Marketing

That's interesting that you did your MBA on trucking.

I think that if you had a brokerage, which I have thought about, that marketing would be a great benefit. My understanding is that most brokers first starting out cold call directly for freight, and probably 98% of it is a "no".

If a small company had a brokerage in place, if their own truck
can't haul it, they could broker it out.

 

That's good that you have a background in trucking. A lot of bigger business types try to look at all businesses as the same. To some degree, that is true, but I think that some businesses have a larger learning curve.

The problem (my problem) with the idea of having leased trucks working under an o/op's authority is several. First, there is an insurance expense. I am sure that carriers that have trucks leased on make a lot of money, but someone has to do the billing, payroll, dispatch, keep all logs for audits, file biils of lading, etc, etc. Also, the carrier has to have steady work that pays reasonably well or the leased trucks will leave. I would think that it would be best if they (the leased on trucks and the work) were close to your base of operations.

With that being said, I am sure that if the work was there, a lot of money could be made this way. It is better to make money filing paperwork than burning fuel! But of course that requires personell, and a line of credit. The trucks and personell get paid before the company does.

With brokerage, there is a bond, and I think there is a type of insurance that brokers can (should?) get, but I don't think it is in any way comparable to cargo insurance. The good thing about brokerage is that the cost is minimal. It is mainly the bond, a computer and software, high speed internet and a telephone. If you had a connection in Texas and you are in Pa, no problem. You could broker one load or one hundred. Depending on volume, personell could be needed as well as a line of credit.

Unfortunately, owner operators often don't have these resources. Many work completely alone, either leased on or with their authority. Sometines a family member can help them to find loads or do billing, but beyond that, their resources are few. And on top of that, most work long hours and many do their own maintenance and repairs. So unless they are willing to hire people and extend themselves, it's not probable for most to do this.

It's funny, because as I write this I realize that the business of being an owner operator is the exact opposite of big business. O/ops try to do as much themselves as they can as a one man band, whereas big business uses their troops to carry out their objectives. I think that I should start taking some management classes, lol.

 

Working under an authority is a lot different than working under your own. Even though many will dispute this, a bunch of people do find their own loads under other people's authority and it takes off a few burdens off the O/O by paying the agreed percentage to lease under the authority.

 

I missed this response earlier. I think it's because most (in my opinion) think on the level of having one truck. And I think, for the most part, having one truck completely occupies them. I also think that owner operators have a much smaller operating budget than bigger businesses, so the resources aren't there to really expand on a larger level. There are some that do it, but I think they are in the minority.

In my other post, I was kidding about taking management classes, but now that I have had a little time to think about it, that sounds like a good idea.

In fact, why don't I ask the question to you. If an owner operator wanted to be wildly successful, what should he study in school? There are plenty of resources to learn via the internet nowadays, and plenty of time to study while being loaded, etc. What would you recommend?

 

Thanks for the info. I will look into that.