Entrepreneurship Class Assignment

Brokers have as many days to pay as it is stated in the broker-carrier agreement. 30 days is a standard. I don't think there are any laws regulating it though. For instance, I refused to sign a setup with a broker who stated that he reserves the right not pay me as long as his customer does not pay him. LOL LOL LOL. So in other words their pay terms were indefinite.

 

I won’t let a Broker owe Me for more than 1 Load at a time. With only 1 Truck, 1 Bankrupt Broker could take Me with Him. Always ready to set up, after checking credit. Relying on 1 Broker or waiting on them to find freight, has put a many O/O under in the past. Easy these days to set up contract. Not like in the past. Got to be flexible, to survive.

 

Wow. Do you remember who that might have been?

From experience if the brokerage doesn’t send payment by 21 days after the load is hauled then your DAT reporting will be over 30 days. Since a lot of carriers take a week or so to get you the paperwork, you might be paying on what seems like just two weeks. Especially if they factor so it goes through even more hands. Most customers you can’t bill until all paperwork is completed and mailed in then must be processed. Some customers used 3rd parties to send payments which makes for more delays. My point is it’s very easy to run a few weeks to a month gap between getting paid and paying out. That’s just the reality of how things end up working.

 

I'd have to dig it hard to February 2017. They posted a load out of Dallas to Denver I called and we agreed for $1700 which for me back then was a grabber. The first flag was that Triumph on DAT did not mark them as factorable, then I started reading their set up and that was what I found. Also some reviews on DAT directory confirmed that concern.

 

. Exactly, 30 days to pay, can easily become 6 weeks after delivery. Been there done that. Sure messes up cash flow with a 1 Truck operation. Easy to get behind, waiting on money. Factoring for Me is unfortunately a necessary evil. Keeps Me from financing costs. Which in turn costs more than factoring. In my case anyway. I’ve done it both ways. Much better to know exactly where I’m at always. Otherwise it gets blurry. Also no more billing hassles.I bite the bullit and get my $$$ immediately. It’s bad bussiness I know. But it works for Me. Much better than the other way.

 

There was a time that I run for Armstrong a few times in a row to Publix DCs in GA and FL from IL When it got to the point of exceeding 10K from them alone, I kindly backed off although I did like those runs and really wanted to keep going. Their set up had some unnerving clauses too as far as I remember. They paid all of it as promised. I should have kept going....
I mean, I could be hysterical and paranoid when it comes to signing any of those broker set ups, the way they are worded makes you feel like you sign your own death warrant.... I literally see a potential catastrophe in all of those. But there is no way around it, either you sign it or you don't do business with them. Or go run under someone else's authority.

 

My overall impression is that many of us, if not most- owner operators - arrived at the point where we are as a result of a evolutionary process - there was not any structured laid out business plan. After so many years and miles, a manhood demanded a truck ownership and as soon as the circumstances were there in favor and the opportunity arose, a truck driver of many years became a businessman, although he himself may not have realized or appreciated the transition. Most of us, without business plan, survive just like that ;by luck and cunning skills. subjected to the forces of chaos.
Do I have a business plan? No! What would it be? I am just a fisherman with a boat. My goal is to catch as much fish as I can, every day. And as long as the boat is floating I am good.

 

that's what I'm talking about. lol

 

That’s tough bro. Just 1 load? How do you get into a rhythm in case a situation comes up where freight that normally doesn’t hit the board, ends up on the board because the normally carrier couldn’t handle all the loads? This to me is where the bread and butter can be found. There are brokers that always come to my company first when certain loads pop up and I say yes basically at any cost possible because I know if I don’t another carrier can come in and undercut me and it become their new bread and butter. Especially in a market where rates are declining. Sometimes even if the agent would want to still give me all the loads, the up high in the company guys see why is 90% of the loads going to him but the other 10% are going to these other guys at 15% cheaper? I’ve even dead headed trucks 200+ miles to grab these loads to preserve them. Got off on a tangent there but my point is if you only extend one load of credit you could be limiting yourself.

Hey whatever works for YOU. Yes, it’s costing you money and a line of credit would be cheaper, or just save up more liquid cash in hand BUT only you know your mindset, habits, and what works for you and that’s all that matters end of the day. You are still trucking and many are tits up.

I definitely understand but like you said that is unfortunate that you ended up kinda stepping on your own dick. lol. I get very few bad debt write offs per year. Surprisingly we have pretty good luck. I do keep a black list and also check the Baxter Bailey lists and certain surety bond companies are red flags to me. Also, how often they change surety bonds. There is basically zero reason that should ever change unless your in trouble.

I’ve had brokers get up to 30 or 40k before. Normally it was because like I told RideandRepair we got on some real good stuff and kept knocking them out. Believe it or not I don’t even like Schneider but they owe me $35k right now. I have a customer who owed me over 100k one time but they are a world wide company so I knew they were good for it but still got nervous!

I guess what it all comes down too is: Calculated Risk