Cargo Vans Who Run For More Than One Carrier: An Editorial

**Jefferson3000** · 01-11-2010, 02:24 PM

Recently there have been a few discussions on here about a few encounters with cargo van and sprinter owner operators allowing more than one carrier to “lease” their services. I believe that the thinking behind this is that two carriers would mean twice as many opportunities. Some even claim to have three. Because the “under 10K folks” are generally not subject to the same compliance rules that commercial grade vehicles are subject to, it is thought that this trend will somehow even the score for the bottom end rates that vans are seeing. However, I would like to offer different view.

Smaller expedited carriers (as well as many larger ones) generally have overlapping customer bases. Not many shippers, much less brokerage houses, have agreements to use one carrier exclusively. For an Alliance carrier who partners with other carriers, this can be magnified, until the gene pool becomes quite small.

For example, I do a truck search on the Alliance system looking for a CV within 50 miles of Podunk, WI. Four vans appear. After speaking to my owner op who is currently sitting there, I find that he knows the owner op sitting next to him. It turns out that the other O/O has an agreement with AA Delivery, BB Expedited, and XYZ Logistics, all listing his van at the current position. A load is posted and three carriers scramble to book the load for that same truck, each one bidding lower, knowing that, after my van leaves, there are TWO other vans sitting there besides theirs. What does this do? If the carrier’s revenue is not allowed to increase as freight increases because of false competition, they WILL NOT be passing any more FSC or otherwise to the van owner operator.

Next situation. I am searching Podunk, WI for trucks, not because I have an owner op there, but because my brokerage has a load needing to be covered. Three vans are listed by the carriers listed above, although there is in actuality only one van there. My brokerage is going to be tougher on the price we pay, because we believe that we have THREE options to choose from.

Cargo van owner operators are their own worst enemy in this recession. By allowing yourself to be leased to more than one company, CV owner ops create a feeling of disloyalty to the carrier, who may be working hard to book your truck, as well as take care of their customer’s needs. Many of you complain about the carrier not booking you, and yet the question remains: “Why would they work hard for you, if they know you will jump ship as soon as your “Plan B” pans out for you?” My recommendation is for any owner operator to find a carrier where they can trust the workers in dispatch. If you don’t really trust the first one, why would you add a second or third that you don’t trust either? If the definition of insanity is doing the same thing again and again, while expecting a different result, then why multiply your troubles? Trust is not built overnight. Trust takes time. A good relationship is not built overnight either. It requires risk.

Many owner operators are not as successful as they could be, because they refuse to trust and adjust their mindset. Do your research on EO, but understand that some information is now outdated and irrelevant to the current state of things. Expedited trucking is an ever changing industry. The only way to stay relevant is to listen and learn from the right people and places.

**CharlesD** · 01-11-2010, 02:32 PM

Amen. I couldn't have said it any better.

**davekc** · 01-11-2010, 03:09 PM

I don't know that I would say this is exclusive to cargo vans, although I do agree they are impacted more by it.

**jaminjim** · 01-11-2010, 03:29 PM

Not sure but could the decline in rates also be attributed to the people who, after learning the business leave their carrier and go into direct competition with their previous carrier?

**aristotle** · 01-11-2010, 03:46 PM

I imagine the DOT would take a dim view toward any van purporting to be under contract with multiple carriers simultaneously. Liability issues and insurance conflicts might arise in some situations. Best bet is to keep a van under contract with only one carrier or get your own authority. Trying to play cute with the rules and regulations nearly always leads to regret.

**Lawrence** · 01-11-2010, 04:17 PM

Originally Posted by jaminjim

Not sure but could the decline in rates also be attributed to the people who, after learning the business leave their carrier and go into direct competition with their previous carrier?

This has had a dramatic and negative effect on rates. Do the math - a carrier has an office building, executive team, sales and marketing, operations, safety and dispatch.

Billy comes with his single truck and of course he can underbid everyone.

You never know who has impacted the rates with a load your hauling...at a discount. Might be someone here. It's also called the free market. The good, the bad and the ugly.

**jaminjim** · 01-11-2010, 04:36 PM

Aren't you also as guilty of being on the "board" as the people your talking about? When you get a load to a certain area do you call customers and other carriers and let them know your going into the area?

**blizzard** · 01-11-2010, 04:38 PM

I will aggree with some of what you said in your post Lawrence. But the major contributor to the downfall in rates has been a direct result of the bigger companies screwing over the good people who had once helped to build their customer base.

There are a lot of former Panther dispatchers, team leaders, and higher up executives who have either jumped ship or have been terminated only to take their vast experienve and customer knowledge with them to start their own companies.

