Could a shipper lease on owner operators?

Because the extra $400 covers the overhead of a small operation but won’t for in house transportation program. It gets costly, paying the up front cost to establish the authority, then seeing an increase in labor costs which are not covered by the savings because they have to hire experienced logistics people for the segment to make sure their product is moved. The back office staff for a Walmart operation has to be more than 20 people, and while they may see a $50k gross, the benefit costs push that up to $75 to $80k. Not to forget now they have an increase exposure to the liabilities of the authority and possible litigation costs of an accident or incident.

 

You’re right. I wasn’t trying to make a point I was just curious if it was theoretically possible. The more I thought about it the less it started making sense. It’s a lot of risk, upfront cost, and liability for the potential to save what would end up being like a few cents on the dollar and that’s if it all worked out. Look at how many carriers lose money and go out of business. For every successful one there are 10 unsuccessful. So your in house transportation division would have to be top notch and thread the needle everyday “so to speak” to save any money on your shipping, and at the end of the day, all of that hassle only leads to potential tiny savings with a ton of risk now added on. I guess if there was any way to cut out the middleman then someone smarter would have thought of it years ago already.

 

Comparative advantage.

Shipper spends their time and money, focusing on their product or more than likely be more profitable than taking away that focus to another task. @Ridgeline stated there is liability in transportation.

 

Ashley and Hobby don't subcontract out to O/OP's or 3rd party.

The price of their goods for sale reflects what they pay out to maintain a private fleet.

Nalco/Ecolab is starting to get their own private fleet rolling now and getting away from using 3rd party major carriers like QC, Altom,Heniff,Schneider.

 

Ashley has a large number of private carriers hauling for them...I have hauled many loads out of Arcadia, Wi.