sure Bill has negotiated the best discounts he can. However, the fact remains that Bill is a small fleet and doesn't have the buying power or clout of a fleet with 8000 trucks. In this case, size does matter. I fueled at the TA in Laredo on Tuesday and got over 44 cents off of the cash price. Can Bill get that much off with his discount program?

Not knocking Bill, but I would want to know how much of his freight is shipper direct, as opposed to brokered.
It's not the percentages that count so much as what gross rate those percentages are based on.

 

He is paying you 87% of what he receives, not what the broker receives. You never see the broker's fee, because it came out of the money, before you get it.

He charges you a factoring fee? For what? If you are leased to him, running under his authority, he MUST pay you within 15 days of him receiving your paperwork, BY LAW!!! It doesn't matter when he recieves payment for the load, he still has to pay you in the prescribed time, if you are running under his authority and MC number.

http://www.fmcsa.dot.gov/rules-regulations/administration/fmcsr/fmcsrruletext.aspx?reg=376.12

(f) Payment period. The lease shall specify that payment to the lessor shall be made within 15 days after submission of the necessary delivery documents and other paperwork concerning a trip in the service of the authorized carrier. The paperwork required before the lessor can receive payment is limited to log books required by the Department of Transportation and those documents necessary for the authorized carrier to secure payment from the shipper. In addition, the lease may provide that, upon termination of the lease agreement, as a condition precedent to payment, the lessor shall remove all identification devices of the authorized carrier and, except in the case of identification painted directly on equipment, return them to the carrier. If the identification device has been lost or stolen, a letter certifying its removal will satisfy this requirement. Until this requirement is complied with, the carrier may withhold final payment. The authorized carrier may require the submission of additional documents by the lessor but not as a prerequisite to payment. Payment to the lessor shall not be made contingent upon submission of a bill of lading to which no exceptions have been taken. The authorized carrier shall not set time limits for the submission by the lessor of required delivery documents and other paperwork.