The owner of T&K Nationwide used to be a dispatcher in Panthers Chicago office. I think someone noteable at Nations Express was once with panther. There are quite a few other folks out there who have left Panther and FedexCC to start very successful companies.

It wasn't but a few years ago we started to see a whole bunch of smaller companies began to open up shop. Some of these companies have now become big players in the expedite market. Companies such as Bolt Express and a few others.

More companies means more competition. There is no way around that. Also with it being of "no cost" to the carrier to lease on a cargo van driver who pays his own cargo insirance, this sort of practice is not going to end soon.

I personally think that the guys who work for multiple companies are intelligent. I have a few companies that I work with and they each have different freight lanes. I have one company that can get me out of michigan in hours and another company that can find me Railroad loads in California, Oregon, Nebraska, and other areas. So why would I deadhead out of one companies dead area if I have another company I can call and get a load from?

What is the difference between having your own authority and having to bid for loads from lets say one carrier "trying to get an extra 10 cents per mile" and lose it to another carrier who out-bids you? When all you have to do is trip-lease with the primary carrier that put the load on the board, take a 10 cent pay cut, but be guaranteed to get that load every time your truck in in the area? It's all perception.

**blizzard** · 01-11-2010, 04:49 PM

Now I would not recommend this to a larger straight truck, as you guys can do quite well with one of the larger or smaller operations. But to survive in a cargo van and make the amount of money that you really need to make, you have to think outside the box. I don't care if someone has the idea that one company can be trusted to make you money, Principles and hopes, dreams, and wishes will not put money into my bank account.

Also when working for several different companies in a cargo van, you are truly an independent contractor "as independent contractors are allowed to work with multiple companies" and you also have the right to refuse loads without penalty. You can also take a month off at t a time with no real recourse. My companies do not care if I take time off, they will just broker out a few extra loads or refrain from bidding on a load or two.

Like I said, it does not cost my carriers a dime to have me lease on as I will be paying my own cargo insirance. This just works out better for me.

**CharlesD** · 01-11-2010, 04:57 PM

Originally Posted by Lawrence

This has had a dramatic and negative effect on rates. Do the math - a carrier has an office building, executive team, sales and marketing, operations, safety and dispatch.

Billy comes with his single truck and of course he can underbid everyone.

You never know who has impacted the rates with a load your hauling...at a discount. Might be someone here. It's also called the free market. The good, the bad and the ugly.

The larger companies can also run at a smaller margin per vehicle because of the larger number of vehicles. I'm not lowballing bids for my units because I'm trying to pay a driver a competitive rate and still make a certain profit on the load. If I had 50 or 60 trucks out there I could make a nickel a mile margin on each one and still clear something, but I have to bid higher to try to clear .20 a mile for my efforts. I think more underbidding is going on with the larger companies. I got my authority to get a larger piece of the pie, not to make the pie any smaller.

**jaminjim** · 01-11-2010, 05:24 PM

I don't know if I'm reading things into what you are saying but it seems to me that one of you is complaining about people doing the same thing your doing. Another one of you thinks that the starting a company is the same thing as driving the rate lower, and yet another one of you thinks that the bigger you are the less you should charge.

**fastman_1** · 01-11-2010, 05:33 PM

I'm a vanner, I tried the lease to 2 company deal, it worked great till I was under a load for carrier A and carrier B called...sone the calls started to get further and further between....you can't serve 2 masters!

**jaminjim** · 01-11-2010, 05:44 PM

Originally Posted by fastman_1

I'm a vanner, I tried the lease to 2 company deal, it worked great till I was under a load for carrier A and carrier B called...sone the calls started to get further and further between....you can't serve 2 masters!

Just what is the process for being "signed" on with multiple carries?

**blizzard** · 01-11-2010, 05:47 PM

There is one company that I am gonna lease with in March that encourages you to work for other companies because they "state openly" that they can't keep you busy. The only think they ask you to do is tell then when you get loaded by another company and where you will be available once you unload. They do not get upset if you get loaded somewhere else because it does not cost them a dime to have you on their team. If this one company gets me 5 loads a month, they also make money off me. Only selfish companies get mad if you find a load somewhere else.

**geo** · 01-11-2010, 07:47 PM

i have a friend that has his own authory and he is a vendor for about 5 carrier, last week i need a 2nd person for a load that need a 2nd person to ride along and he called everyone and told them that he would not able to work for them today as he was on a job

what he did was who ever called him first that was who he worked for that day or for the moment
so you just have to let everybody know what you are doing