Learning From the Industry

A motor carrier handles the physical aspects of transporting goods from shippers to receivers. Typically, a multi-truck fleet will have in-house departments to handle functions such as sales (finding accounts with shippers), dispatching, accounting, driver management, and accounting (payables, receivables, settlements, which is driver pay).

Sometimes smaller motor carriers outsource some of these functions to external providers. For instance, a motor carrier might be too small to provide the capacity needed for handling a direct account with a shipper. In other words, they don't have enough trucks in the area to provide one when the shipper orders one. So instead, the small carrier will source their loads from the spot market, which is mostly freight brokers, or 3PL's. The brokers play a valuable role to both the shipper and the small carrier in that they provide freight to the carriers whom have no accounts with shippers, but also can offer shippers the capacity needed due to the broker having many relationships with small carriers. Why would a shipper use a broker, you ask? Because many times the shipper is not interested in staffing a department of folks needed to maintain all of those relationships with say, 100 different carriers. It's time consuming, and exhaustive.

Dispatching is usually done by the carrier, but if they're a single truck or just a few, they might use the broker to perform dispatching, in a sense at least, because the broker will typically want to have cell contact with the truck, and the broker will usually provide the load details to the driver, or carrier, which serves as a dispatch notice.

Billing, whether it be a carrier invoicing a broker, or a shipper is almost always done by the carrier. He wants to maintain tight control over what is and isn't invoiced, and to have a system in place for auditing his receivables to make sure he's getting paid on time. The exception, or modification to this practice is when a carrier is using a "Factoring" service. Such service is an independent agent who buys the freight bill from the carrier, and advances the payment to the carrier even before the freight bill is collected on from the shipper. Two types exist, recourse, and non-recourse. This means that the Factoring agent will either come back to the carrier for monies paid if the shipper fails to perform payment as agreed, or not.

The loading and unloading of freight at the docks is done either by the shipper / receiver, with his in-house warehouse crew, or by a 3rd party contract crew called "Lumpers", or occasionally, the driver himself will perform the freight handling. In the last two examples, the loader / unloader is typically paid for the service, and it's separate from the freight bills in such cases. If lumpers are used, they will look at the Bills of Lading / Manifest, and formulate an estimated cost based on labor involved. Then the driver will agree, or not. Once the freight is unloaded, broken down, counted, or otherwise verified against the bills of lading, the payment is rendered before the driver is given the POD (proof of delivery) back, which he needs to collect on his freight bill from the shipper. Payment is usually rendered to the lumpers in cash, check, or occasionally credit card is accepted. Carriers working through brokers will usually build this cost into their rate quote, or get in writing a stipulation that the broker pays for the lumpers when the carrier submits a valid receipt with the freight bill. The last instance, where a driver unloads, or loads, is typically done by choice, and the driver gets to pocket the money that would normally go to the lumpers. Some companies require driver unloads, others it's optional, and some forbid the practice due to insurance / liability reasons. Most times, when a driver unloads the truck, his company will pay a fraction of the fee to him that they would to a lumper service. I can only explain this as greed, but there may be a better explanation.

Hope this helps get you started. I'm sure many others will contribute, too.

 

Can you be more specific? Trucking is a service industry creating place and time utility for goods already produced. Trucking is a mature industry beset with environmental and safety regulations while struggling with rising costs in a competitive market. Capacity exceeds demand in many areas. There is a shortage of qualified truck drivers. The cost of equipment, fuel, driver recruitment and training, and insurance continues to rise. Credit is tight. Since 2007, the cost of a new tractor has increased by more than 30%, tires by 27%, tolls by more than 60%, and health care costs by more than 60%. The average age of equipment is increasing. Trucking has always been a volatile industry with mergers and bankruptcies. Are you sure you want to learn about it?