Moving forward to your own authority…

[lugnut1]

The following is a brief chronology of our journey through expedite/trucking. Our steps forward maybe food for thought for those of you who are seasoned owner/operators with both the means and desire step to the next level of freight transportation.

A. We got our Class A licenses in the fall of 2006 after paying for truck driver schooling.
B. Signed on with US Express as a Team.
C. Drove several months with US Express and decided we wanted more independence than US Express offered.
D. Spoke with Bob and Linda Caffee about their truck and expediting at the 2007 at the Expediters Expo. They were very helpful.
E. We chose, bought and customized our truck 2.5 years ago.
F. After taking possession of our expedite truck we spent two months tricking out and playing with our new motor home/expedite truck.
G. Leased ourselves and our truck to an expedite company that advertises here on EO.
H. Stayed with the same company for one year almost to the day. May of 2009
I. Started our own company several weeks after leaving the leased onto company. Leased a virtual office, formed an LLC and created a trust to protect our personal assets from possible entanglement from a possible accident or suit filed against our new carrier.
J. Attained our FMCSA authority July 22 2009 and pulled our first load on August 18th 2009. It paid 1.65 per mile for all miles. Trip was 982 miles.
K. Joined a variety of loaded boards, many which offered no additional loads as they duplicated loads we were already seeing through the DAT network.
L. Applied for carrier partnership with most every major carrier/broker you can think of.
M. Find tuned our operations by looking for new opportunities for small carriers and decided becoming an Indirect Air Carrier / IAC would be possibly useful going forward.
N. Contacted NLM to become carrier partner. Not accepting at this time.
O. Became an approved IAC in October 2009.
P. Joined Sylectus alliance November 2009. Was known previously as GPS411
Q. Contacted by FedEX CC because we were identified as potential carrier partner because we are an IAC.
R. Contacted by NLM to become partner carrier. Accepted offer.
S. Partnered with FedEX CC
We continue to look for ways to enhance our 1 carrier truck operations but we are as busy as we want to be at this point. We go where we want, when we want and at the rate we want. We have never been stiffed on a freight bill though our collections department (us) has made only two calls over the past year to ask where’s the check.
Comment all you want about what we have done.
Life’s adventure is limited by only your fears.

 

[TeamCaffee]

Wow that is very cool! Congratulations you guys for thinking outside of the box.

 

[pjjjjj]

Thanks for sharing, I'm sure that will be very helpful to many who may be considering the move to independence.
It's good to hear that things are working out well for you too! Congratulations!

 

[lugnut1]

Wow that is very cool! Congratulations you guys for thinking outside of the box.

Thanks Linda and Bob for your comment.
One of the “Cool” expansions we are looking at is creating a “cooperative carrier” where owner operators like yourselves could become a “carrier cooperative member” and have immediate access to freight for hauling without climbing the normal hills of getting your own authority.
The “cooperative carrier” idea has potential because it eliminates the dispatcher/agent from the system so you deal directly as a carrier for freight not as a driver. Mature owner operators IMO would like to pick and choose where, when how much they work during the year but no business offers it, yet.

 

[davekc]

Panther and Landstar come close, but you have to supply your own loads. If someone else is providing the loads, then you are essentially the carrier or a broker.

 

[ATeam]

The following is a brief chronology of our journey through expedite/trucking. Our steps forward maybe food for thought for those of you who are seasoned owner/operators with both the means and desire step to the next level of freight transportation....

... We continue to look for ways to enhance our 1 carrier truck operations but we are as busy as we want to be at this point. We go where we want, when we want and at the rate we want. We have never been stiffed on a freight bill though our collections department (us) has made only two calls over the past year to ask where’s the check.
Comment all you want about what we have done.
Life’s adventure is limited by only your fears.

By intent or accident, each expediter finds one's own way to operate in the industry and own path to follow. I applaud the determination you demonstrated as you found your way and move in a direction that you consider to be forward and upward.

Please understand that I intend no disrespect in what I am about to say. Again, I applaud your determination and the fact that you achieved what you set out to do.

Kindly note that what works for you does not work for everyone. Because our circumstances and goals differ from yours, Diane and I would consider getting our own authority to be a step backward, not forward.

I highlight for readers our also-successful career path, not as a recommendation but as a contrast to consider along side of lugnut1's. There are many ways to succeed in this industry. Ours is but one of many.

1. Working as professionals in white-collar jobs, and having never driven a truck before, we got bit by the truck driving bug.

2. Researched trucking for months but found no fit.

3. Discovered expediting by stumbling upon the EO booth at the 2003 Louisville truck show. The booth was staffed by the McCords and O'cConnells at the time. They introduced us to expediting and directed us to the expedite carrier exhibits where we spent the rest of the show.

4. Self trained and got our Class B CDLs with air brakes and HAZMAT endorsements.

5. Chose FedEx Custom Critical among many other carriers then considered because we liked their emphasis on safety and trusted the company name.

6. Entered the business as drivers of a fleet owner's White Glove, reefer truck. With that fleet owner's help and by successfully completing an interview with by White Glove people at the carrier office, we were White Glove flagged our first day on the job. (It was a good decision. We have made the company a lot of money and served the customers exceptionally well).

