Why do you lease to a carrier?

I could care less about what a broker makes off of my load..... I know what my numbers are n if I can beat him out of more.... Great... But I am definitely not takin less than my number.... I always get 100% of what I agree to.... That brings up another problem with percentage leases.... If your not seeing the invoice they send out you're gettin Ripped Off.... Guaranteed.... If you Dont think so... Ask your company to prove you're gettin said percentage.... Start Talking Full Rate Disclosure you're most likely to be shown the Door....

 

So you are one of those guys then. You're making 75-80%, I'm making 73% and I have 100/% access to every freight bill with a click of the mouse with Landstar. I've been in these discussions before and o/o like you will keep arguing, but the bottom line is it doesn't matter what you call the middleman, broker or carrier, they're taking a cut. I booked a 250 mike $2500 legal load last week. They could have brokered it out for $1,000 and it would have blown their phones up at $4 pm. I got it for $1850 to the truck which is $7.40 per mile.

 

Shown the door? Who runs loads under contract and doesnt know his own numbers?

I'm still fairly new as an O/O. How ever.. I know my contract.. I negotiated what I wanted before I ever agreed to buy my truck. We have a 20/80 split and every brokered load I run, I am emailed a copy of the booking sheet. So I know exactly what its paying. I negotiated the min rate that I would run for. Nothing is forced on me. I also have the option to jump ship at anytime for any reason.

So while there are shady carriers out there. I dont run for one. I run for an O/O with a small fleet of trucks and other O/O's like myself. Just because I dont follow your path doesnt make what I do any less or more profitable. I'm not going to throw my NET numbers out in the open. But my NET income is on par with other O/O's running their own authority. So unless you can show me where I can make more with less headaches and more percs I'm all ears. I'm absolutely content with my current arrangement. I mean all I really have to do is run the load and maintain my truck. The rest is pre-managed for me. How can that not be a sweet deal?

Hurst

 

So here is the death nail in the 100% of the freight vs broker freight. CONTRACTED RATE. It is difficult for a carrier to go back to a customer and ask for more money when capacity is tight. Independents can force the issue and get better rates in the right market. Year over year numbers in the spot market have seen double digit increases for the past several years. Contract freight is seeing low single digit increases and this year is the first year that they are seeing high single digit increases as customers are looking to lock in capacity.

But don't think being independent is easy or as cheap as it has been. You can have all the right relationships (that take time to build, be an expert on the markets (so that you are positioned properly to get the best paying freight) and if you don't provide service and think like a typical driver you will not do well.

Insurance rates for new independents is crazy and since Progressive has stopped flooding the markets with cheap rates you are seeing huge increases.

If you are a good business person, understand how the markets work and don't buy into truck stop or OOIDA business models you can do very well. But it takes time.

If all that seems like a bit much then you need to look at a reputable percentage carrier like LS, Mercer, etc. As mentioned, getting copies of billing/rate confirms is a must.

You also need to forget the mileage mindset regardless what you do. Mileage should only be used for figuring out expenses and bench marking. You are looking at pricing based on time plus you expenses. You need to focus on a minimum daily revenue plus true truck expenses.

 

Just because it's direct doesn't mean it's at some contracted rate. Brokers are direct, too. Sure you can haul commodities cheap, but there's no money in that unless you own Maverick or TMC and do volume. Most of my direct freight is quoted by individual shipment.

 

Very very very good point, when I was leased onto a carrier I did three loads back to back all in the same week one time my part to the truck for this run always paid $1,850 but since I moved all three loads that week for them they would cut them a deal I ended up doing them for $1,000 a load and spent $500 in fuel doing each. After all the hell raising I did I never got anywhere with it. I ended up going to the customer to ask if they ever got any rate cuts or special deals "they said no we pay $2,200 for that run no matter how many we move" they never would show me any invoices that they have done they simply fat out told me they did not have to provide any of that information to me.

Kinda like them lease companies that pay mileage pay you know $.94/mi loaded and empty plus fuel surcharge so every load pays the same? And every lane pays the same?

 

Why is it that you only get to see broker load confirmations????? Ask them to show you there invoice on all the loads you run to prove that you're getting a true 80/20 split-100% FSC..... I am currently making more now that I have ever have as the spot market is in a name you rate situation as long as you remain in the hot lanes.....

 

I have my own numbers.... I make 100% of everything I Book.... I bill everything I book.... Where you get 75-80% I have no idea... More than likely I make more off of Landstar Loads than you do.... As far as them giving you a load n throwing 1500 down the drain-Sorry those days are over... If they could have covered it for less than what you did it for they would've jump at it in a heart beat..... Just remember when you work for someone---- You're not that special as to where they're gonna throw money away to keep you happy......

 

Yep the brokers give you 100% of the rate and don't take anything for themselves. Sure. You probably make a point or three better on most Landstar loads you book, but you #### sure aren't getting 100% of the load. Unless it's an emergency, the MINIMUM that Landstar takes from broker trucks is 18%. That's the minimum, there is no maximum. So you're getting 82% of what the customer is paying BEST CASE! Can you comprehend that? If you're doing Savings Plus, that's another 1.5% to get paid in 2 days. I had three trucks and an o/o leased to me for years under my authority. I know the game and play it well. You have no idea how much money your leaving at the table because you have no idea what the customer is paying. Why would LS try to keep me "happy". I never talk to anyone at Landstar corporate unless it's time to pee in a cup. The bottom line is this, it takes less than a week to reactivate my authority. I ONLY do this for money, I don't find any glamour in it. I make far more doing what I do here than I could working for brokers getting "100%", because I'd lose a ton of my lucrative freight. If you're happy making less, awesome. I have a friend like that. He could make fistfuls of cash leased to Landstar with his Conestoga, but he likes his $2 freight.

 

And that my FRIEND Is y I OWN MY TRUCK AND WHY I LOVE IT...YOU HAVE THE POWER TO OPERATE FREELY as you PLEASE,
DONT YOU LOVE GETTING Paid 24- 48 HOURS AFTER YOU DROP IF WANT TO LOL

Some people prefer there own AUTHORITY AND IT WORKS FOR THEM,, SOME CHOOSE TO LEASE ON and It works for them also I LIKE TO HAVE THEM TAKE CARE OF THE PAPERWORK ,, if and when I do decide to go OWN AUTHORITY I will but for now I ENJOY IT-BUT THAT IS JUST ME ...BTW what RESTAURANT YALL ATE AT? LOL