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Leased on with multiple carriers

Discussion in 'General Expediter Forum' started by Ernest1982, Mar 1, 2012.

  1. Ernest1982

    Ernest1982 New Recruit

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    I was wondering if anyone could explain how this works, some Q: are how many carriers could you be with, obviously the plus side is less down time but what and if there are any negatives.... if being leased to a few carriers for an o/o is something like for a person with his own authority to have access to multiple load boards ....
     
  2. mxzane933

    mxzane933 New Recruit

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    Message me n ill tell u how i do it


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  3. ATeam

    ATeam Senior Member

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    I'd like to hear more about this too; not privately but publicly where the concept can be explained and discussed.

    I'm aware of the business model where an expediter gets his or her own authority (thereby becoming a carrier) and then contracts with larger carriers to bid on the larger carriers' loads and haul their freight. To the larger carriers, the smaller carrier is known as a partner carrier, outside carrier or some such thing.

    But for someone who does not have his or her own authority, how is it even possible to lease your truck to multiple carriers?
     
    Last edited: Mar 1, 2012
  4. jelliott
    Thinking

    jelliott Veteran Expediter Motor Carrier Executive

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    Vans don't require their own authority. So they get their own liability and cargo insurance policies. They then sign up to run for multiple carriers. While some of these carriers are good, many are not. Many are far undercapitalized and you will see many threads on here about owner operators waiting a month, two or more to get paid. From the numbers I have seen posted I do not see why this would be a great choice of a business model. As well I believe it hurts the industry as a whole and does nothing but help shippers by creating artificial capacity. The majority of the carriers that run vans under this model rely highly on bid boards. So if a van is signed on with 3 carriers and gets empty n a certain city, he notifies all 3 he is empty and available. All 3 will look to bid freight for him. Often times these carriers are bidding against each other for the same load for the same vehicle, thus is benefits the shipper or load board by driving down the rate. Their are not 3 carriers with 3 vans bidding, it is 3 carriers with 1 van bidding. Thus the artificial capacity and ensuing rate deterioration.

    As well I can not help but question someone wanting to run for a carrier working out of his house, factoring the loads, and carrying little to no in house insurance, and paying the truck 30 day or more later. If the barrier to entry into a business is too easy, beware dumping it and getting out is even easier.
     
  5. kwexpress

    kwexpress New Recruit

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    I have done this and I wouldnt say its always means less down time.you need to be very careful and take a look at what your doing to the industry as a whole.every single carrier thats lets you run for others is posting your truck on the same system as being available in the same city.
    this throws a wrench into things it makes the customers think there is an excess of trucks in that area and they will want to move the freight cheaper thinking they have an abundance of trucks to pick from they will shop around for the cheapest and get bids from the cheapest carriers.that same load that would have paid $1.50 for a van if there wasnt 4 other bottom feeders with a van the same distance from the shipper is now moving for $1.08 to the carrier and now your moving the same load you would have made more of a profit had of you not been screwing yourself from the get go.

    an owner op is much better off to find one carrier that pays a decent rate to begin with and as a bonus will let you find your own freight and run it under that company name.
    not plugging anyone in particular but I know panther does it and no I dont have any leased with them as their cargo van rate isnt high enough but I would say thats due to all the fake compettion going on.
     
  6. mxzane933

    mxzane933 New Recruit

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    Yeaa what they said.

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  7. UncleTed

    UncleTed Banned

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    While I agree with the bulk of what you say, isn't this type of diversification the American Way? Unfettered free enterprise allows for competition which, in turn, drives the rates down. Unless some sort of government regulation is enacted, I see this as a growing segment of our industry. I for one do not want to see that. Tis a double edged sword to be sure.
     
  8. ATeam

    ATeam Senior Member

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    In the event of a freight damage claim, against whom would the shipper make it? How would it be processed?
     
  9. greg334

    greg334 New Recruit

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    Ted I see this already in the TL/LTL world, of which we are more a part of. With the claim of cheap fright and unfettered service chains, we at the end of the service chain see the results and many can't handle it.

    Phil brings up a great point, but what about the damage claims?

    I am assuming that it can turn into a nightmare.
     
  10. CharlesD

    CharlesD Active Expediter

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    John hit the nail on the head. I don't see this as a positive at all. Even if your carrier doesn't allow that, here's what might happen. I have a van sitting in Fort Wayne right now and we're the only carrier he's signed on with. If I see a load posted in that area that I want to bid on, one thing I'm going to do is go into Sylectus and see how many other cargo vans are posted in that area available. I'll then bid accordingly, assuming I'm bidding against that many other companies. Even though my driver is only signed on with me, the number of available vehicles I see listed in there might not accurately reflect the number of actual vehicles that are parked there. You have more people bidding on a load than the number of vehicles available. I'd like anyone to explain how that isn't going to drive the rates down.

    As to the insurance, my agent explained it to me. The driver has his own cargo and the carrier is listed as additional insured. The driver's policy would pay first in the case of a claim with the carrier's policy kicking in if needed.