7. Drove fleet owner trucks for three years.

8. Purchased and began driving a custom-built truck of our own in 2006, the truck we still drive today. Paid it off in just 23 months with our expediting earnings.

9. In our now seven years of expediting, we have not "moved forward" at all, but been with the same carrier, in the same division the entire time.

We are debt free. Our net worth is higher than when we entered the business, such that there is no doubt that we made the right financial decision when we left good white-collar jobs to team drive a truck. Revenue dipped significantly in the recession but seems to be recovering now.

There is a high price to pay when you run a carrier's freight instead of getting your own authority. The carrier keeps a big slice of the pay each load earns. The benefit is the sales support and services the carrier provides in return, which for us is huge because it keeps us from having to deal with the business complexities cited by lugnut1 above.

We got into this business not only to make money but also to simplify our lives. Our carrier charges a pretty penny to deal with trucking authority issues. It is a price we happily pay because it frees us from having to do that work.

Like lugnut1, we are as busy as we want to be. We go where we want, when we want and at the rate we want. (Not that we get $4.00 a mile for every load but that we decline loads that pay too little.) Nor have we ever been stiffed on a freight bill (settlement) though our carrier.

There are several other reasons we remain with our carrier of choice. They include interesting freight that takes to interesting places, freedom to go out of service at will and for extended periods without fearing a loss of business when we return, the benefits of brand (FedEx) recognition as we live and work on the road, and more.

As I said, there are many ways to succeed as an expediter. What is a step forward for one may be a step back for another. What one sees as an asset, another may see as a liability. What one considers fun, another may consider drudgery.

To each his own.

 

[lugnut1]

Panther and Landstar come close, but you have to supply your own loads. If someone else is providing the loads, then you are essentially the carrier or a broker.

Dave, I’m sure you already access most freight opportunities we access ourselves. Think of our “cooperative carrier” idea as an elimination of the owner operator being treated as “RoboDriver”. A “cooperative carrier member” would book, bid, create freight opportunities for themselves in real time by accessing real time freight.
I’m not sure, but certainly many owner operators may be surprised to know that while they wait patiently for a load offer from dispatch a load they could and would have taken does not get offered to them because dispatch is working with another owner operator on a load.
We are proposing that “carrier cooperative member” would see the same loads as dispatch with one major difference, an owner operator would not have missed the load as in the example above because they are focused on their truck not 5, 10 or 25 trucks which often what a dispatcher is trying to take care of.
The “cooperative carrier” idea would not bode well for dispatcher jobs, but last time I checked owner operators like Bob and Linda Caffe, Phil and Diane Madsen do not need a dispatcher, they need to see the loads being offered in real time on their terms

 

[davekc]

A model of looking at the loads can be found at Landstar. That of course are there own loads. If you have many "members" in a area, how and who would determine what load is awarded?
You could have a bid process, but that would mirror working off of load boards. Or it would seem.
In my case, there are no dispatchers involved when I book my own freight. I basically am the dispatcher short of faxing or emailing the load to Panther. It is then issued a pro# and sent to the truck. I am only looking at my specific trucks unless I am doing a favor for someone.

 

[roadeyes]

So basically what you are saying is that you would still be leased to a carrier but that carrier would be responsible for providing the authority only, and would take a smaller percentage similar to that of a freight broker, and you as an o/o would provide everything else and be responsible for finding your own freight on the loadboards that the carrier is a member of?

 

[greg334]

That of course are there own loads.

Dave, I think this needs to have an * next to that. A number of loads from the board(s) seem to come from outside the agent system (meaning a bid board) and a few are repeats of the same load with different rates.

 

[davekc]

Dave, I think this needs to have an * next to that. A number of loads from the board(s) seem to come from outside the agent system (meaning a bid board) and a few are repeats of the same load with different rates.

Makes total sense. If someone wanted to "simplify" their life, this would seem much easier than battling constant load offers that aren't profitable.

 

[ATeam]

The “cooperative carrier” idea would not bode well for dispatcher jobs, but last time I checked owner operators like Bob and Linda Caffe, Phil and Diane Madsen do not need a dispatcher, they need to see the loads being offered in real time on their terms

I can't speak for the Caffees but can say what Diane and I need. We need freight at volume and rates sufficient to make a profit and meet our financial and non-financial expediting goals. Already having that it in our present carrier relationship and centralized dispatch system, we are not looking for or needing anything else.

Frankly, I don't want to see loads being offered in real time because I don't want to take the time to search for freight. I've seen those systems in use. It's not like the world is waiting for you to say yes or no to a good load that is on the board before others get their chance. Seeing good loads on load boards in real time often means seeing those loads go to someone else because they said yes a split second before you.

Our carrier's sales force, agents and dispatchers find freight for for us and it works. We don't always get the loads we say yes to, and it disappoints when that happens but, notwithstanding my recent complaints about repeat load offers, the system works for us. I have other ways to spend my time and waiting for the beep is our preferred way to received and respond to load offers.

