Leased to a company vs. Own Authority?

You do realize that brokers will be taking 10 -25% off the top. You are not going to gain the full 28%.

If you go on your own it will be 100% live load and unload unless you provide a trailer pool.

 

There's good value in the right lease Landstar or otherwise. I know they get bashed for the cut they take but I also know contractors who are successful there and end up averaging the same or even more than many guys with their own authority. Which coupled with lower expenses, less paperwork, more than makes up for the cut. A friend of mine had his lease termed there several weeks ago for something minor yet he still talks good about them and talks of going back to them in another year. That said maybe if you manage money well and have the necessary capital or access to credit your own authority would be the way to go.

It's not for everyone. Some will say you need to move completely away from brokers under your own numbers which I think is counter productive. I believe a balanced mix of direct and brokered is the best. With the brokers you can always take advantage of market conditions whereas direct customers get miffed over such actions. Whatever you decide the most important impact on your profits is always going to be how poorly or well you determine the rates you're working for and how well you learn your lanes. The percentage that comes off the top from anyone you lease to is irrelevant if you are in full control of your operation.

 

A lot knock the % LS takes for doing what they do but they fail to realize its going to cost them $ to do it for themselves as well. I did my stint with LS was a good stepping stone to going out on my own .

 

I'll give you my take, as I've done both, just in reverse order. For a single truck operation, unless your doing a very tight niche operation, you are going to be better off leased to a carrier like Landstar. You get all of the benefits of your own authority without the downside. When you start adding drivers is where it gets trickier. LS sucks for getting driver approval in a timely basis. A potential hire could slip right through your hands when they take 3-4 weeks to vet them.
As far as LS percentage, brokers are going to take a good chunk that you will never see. That lucrative load will sell for the same as a normal load. CHRW's average margin, revenue vs. sales is 20%. Add in insurance which will be at least $500 a month more than you're paying for unladen now, quick pay/factor, load boards and credit services, establishing a fuel card with cost plus pricing, log auditing, etc. Landstar and the like look better and better.
To go on your own, my opinion is to specialize in a lane or region. Going gypsy will take much longer to establish relationships with brokers and shippers. Hiring drivers will be easier as approval is a call to your insurance, but subscribing to Hireright to easily do your own background check is essential, IMO.
If you think you want to ring some agents necks now, just wait till you're not on the same team.
I'm going to add a truck here at LS this year myself. Good luck.

 

Brokers will take 10% or more if you choose quick pay. If you ever decide to get your own customers you will have to wait to be paid unless you factor a load. You will alway pay some type of percentage unless you haul directly for a customer.

 

I wrestle with this question myself. Right now I feel like I'm not ready to run my own authority and the fact I am successful helps as well. I suppose I could be getting a bigger cut, but at this point as long as I'm turning te profit I set for myself to reach my needs than why change it?

 

Actually, . . Landstar is giving you 72% of their revenue, since it is their business and their freight you are hauling. You are not paying them 28% of anything. I understand what you are meaning but it is odd how people see things.

 

^ he's right. Add what Fortycalglock said.