Leased to a company vs. Own Authority?

And if your going after CUSTOMERS of your own do not forget the time and $ to play salesman, customers like the regular visits along with lunch now and then ( Also pens , calendars , hats ecte ) as you can be sure other carriers will be knocking on their door.

Also need to setup a proper website ( lot of potential customers / brokers want you to have a WEB PRESENSE when they check you out ) and proper email accounts in your company name not BIGBOB LIKES FISHIN @ WHEREEVER.COM and remember to check the email accounts as today most correspondence is by email.

 

You have to factor in the cost of running your own authority. insurance is big cost for IC . Plates are not cheap. No fuel discounts. Broker fees at least 10%. Insurance cost was big factor why dropped own authority and now lease. Call insurance company's and get rates it might surprise you. Good luck with what ever you do.

 

how do these shippers think they are going to move their freight for less than $1.20 a mile including fuel surcharge? You would be surprised on the DEALS some of the MEGA CARRIERS offer

 

Most of the big company's. Have what they call weekend rates where they under cut the rates just to keep their trucks moving. Take a loss on load make it up on another truck.

 

Think of this in other terms.... index fund investing or day trading.

Independent, under their own authority is much like day trading or commodities trading. You have to know your market, hit is right, and risk it all. You can win big, you can also lose large. You put it all on the table. If you have the savvy for it, go for it. It can be a good thing, it can also cause a major financial collapse.

Leasing on to a carrier, that is more like index fund investing. You are not going to see the big swings in the financials, but if you are in the right fund, you are going to see solid, predictable growth. Leasing on with a solid carrier with a great customer base is like a being in a great index fund. When the markets go up or down or slide sideways all over the place, you get predictable revenues, fuel surcharge adjustments to take care of swings in fuel pricing, and a host of other goodies. The rate might not be the wild $4-$5 dollar stuff, but likewise, you don't have to take it in the shorts on some loads. Again, it all depends on who you are with. Just like there are bad and good investment funds, there are bad and good carriers. With both investing and selecting a carrier, one has to do their research and determine what works best for them.

 

So you know sales, I just saw you're in a fairly decent area for freight. If you want to run your own show, I'd concentrate on a few lanes that you can make profitable. Build your fleet until you can devote 100% of time to the office and sales. Once you're to this point, flip a coin on whether or not to become a carrier. The agents your using for those lanes will most likely continue to use you through Landstar broker while you try to solicit your own customers. Risk vs reward weighs heavily here.

As far as freight goes, last winter was a fluke. January and February are notoriously poor. The agents that have direct freight still have good rates, but loads going through a 3pl, brokers or have multiple trucking companies vying for them will be weak on revenue and will get hauled. Being very selective, I'm averaging north of $2.20 per mile to the truck.

 

"I hate actually Driving a Truck". that was good for a laugh.

 

I have never leased on to a carrier, but I can tell you with my own authority I spend at about an hour each week, 4 hours each month, & 8 hours each quarter doing paperwork above & beyond what I did as a company driver.

On top of that time, there are probably $5,000 in plates/permits/fees that I have to cover, another ~$1,500 in load board subscriptions, my receivables typically run $20,000-$35,000, and I figure I may have to write off $5,000/year in bad debt -- things the average leased driver probably doesn't have to worry about. In exchange, I gross an extra ~$50,000/year.

That may be worth the hassle for some but not others. But if your ultimate goal is to build a fleet under your own authority, it makes more sense to me for you to get your own authority now so you can figure out all the teething stuff before you take on the responsibility of employing other drivers. If you build a fleet leased to someone else and then jump to your own authority later, your learning curve might cost you otherwise good drivers...