Rates, What are the normal rates at? I know this may not be a good subject!

You wanna put this in the owner op forum

 

A lot of variables come into play when you are seeking rates. What are you hauling? Are you offering any extra service? Are you formulating a bid for a direct contract, or planning on trying to keep the trucks rolling with 100% spot freight?

 

From what I've read on this forum, they are anywhere between $.88/mi and $4/mi. But I am pretty sure that $1.80/mi is about close to average for the country.


Be careful about buying a trucking company. They may be saddled with debt that you don't know about. I think the biggest things to look at is if they lease their trucks or own them outright. And then you need to know about what kind of contracts they currently have and what the contracts consist of.

And I'm not sure, but if you buy a trucking company, you have to put the whole authority and DOT # and all of that into your own name, or your company's name, and that doesn't just automatically happen - you have to be approved by the gov't. And then from what someone else said on this forum who recently moved his business from one state to another, it is a huge hassle with a lot of steps.

You might actually be better off starting your own authority. If they have no customers, then good - just buy the trucks and put them into your own authority. As far as contracts go, well you're not going to be able to get any kind of contract with a shipper without a good solid history and reputation - that just doesn't happen in this industry, where small trucking companies are a dime a dozen. You might be in a better position to do that in mid summer, if things go right, but you might not, either. So don't worry about what kind of service your company offers - the most important thing is to get the load from shipper to receiver on time and safely. You're going to have to get loads off the boards, and maybe a year or two down the road, if you haven't gone bankrupt by then, you might be in a position to get a direct shipper.

Oh - and btw - drivers for small companies tend not to like when they have a new owner. You might just end up with 4 trucks sitting empty with no one to drive them.

 

JIT, expedited, LTL, drop trailers, same day dispatch, and other things come into play... You're going to bid higher when the amount of stops increases, for instance.

If these are established fleet carriers they should come with some accounts. That's where a big portion of your bread and butter will come from. Service your direct shippers and use spot freight to get back to them if necessary.

Do these companies come with someone in sales whom has been taking care of the clients or is that a role you will assume?

To get a basic lowball estimate of lane averages in the spot market, you can use load boards for the rate index tool(s). You'll need MC# for most load boards.

In other words, there's no single answer when addressing your question. Good luck.

 

I just tell the blunt truth how I see it and from what I've read.

It's a fact that good drivers are hard to find.

If these small companies have contracts with direct shippers, then basically that is all you will be purchasing - given the fact that you said the trucks will be worthless due to CA carb laws. And to be honest, if those companies do have direct freight contracts, they might not be paying much more, if at all, than what you could find on a load board. And if you are purchasing the contract, well you haven't mentioned how much you would be buying these very small companies for, but if it's more than $100,000, then you might not even come out ahead for the first 3-5 years.

And yes, it's difficult to buy someone else's authority and have it transferred to your name or your company's name. Because you WILL have to be approved by DOT, and then you will be audited.

So it just makes sense to me, if the trucks are worthless in CA, then I wouldn't purchase them, I'd just purchase new trucks. And then if the contracts are better than average, then I'd just purchase the contracts, and I really couldn't tell you how much to pay for someone else's shipping contracts.

And also, if these companies only have 4-8 trucks, then I can't see there being more than 1 or maybe 2 shipping contracts.

If you're good in sales, well then good - but remember, shippers only pretty much care about who does it for cheaper. And a lot of times, you should know, they outsource to brokers because a lot of times, it actually saves them money to not have to hire people to coordinate the logistics.

From what I've read, anything going out of CA right now is about $2-$2.20/mi and a bit more if you're going up to WA, where right now rates are really cheap. So if you say that you've had a trucking company start-up at one time, then you should know that rates fluctuate depending on the season.

And it does kind of insult me that you'd knock me because of my username.

And about the trucks sitting empty - I started driving for a smallish company about 16 months ago, had about 30 trucks, a lot of very veteran drivers, a veteran company, who had recently gotten new owners. I was promised the company was stable, and had plans to double the fleet size. I was even paid 45cpm believe it or not. 6 months later, they were bankrupt and out of business. By the time it was all over, they were down to 9 drivers. Unfortunately, this is a not-so-uncommon occurrence in this industry, and with turnover rates in this industry now averaging OVER 100%, I DO have concern that drivers who may have been with the old ownership for years, may end up leaving due to new ownership who doesn't know anything about how the current company does business. Of course I'm not speaking for everyone, but I think drivers tend to not like big change like this - and all too often a driver will just as soon go to another company.

I think that not only should you be worrying about what rates are like, you should really be worrying about the other intangibles like I mentioned. If you're a good entrepreneur, then you should know that you need to find out EVERYTHING about the company, how they run, what a typical day is like, before you take over. Even this company that I worked for that went out of business, they didn't take over completely right away, they slowly inserted themselves into the daily operations and it took 3 months before they were completely in charge. Still didn't work. They mentioned that they bought the company along with a certain amount of debt that they couldn't overcome.

I'm not trying to discourage you, of course, but I'm just the kind of person who actively searches for all the problems and pitfalls of what I'm going into before I actually go into it - so that I'll know what to be prepared for that Murphy's Law takes effect.

And when you said you don't have the patience for a start-up, well maybe you're in the wrong business. Trucking is not a turn-key and you're going to have to be very actively involved in the running of the business. Probably 50-60 hours a week.

Anyways, take my posts for what they're worth to you, and I'm wishing you good fortune for your venture!

 

Good points about the truck age. There are a lot of freight opportunities in CA so keep that in mind when talking tractor age. If you have a specific lane you want priced, tell me the origin city & state, and the destination city & state. I can look it up for you and tell you what the supposed lane rate average is.