So you want to "own " your own company

I have NEVER hauled freight cheap whether my equipment was paid for or not. It should not make any difference if your equipment is free and clear or you owe money. It will need to be replaced at some point and if you are not charging enough to haul freight so you can put money back, then you may not have the funds to replace or repair your equipment.

 

Doesn't take too long to learn what you need to charge to be profitable. Either your cash is accumulating or it's not. I never factored or did quick pay to date and been doing this 5 or 6 years now. Started with no experience at all. I did pay cash for all my equipment and started out with 20k in my pocket. Well, that went pretty quick which was a surprise to me. Took a while before I got into the swing of things and could float 20k to 30k and the checks started coming in on a regular basis.

I go out for 5 weeks at a time and go everywhere then come home for a week. I spare no expense on my truck and fix everything down to a missing tie wrap or screw.

Twice already I got got paid well to go into a crap zone. Got paid well to go to yet another crap hole and so on and so on. By the time I jumped out and took it up the butt to do a 600 mile run to a good area I had averaged very well for my total time out.

I've run only East of the Mississippi and did the best. Took it's toll on my nerves, truck and physically. All short runs and went from one load to another. Went for days and days without a shower and only eating canned food in my truck. Not my cup of tea.

I love the long runs and especially out West. The more miles I do the lower my fixed costs.

The one piece of advise I can give anyone is if you don't have at least $20k in cash to pay for fuel, your personal bills and whatever, your going to be sitting for weeks waiting for checks to come in.

 

I'll say it again, a lot of carriers use factoring to help them with cash flow challenges, especially when they're just starting up. Many in this forum have had or heard of others that have had bad experiences with factors, so do your homework. Read the fine print of the contracts and ask around for references. Several good factoring companies are discussed on this board. You get access to your cash sooner , offer fuel cards and they manage your receivables, which frees you up to carry more loads. I own a factoring company...PM me if you ave any questions.

 

Many of the major brokers offer quick pay for a discount of the freight bill. Rates range as low as 1 1/2-2%. Some charge as high as 8%, which is way too high. There are also factors which charge from less than 1% to 6% of more. In either case, you can have money in your bank account or on a fuel card within 24-48 hours from the time the factor or broker receives your bills. Some brokers will pay through Transflow or fax, without having to wait for the original invoice. The same with some factors.

Using quick pay through a broker or using a factor won't take care of a major breakdown, but it can get improve your cash flow, which can keep you moving. It is still a good idea to have enough cash put back to pay for a major breakdown.

If you have enough cash put back, you can still wait on your money and not discount the bills or factor which will put more money in your pocket, providing you can afford to front the cost of your operations for a month or two.

 

No offense taken at all...
I don't mean to sound like I'm bragging...
I have nothing to brag about in my opinion...
sometimes I choose incorrect words to describe thing's though...

just trying to express my point as best as I can...
It doesn't matter if your an O/O moving your truck, own a pizza shop,sell widgets and thingamabobs...whatever...

A person must operate all the time to be profitable...if not profitable the business will probably fail.
The SBA and SBDC has detailed info on this..for all types of business's.

If you have a head for business, it doesn't matter if have experience in that field or not...
but experience helps quite a bit and studies have found that experience reduces loss's tremendously,especially in most start ups and seasoned business's.

These brokers and the larger trucking companies drive down the cost of freight( big company...well i can get $5.00/m over here..but I need to reposition a few trucks...I'll take that $1.25/m to reposition those trucks...and all or most of my expense's are covered to move those truck's and then get that $5.00/m freight .....
otherwise probably at the end of the quarter I'll still be in the black, rather than the red...they hope...
as long as expense cost's they were calculated previously in the past quarters stay within projected parameters.
That's what their accountant's do all day long...

When the total dollar amounts are input to detailed spreadsheet's , then the bigger trucking companies know what is the lowest amount they can accept.
The larger broker companies also use similar software to map cost's on spreadsheet's just as the larger trucking companies use them for for the trucking industry.
(in my opinion, it might be wrong)

Most of the brokers out there,
prey on this..
do some quick research as to how much these larger brokerage firms earn in a year,moving "cheap freight".

