New to the game

Do you want to be in the business of brokering or in the business of trucking or both? You don't need to be a broker to get loads directly from customers. And if you are going to get loads from other brokerage houses, when you call up as a broker now you're double brokering the freight for no reason if you are putting it on your own truck anyway.

 

1) Do you have any basic idea of how to operate a business?
2) Do you have any start-up capital? (if you're going to depend on factoring from the start, you've already failed)

 

I think the first thing is you need to understand what the different terminology is.

If you have your Trucking Authority ( hat means you are a motor carrier) you can go directly to whoever you want and get direct freight. You do not need any brokerage license to do that.

If you have a lot of freight you can lease other trucks on under your Authority that will only work the freight that you have from these Direct people that you're working for. You need to have enough Freight to keep them working everyday. You also have to be able to handle all of the billing and paying them and whatever other paperwork Etc that has to be done.

Being a brokerage is different. What Brokers do is go into a company somewhere like let's just pick a place like let's say Nestle, and Nestle says they have to move 500 loads a week so they need a broker that can find all the trucks to haul for them. Then as a broker you legally Broker freight to whoever wants to haul it.

The Brokerage business is incredibly competitive and it's very difficult to break into that. Not impossible but The Story Goes if you want to be a broker you'll probably spend 6 months to a year doing nothing but making phone calls and mostly getting rejected.

As far as payments go, if you have your Trucking Authority you're going to be on whatever terms you can work out with them but it's going to be 30 days 60 days 90 days something like that. Generally 30 to 60 days is probably more than Norm but there are some people that will be slow pay whatever. That payment cycle also applies to brokerage.

So if you were Brokering freight you're going to pay the carriers way before you collect from your shippers. Brokerages require a lot of cash flow and even if you don't get paid you still have to pay the carriers. The Brokerage also requires a $75,000 Bond.

It's much simpler to just have your trucking Authority and haul your own freight, but you still have to be able to carry yourself and until you get paid from whatever loads that you haul.

Factoring is expensive, there's a lot of legal mumbo jumbo that you may find it difficult to get out of it when you choose to, and there's a lot of very fine print that you have to read because there's more that goes along with it than just them handing you money.

I'm not discouraging you but you sound as though you have a lot to learn, so I would advise you before you enter into this or figure what you're final plan will be, that you do as much research as you can.

If you ask the right questions I'm sure there are plenty of people on the site that have plenty of experience that will try to help you however they can.

 

Freight volume is on the floor.
Good luck getting shippers not hanging up on you in the first 5 seconds.

 

Good luck on finding shippers, unless you know someone.
You are competing agains all the big boys with their slick professional sales people plus all the others. Shipper I worked with for years would not answer his office phone, only his cell that only people that needed the number got it.
Are you buying a hot shot because of driver’s license or because of easy financing of a Dodge pickup? Starting out $100k in debt is a bad way to begin.

 

^^ This is the part I feel most start-ups do not fully understand. Even if you are making good money, much remains on the receivables list for 30 plus day and your daily/weekly expenses continue. Many smaller carriers and start ups run to the mailbox everyday.