    As to the working out of the house and factoring, I don't see how the office setup I have in my house can't work as well as if I were to go out and spend money on renting an office space, and hiring staff would cost as much as factoring. It just means that my wife and I have to do everything ourselves and we get woken up at all hours of the night for position updates when freight's moving. Whenever we have loads running at night we say that we're going to be sleeping like babies that night, waking up every couple hours and getting cranky.
     
  11. mxzane933

    mxzane933 New Recruit

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    The reason why i said pm me was to send my cell. Cuz it would be easier to tell than type. :)

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  12. ATeam

    ATeam Senior Member

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    I think I understand better now what happened once with a truck we cross-docked with at a FedEx facility back when we were with FedEx Custom Critical.

    The load was going into Canada but FedEx could find no one who was willing or able to go from the southern state in which the load picked up. We were in New York at the time and did not buy into dispatch's speech about how important this freight was for a very important customer and how we should deadhead south to get it at a money-losing rate. Later, a truck was found to do the pick up down south. We were dispatched to drive a few hundred miles to Pennsylvania to meet that truck at a FedEx facility to cross dock the freight onto our truck and take it to the Canada delivery.

    Late in the night the truck arrived. It was a retired Penske cube van with a cabover cab and no sleeper. There were no markings of any kind; no company name, no DOT number, no IFTA sticker, nothing. The tires did not match, leading me to believe that the truck's owner buys used tires when the more-used tires on the truck give up the ghost. The load was a light load by straight truck standards but clearly overweight for the van, such that it rode so low on its springs I thought one might break. The truck was dirty -- as in not washed for six months dirty -- rusty, and the paint was coming off in chunks. The driver was a good-natured guy but spoke almost no English. He was from Hungary, Romania or some such place.

    Because his truck was not dock high, we parked the two trucks next to each other in the lot and a fork lift came out to transfer the freight. When the truck door was opened, I saw that the large piece of freight had not been secured at all. Gravity and friction alone held it in place, if it stayed in place after being loaded. I don't think it did because it was too far forward for the forklift to reach it. The driver had no pallet grabber, bale hook or other freight handling equipment. At my suggestion, the fork lift driver lifted our pallet jack down from our truck and I used it to move the piece to the rear of the cube van where the fork lift could get it. The other driver did not know how to use a pallet jack (or maybe pretended he did not know).

    With the freight now on our truck, we guided the driver through the paperwork, using sign language to indicate where he should put his signature. He had no idea what he was signing or what copies he needed to keep. Having had his freight handling problem solved and paperwork put in good order by us, he went happily on his way.

    We went happily on our way too but wondered to this day, how in the world could FedEx Custom Critical come to put important freight on a truck like that? Now we know.
     
    Last edited: Mar 1, 2012
  13. Ernest1982

    Ernest1982 New Recruit

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    Are these vans just with their own liability and cargo insurance able to find their own loads? If so, how are they able to present themselves with out DOT# and MC#, i mean how are the brokers or carriers supposed to know about them as far as safety goes (how safe the equipment, how safe the driver, what his reputation is with timing, etc) ......
     
  14. CharlesD

    CharlesD Active Expediter

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    They had brokered that leg to an outside carrier most likely and that other carrier apparently wasn't too picky about their equipment.
     
  15. ATeam

    ATeam Senior Member

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    We knew about brokering loads to outside carriers. What confused us was the lack of markings on the truck. The expedite vans we had seen before had always been identified with a company name and had DOT numbers.
     
  16. UncleTed

    UncleTed Banned

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    One way is to approach a customer yourself, assuming you are not under contract with a carrier stipulating you will not approach a certain customer. Vans are not governed under the auspices of the Federal DOT. There many couriers who also haul smaller loads which could be defined as "expedite loads". These companies do not generally have DOT authority. Unless you are hauling HAZMAT or some other regulated commodity, you are within the law in hauling just about anything you want. If you have decent negotiating skills, you could easily contact shippers and work out your own deal with them...Even if you happen to be from Hungary, Romania or "some such place".
     
  17. CharlesD

    CharlesD Active Expediter

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    A carrier can't even get a DOT number unless they have vehicles signed on that are over 10k gvw, so if a carrier only has vans or is one guy with his authority, there isn't even going to be a DOT number. Signage also isn't required for under 10k.
     
  18. 350rocket

    350rocket New Recruit

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    Negative: you create an artificial supply where you're at. Carriers you're signed
    on with may bid cheap against each other to win the bid for you. You
    may have decreased chance of getting it though as other drivers in the
    area may be signed up with multiple carriers as well. The only guarantee
    with having multiple carriers is the rate is probably gonna drop.
     
  19. jelliott
    Thinking

    jelliott Veteran Expediter Motor Carrier Executive

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    Charles my comment about working from home was intended as just one possible piece of a very thin company. No primary insurance or on one imaginary vehicle, factoring, and a number of other items just make it too easy in my opinion for someone to close up and burn the trucks. I am in no way saying that this is the case for everyone, but in general the greater the investment and risk a business takes, the harder they work to persist and survive. Much like how more brokers disappear than carriers do. Even shippers know that and often prefer asset based carriers, with more skin in the game.
     
  20. ATeam

    ATeam Senior Member

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    So it's literally true that there is more to expediting than meets the eye.
     

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