 

[lugnut1]

So basically what you are saying is that you would still be leased to a carrier but that carrier would be responsible for providing the authority only, and would take a smaller percentage similar to that of a freight broker, and you as an o/o would provide everything else and be responsible for finding your own freight on the loadboards that the carrier is a member of?

You understand perfectly.


Thanks for the comments from each of you. I/we seldom post at the EO due to time to constraints. We expect a few readers may well gain a view that we chose a very different route in trucking than others would desire you to follow. And while our route is not accessible to all who want to follow, consider this. We believe the larger players in the freight industry will continue to move forward in finding ways to put their freight in the hands of partner carriers over hiring owner operators and individual drivers.


Phil, maybe this will help you see why we believe the above. Since you have dabbled in the stock market you may now understand that much of the money made there daily is made by those who make markets. Often referred to as mm or market makers. We believe big freight players like FedEx are moving toward an electronic venue where they and others are 100% market makers in freight. After all, isn’t it better to trade in stocks than to own them. Better to trade in freight than to own it.
Be Safe out there.

 

[chs007]

You may want to try Landstar broker agreement. Panther's bid board and Active areo

 

[pjjjjj]

You understand perfectly.

What you're proposing then, is to have OOs sign on with a carrier (say yourself), operating under your authorities.. and your insurance.. and your safety histories.. etc.... ?

You would pay for the various expenses, such as load boards, (which can be very expensive depending on which packages you get).. and cost of authorities, yearly payments to different states, .... all those costs that really add up for a one-horse carrier.. ?

The OO would pay their own insurance, license, etc.. even though under your master policy?

You would do the ACEs for the OOs or they would do themselves?

You would give access to the load boards... and the OOs themselves would do their own bidding but as a representative of your carrier company?

They would do their own paperwork to finalize the loads?

They would do their own communicating/updating with brokers, customs brokers, receivers, whatever, as needed?

You would charge a smaller than usual percentage of each load?

You would take the hits on your safety/insurance records in the event any of the OOs get in an 'incident' or damage freight?

Would you do the invoicing? What about collections when/if needed?

Would the OOs need to wait until the payment was received until they received their payment?

How would you handle the credit-checking part of things? ie if there are certain companies you wouldn't want your OOs to deal with?... if a company doesn't pay, are both you and the OO out the money, or would the OO need to pay you your percentage regardless?

Would you make 'factoring' available to the OOs under your carrier name?

Sounds interesting.. as long as you can keep your hand on QA.

 

[ATeam]

Phil, maybe this will help you see why we believe the above. Since you have dabbled in the stock market you may now understand that much of the money made there daily is made by those who make markets. Often referred to as mm or market makers. We believe big freight players like FedEx are moving toward an electronic venue where they and others are 100% market makers in freight. After all, isn’t it better to trade in stocks than to own them. Better to trade in freight than to own it.
Be Safe out there.

I can't say much about the direction of freight brokerage and the big players because I have not researched it and I am not involved in it (by choice).

I do know a bit about market makers in the securities industry and know that they have a turnover rate and success and failure rate just like every other business. There is nothing in the market maker's world that gives them a special edge for success.

You have to be good to succeed as a market maker and those who are not good enough wash out. I suspect the same is true in freight brokerage as it is in most business opportunities.

There are people right here in the open forum who have moved from running under a carier's authority to running under their own authority and moved back to running again under a carrier's authority. If own-authority running was the best option for everyone, everyone would be doing it.

That takes nothing away from you. I wish you the very best and hope you make a gazillion dollars with your approach. It's just that your original post illustrates the down side of what you are doing. It requires a special skill set, body of industry knowledge and persistent commitment to make it work. For those who revel in such things, that downside is actually the upside in which they find great personal satisfaction and take great pride. More power to you, I say; and please excuse me while I go wait for the beep.

 

[CharlesD]

Your cooperative idea is very similar to how some of my owner/operators work. I have some guys that I trust enough to look for their own freight, but I have other drivers I would never trust to do that. Some of them wouldn't even want to. Since I've had guys going this way for a while, I can say that it has its benefits and drawbacks.

For one, I don't have to worry as much about looking for loads for those drivers. I just sign the rate agreements when they come across the fax and some of the other administrative stuff that needs to be done like negotiating dry run money and stuff like that.

Where it can be a problem is if you have more than one unit in the same area. If both units are looking for their own freight, you might have both of them submitting a bid on the same load and if one has been sitting there longer, you might have to step in and mediate, especially if the broker is ready to award the load.

That's why I'm going to limit the number of my owner/operators I allow to run that way. When you're small it's easy, but with more units it might be harder to ensure first in first out in certain areas. Having those few people who have access and look for loads is a big help for me though since I'm still driving. Being on the road and trying to manage all the other things a carrier has to can be a bit of a pain at times.

With that said, I wouldn't go back to being leased on, but I can understand why some want to run that way. You have more free time when you're not under a load. If I want to do anything on my off time like go to a ball game, a movie, the gym, etc., I have to make sure I have someone to keep an eye on the computer and answer the phone. I like being my own carrier, but it's not for everyone. If you put in the work and cultivate the right contacts, it can be very rewarding.