They target small, to large trucking companies knowing they will accept that freight a stupid low rate just because the brokers know the trucking companies need to reposition their trucks around the county..

for real dollar freight that the trucking company has a contract with or whatever customers they might have,(Target, Lowes,whatever..)

When the broker's really need to move freight because it was sitting too long or the broker has to meet their deadline, then they raise the rate....
just enough to get most trucking companies to accept it right away, even if it is out of their way in some way,shape or form to put those repositioned trucks in better paying area's.

But then most brokers have contacts in the trucking business who know have excess of trucks in certain area's of the country during certain times of the month all year long.
They are the one's who get that better paying "back haul" rate to reposition their trucks.

This is common knowledge is the trucking industry for quite some time now.

I'm sure a topic similar to this was already discussed on this forum and many other forums many times.
This debate can be viewed and argued in many ways.

I don't haul cheap freight,if only cheap freight is available..I'll either dead head or take a 3-4 day weekend...
like today.

I refuse to haul,heavy freight for fuel money....it just doesn't pay in the long run for the future maint. and wear and tear necessities.

Oh, and I'm another guy who repairs or replaces almost everything on my rig, when it needs attention...not when it doesn't ... even things like those commercial,wide zip ties.

Also, I worked my butt off for many,many moons to get my rig..it's not a show piece in any way..
just another work truck.

crusin

 

If the freight is cheap on Thursday, it sure as heck will be cheap on Monday.

 

LOL,
I agree!

Fridays are always bad for me to load where I'm located at,
Mondays aren't any better either....But I have a choice of 2 good paying runs on Monday, that take me to a better area to load on Weds.

crusin

 

I live in a bad freight area at home. I have one shipper that 50% of the time he has something for me and he pays decent. The rest of the time I take it up the rear cheap for 600 miles to a great paying area. Those that say they will sit and not haul cheap, well, YOU WILL STAY IN MY HOME TOWN TILL YOU ROT.

We have bailed cardboard leaving close to me for $.90 cents per mile and it goes non stop every day being hauled by TMC, Swifth and all the other big boys.

Those that say it's us independents keeping the rates low, well, your wrong. We only represent just a fraction of trucks. The big boys will take every single load out of a bad area and when they are gone they will start dead heading them out. And where are those independents? Sitting all alone in a truckstop playing with themselves. Ya, you showed them. It will be the same story tomorrow and they next and the next and all the while your missing out on at least $250 to $400 in revenue you could be making had you gone to a better area.

 

I have NEVER hauled a cheap load to get to a bad freight area. I would rather deadhead. If someone doesn't want to pay a fair rate, I see no need to haul their freight. I don't care if everyone else is doing it, I won't. I refuse to allow everyone else along the food chain to make money and me not make anything, especially since no one will make money without the truck. Think about it. Part of the problem in this industry is that there are too many who are willing to just "get along." It isn't always the smaller carrers or independents who haul the cheap freight. But, keep in mind that the major carriers only account for about 10% of the freight hauling capacity. Hauling for fuel money has never appealed to me. When I know that I am going to a bad freight area I always get enough going in where I can afford to buy the fuel to deadhead out. If you don't take a cheap area to the bad freight area then you won't be tempted to take a cheaper load out. If you need to haul a cheap load to get out then you didn't get enough money going in. If enough people would stop hauling for free the rates will go up. That is how it works in a free market economy. You can choose to haul for decent rates or cheap rates. I choose decent rates.

 

I also live in an area that , depending on the week of the month, month of the year...has low rates for outgoing freight.
Rather than haul cheap freight, I'll most always every time,dead head outta here.

My approx. dead head to good paying freight is about 175-250 miles...(250/m =$125.00 in fuel)
so I negotiate the rate (with that dead head) that I start with with this in mind.

My philosophy is , let the big companies move that cheap,heavy freight out of my area.
They will haul it every day for $.90- $1.00/m.

I refuse "to finance someone else's freight" for those rates.

It doesn't make sense to increase my own rig's wear and tear
just for basically fuel money to get to another area.

crusin