Leasing under a carrier's authority

Where are you getting insurance? Because if insurance is wiping out 10%, either your rates are junk or your insurance is killing you.

My cargo insurance is nowhere NEAR what I was paying my last carrier. And based off that, it's still a difference of over $1700 monthly from what I paid the carrier and what I am paying for cargo insurance. $1700 in MY favor.

I also wonder about your factoring. The more I looked into it, the more it made sense to just take the quickpay or fuel advance. Yop, would loose 3-7% for quickpay, but it's done. You have your money and that's all there is to it. Where as with factoring, they can come back on recourse if they have to if that's set up.

 

That's AFTER factoring, loadboards, etc... insurance runs us about $520 a month... we use OCC for our factor... it's 2% if they pay in 30 days, an additional 2% for each 30 day period after... so, for planning purposes, we just plan for 4% loss to the factor... that leaves the 6%...on a $5000 weekly linehaul, that's a whopping $300... take out the loadboards (3Sixty DAT and ITS), the dispatcher, office rent, Safety Program through NASTC, etc., there's not much left... and that's o.k... the idea was to treat OPs fairly and do just a little more than cover costs... if you're getting 87% of linehaul, your M/C is making a little more, but by no means a killing... I've never seen a better deal in the industry... there may be some, I've just never encountered them...

 

so you get 10% of $5000 weekly or $20,000 monthly.

That's $2000.

You pay $520 for insurance. Puts you at $1480.

Another 4% for factoring or 80. Puts you at $1400.

Load boards are at $100 average each. (why you are running DAT360 and ITS both is beyond me) so that's $1200 monthly from one truck to help pay the fixed overhead.

 

Dat 360 is is $300 per month, ITS is $35... MSP is $100 per truck, office rent is $100 per week (in FL, no less), dispatcher gets $200 per week per truck (right now, 2)... it adds up pretty quick... that's OVER the $2000 per month... the reason to run both 3Sixty AND ITS is that there are different loads posted on those boards... yes, there are duplicates as well, but we tend to find higher paying loads on the DAT, just as we tend to find a wider variety of loads on ITS... THEN, there's things like electrical and phone bills, etc... trust me, finding someone giving 90% PLUS paying all the insurance would be pretty tough to do... not saying impossible, but not with MY overhead... and, 4% of $5k is $200, not $80... the 4% is on the BOL, not the M/C's cut.

 

Some quick numbers on a $5k week linehaul per truck:

Dispatcher + Factor % = $400 x 2 trucks = $800 per week

Monthly Expenses: Office: $400
LoadBoards: $335
MSP $100 per truck = $200
Utilities: $150 (avg)

Fixed Costs: $1085 monthly
Variable Costs: $1600 per truck x2 = $3200

Total Average Costs monthly: $ 4285

10% of linehaul on $20k per truck = $2,000 x 2 trucks = $4,000 --> Net profit NEG $285

Sooo.... absorbing ANOTHER $1,040 in insurance would be just insane...

Once my boy gets ahead of the 8-Ball, he can stop using the Factor... on the above figures, that would put $800 per month, per truck in his pocket as the M/C... that's hardly a killing, but, as it currently stands, he's DROPPING about $300 a month... seems like any M/C is entitled to a LITTLE taste of the milk, dontcha think?

 

your numbers still aren't making sense to me.

You say he'd only put $800 per month back into his pockets but $800 per week X 4 weeks is $3200.

At this rate, you are hemorrhaging so fast, you should just quit while you still have something somewhere that you are putting to that $285 per month.

If you really feel like throwing it to the wind, send it my way....

 

I'd say at the moment turn off 3Sixty and get your dispatcher 350 a truck

 

Pay one or the other, but not both...

 

Where do you get that from?? $800 per week covers 2 trucks for both dispatcher AND the vig to the factor... thought I was clear about that... the breakdown is $200 per truck, per week for factor... times 4 weeks, $800 per month per truck... pretty simple to me... I HAVE the books right in front of me... right now, ASSUMING an average 4% vig to the factor, amounts to a loss of $285 for last month... not TOO bad when considering it's small and just getting started... my POINT to giving the numbers was to show that absorbing the insurance costs would be nuts... additionally, several of our customers have paid within the 30 day window, so that puts a few pennies back in the bank... I STILL fail to see how you consider 10% vig to an M/C unreasonable... that sounds like C.H. Robinson expecting us to PAY to haul freight... As I recall, you've stated that you give up 13%... sooooo... on a $5k week, you give the M/C $650 as opposed to our $500... IF your M/C is paying the insurance, that adds up to $600 per month... seems like WE are giving a better rate by not grabbing that extra $80... just saying'

 

Why are you renting an office, paying a "dispatcher" and paying an asinine amount for loadboards for a 2 truck dog and pony show???