Expediting is a Business

[Florida]

> First, is it really a independent business if the carrier
>controls the pricing of the service? Second, if you are
>really a independent contractor, you should be able to offer
>your services to multiple carriers instead of just one. This
>is just food for thought, but with all the stipulations
>placed on a o/o by the carriers it looks more like a
>employer/ employee relationship. An example is how does a
>independent contractor get fired for a low acceptance rate?
>The contractor should be able to accept any amount of runs
>they desire.


re: Rate Price Fixing

That is relatively true not only with carriers, but brokers and shippers as well. Anyone who goes to OOIDA to obtain help in getting situated with their own operating authority, or obtains it on their on faces the same identical pitfalls of business operation.

As a small business owner, you can set your own rates; but the question remains will the shipper, broker, or carrier pay them or go down the road to the guy who hauls cheap freight. That is called capitalism, and the backbone of how America operates - from the largest MEGA-corporations down to the single man/woman business.

As a true independepent with 48 state common (or is that contract) carrier authority, you are free to offer your delivery services to any customer nationwide, set your own rate schedule, doing things your way - but at the price mentioned aove. You have competition. Those people want your business and will do almost anything to get it. Example: just look at those so-called "Burger Wars".

To focus on more transportation specific related issues, just hop over to any major carrier's web site and you will most likely see a little link to connect you to a "CARRIER" sub-section. Landstar has one. Schneider as well, and many more. They have a contract for "contract carriers" to sub contract and pull their customer's loads - all on THEIR terms. It's their shippers, and their liability as well in the event of any mishap, so they have their lawyers heavily word the contract in their favor, plus spec out the terms of what you must have in order to "qualify". I don't see that as a true independent, but just an offest of their leased O.O. section. In that situation - they have the customer, they set the rates, the set the demands for insurance, driver and vehicle specifications, etc. The Lanstar carrier agreement is nice in the fact that it has no "non compete" clause, and you are free to haul for anybody you want while transporting their loads. They both distance themselves from you and potential liabiliy, but also place controls on how you will transprt their shippers freight by making certain stipulations and demands on the amount of insurance coverage, what tpe of cargo "All risk broad form", insurance agency rating of B+ or better, etc. For some reason, Landstar will not accept OOIDA's insurance binder. Wonder if that was based on any of the civil court activity involved between them?

For you to become a true "Independent" in the true sense of the word you not only have to put on your truck driver hat, but you must also act and think like a businessman when directly negotiating with customers. That takes up precious time, and would be helpful to have a wife or girlfriend, relative, or hired employee to act as your office assistant while you're onthe road to totally focus on getting you situated with developing a customer base and getting your next load.

That's a little hard to do while driving through a snow storm and 100% of your focus is based on trying to keep the truck on the road and stay alive.

There is a very good article in this months issue of OVERDRIVE magazine. (go to www.etrucker.com) Feb 2007. Trucker of the Year. Man by the name of Henry ALbert. He is a shining example of a truly successful independent owner operator; does the whole 9 yeards by himself with the help of his wife. Pretty good reading material.
He is a single man operation who owns and operates ALbert Express, with the most important help of his wife to develop a customer base.
Page 22, article called "DREAM TEAM", picture of him and his wife in front of their $400,000 house and tractor.

As I noted, it is very hard to obtain and retain a loyal customer base. Image and attire is important, as well as an assistant to handle the office and administrative functions while you concentrate on the trucking aspect of proper loading, securement, vehicle condition, GVW, logbooks, weather and traffic conditions, and everything else that a typical "driver" has to contend with.

This guy contacts shippers directly. He sets his own rates, makes the deliveies, and collects the monies owed. He's smart enough to have it all down on paper in the form of a contract, which is part of the aspect his wife handles. and he basically is doing quite well. Unless that $400,000 house in the picture is fake, I'd say he has done a good job of operating a trucking business.

While he's not into the Expediting spectrum of trucking, his values hold true for all O.O's. Best part of all is that he made a decision to limit himself to not covering the entire countryside and going into the North Pole and down into Mexico, but focuses on staying within 500 miles radius of his house. Can't beat that with a stick.
he gets home just about every day, and makes a decent amount of money staying close to home, so he must be doing something right.

Check out this article, as it gives a good indicator on how to become a truly independent sole proprietor business. The key is that one person simply cannot do it all alone; you need backup. Having a wife around never hurts; plus correct me if I'm wrong, you might be able to TAX DEDUCT her salary as a paid W-2 employee from your gross receipts. Best of both worlds.

...just another one of my "trucker's manifesto" statements.

OOIDA MEMBER#: 708700

[bryan]

Hi

One of the reasons that companies do not give alot of perks is a few years back states such as Illinois started questioning our independent contractors status.The courts decided that if a carrier helps pay health insurance,fuel or maintanence then the owner operators are employees and can not deduct these expense on their taxes.Also the carriers had to pay half of the owner operators self employment tax.

Illinois had discussed makeing owner operators put their own name and address on their trucks in addition to the carriers name and city.Had this happened can you imagine the identity theft and insurance scandals we would be left open to.Crooks would have your name, address and license plate # which is all that is needed to get into your DMV records where they could get your SS# and CDL#.More than enough info to rob you blind.

[OntarioVanMan]

quoting Terry

If we can each agree that expediting as an Owner/Operator is a business, then why can't we each agree that success in this business is best reached by being adequately capitalized. That is having sufficient reserve funds to pay all operating expenses to accomplish the work for which we are contracted. It seems that lately, we are reading an increasing amount of posts where people want to enter this business on someone else's dime. So many people seem to want a carrier to provide benefits, or access to carrier resources that are typically provided to employees, not contractors. They want carriers to provide advance money for fuel or food, or for truck repairs in advance of work performed. They want carriers to respect the fact that they are independent contractors and then want carriers to help out with problems that are clearly outside of the terms of their lease agreement.

Very good post Terry...I mentioned in another thread a few weeks ago about just this very thing lately..where more and more drivers expecting the Carrier/owner to help bail them out when working capitol has been exhausted.

I have personally witnessed this where the driver next to me has been on thier last tank of fuel and not enough for a cup of coffee!

In some cases recruiters are to blame to get thier quotas of trucks. But mostly bad business management accounts for the rest.

I wish you all luck!

[BillChaffey]

Clearly Expediting as an O/O is a business. Whether going into business with your own Vehicle or driving someone Else's. Either way the Prospective O/O needs to do his or her investigation of the Business. BUT just as clearly the Expediting Companies SHOULD have the courtesy to try and explain at least the basics of the businesses the prospective O/O is getting into.