Flat rate percentage contracts seem unfair

I figure once I get my truck paid off and all fixed up, I'll get a wagon next. Seems like I won't get the high dollar auto freight that requires the 10 year or newer trailers when I'm just starting out, so I'll buy an old used trailer for cash. Then I'm getting my own numbers or leasing onto a very small carrier. I pay LS way too much for such a limited load board and an agent BCO buddy system that's hard to compete with. I can run the same freight as an outside agent. My buddy and I compare the BCO board with his load board all the time.

DY,

You ever going to start leasing guys on? Do you currently run Hazmat under your authority, or will you in future? When my buddy setup his numbers he said he didn't want the extra headaches, but I haven't looked into what extra one has to do with their authority to haul Haz.

I've been pestering my buddy to lease me on, and he's willing if I persist and get a wagon, but I'm not ready just yet. As much as LS is taking they do make it comfortable as far as sitting back and not worrying. I simply get an alert before a compliance issue is due. Granted, I'm probably paying the equivalent of $10k for what a google calendar reminder could do....

 

If I were to ever lease guys on to me one day, I'd only lease guys on with their own base plates, and I probably wouldn't offer anything but the numbers and insurance, if I was still running my own truck. I'd also have to be very selective. I couldn't just hire anybody. I would want the break on insurance by having a group policy, and a fair percentage cut I guess. But the risk reward would get wiped out real quick if someone trashed my numbers.

Definitely seems too risky the more I think about it. I wouldn't think about being a manager though. I'd offer a dispatch service, but it's non forced obviously them being a contractor. And I guess I could offer IFTA filing, but then I'd create a full time office job for my self, and I'd need probably 6-10 trucks to justify parking mine to sit in a home office all day. Might be an option if I couldn't drive anymore for health reasons.

 

I'd venture a guess that, if you applied a risk model to both cases, the risk dollars in B would make up most of that difference.

 

Icsheeple, there are other benefits to being leased to a large established carrier such as landstar.

Access to freight you wouldn't other wise have a chance at. the dod, ge, Lockheed Martin, caterpillar, the just aren't dealing with a one horse show.

Brokerage freight is only gonna pay what they have to pay to get the load moved. And there is always some ####### one horse show trucking company without a clue willing to move it a lot cheaper than you.

Being leased, you often get just as much, if not more, than the guy with his authority will get brokering from your carrier.

All that being said, when capacity is tight and the load has to go, there is opportunity to gouge the broker for very high rates.

 

Better hang in there at Landstar a little longer. Brokered freight really sucks right now and who even knows if we're at the bottom yet. You can be sure even in the good times though that most guys would be better off the money they clear at a bigger company and right now most anyone pulling off loadboards would be. DY I don't know of anyone who keeps up with their numbers that is leased somewhere even bothers looking what comes out above their cut. I never do. It's as important to me as the cut that a broker keeps. I never see it, not mine, why bother?

 

Insurance is much higher for long haul...... That's probably the biggest factor.