A great blog from our very own Shelly Benisch on this topic!
Multis - The Good, The Bad and The Uglies - MCs
Multis - The Good, The Bad and The Uglies - MCs
Should you run for Multiple Carriers? Read this first!
- Thread starter Lawrence
- Start date
Great article! Outstanding....
golfournut
Veteran Expediter
The "multi" model may be a fairly new model to expediting, but to the trucking industry it's not.
The trucking industry has been using the "multi" broker model for 40 + years. It has been a very successful model for many independent o/os.
As in all things in life and other industries, some do things the right way and some don't. It shouldn't be a surprise that there are some that don't do it the right way in the expediting sector.
The trucking industry model tends to be a multi broker model vs the multi carrier model in expediting.
I think it is safe to say that all carriers have a brokerage dept, but not all brokers are carriers.
Some carriers like Schneider and JB Hunt (to name a few) have multiple brokerages to deal with specific commodities and modes.
The carriers, thru alliances, move each others freight using their assets, owned or leased. Usually these companies are set up properly and are doing it the right way.
However, that doesn't mean a one off operation can't also do it the right way. Whether "leasing" on with multiple carriers or using the broker model. Does it take more work, absolutely. Is more risk involved, sure. Is there more rewards? That is the question that has been debated on here and in the trucking industry for years.
Like other industries, there are successes and failures.
The trucking industry has been using the "multi" broker model for 40 + years. It has been a very successful model for many independent o/os.
As in all things in life and other industries, some do things the right way and some don't. It shouldn't be a surprise that there are some that don't do it the right way in the expediting sector.
The trucking industry model tends to be a multi broker model vs the multi carrier model in expediting.
I think it is safe to say that all carriers have a brokerage dept, but not all brokers are carriers.
Some carriers like Schneider and JB Hunt (to name a few) have multiple brokerages to deal with specific commodities and modes.
The carriers, thru alliances, move each others freight using their assets, owned or leased. Usually these companies are set up properly and are doing it the right way.
However, that doesn't mean a one off operation can't also do it the right way. Whether "leasing" on with multiple carriers or using the broker model. Does it take more work, absolutely. Is more risk involved, sure. Is there more rewards? That is the question that has been debated on here and in the trucking industry for years.
Like other industries, there are successes and failures.
I do believe she said there are some that do it right....
golfournut
Veteran Expediter
She did, somewhat. I just wanted to make it clear that this is not a new concept. The insurance challenges addressed in the article are not a challenge in the big truck sector. Maybe the cost is to some, but the product is readily available by many.
I'm guessing, but probably due to the different types of vehicles expediting uses. Vans, Sprinters s/t. The big truck sector, I think, is going to be based on the type of trailer you pull and the commodity.
I'm guessing, but probably due to the different types of vehicles expediting uses. Vans, Sprinters s/t. The big truck sector, I think, is going to be based on the type of trailer you pull and the commodity.
My opinion hasn't changed since this has started. For the rate the "bottom feeders" haul at, the exposure and costs are too high verses the return. If one wants to haul for other carriers, get with a carrier that allows you to run under their authority or get your own. The article is correct in that they are cracking down on the rouge operators and companies so much of it is coming to a end in the near future.
It's just a new concept to expediting and after some time it may replace the exclusive use concept for vans and sprinters. Might be a good change but only time will tell.
golfournut
Veteran Expediter
I agree, gotta make a decent profit. The rates we run for being leased on with carriers isn't always adequate to provide a decent profit. But the expenses are lower when not having to maintain your own authority and insurances.
The bottom feeders have to cut back somewhere to make a profit. Maintenance and insurance are the 2 areas that you can control a vast amount of spending on.
there seems to be two different routes of multi's....fastrod....we are talking about trying to get rid of the ones that are under insured and misrepresentation...
golfournut
Veteran Expediter
Somewhat new to expediting. But expediting is a fairly new concept compared to the big picture of freight transporting.
The problem is finding the brokers that want to handle expedite freight for vans and Sprinters. Being a partner carrier to some existing may be the nearest model you could get.
golfournut
Veteran Expediter
I have 2 neighbors that have been in trucking for over 40 years, each.
Neither have ever worked or leased on with a carrier.
One, ready to retire so works seasonal, has a local customer hauling apples. He has 2 brokers that he has worked with for a long time. Each work in specific areas or the country. When he gets a load of apples, he calls the appropriate broker to find him a load back. And the circle continues. He makes enough to by a new truck every 2 or 3 years for cash and lives very well and works 7 months a year.
The other is about the same. He uses 3 brokers. Spends a little more time otr instead of coming straight back.
I met a Sprinter o/o in Atlanta last year. He was leased to LS for about 6 years. He has been doing about the same thing. He has a couple of local customers and partner carriers with a few or just DHs back. The loads out pay enough to afford that.
Neither have ever worked or leased on with a carrier.
One, ready to retire so works seasonal, has a local customer hauling apples. He has 2 brokers that he has worked with for a long time. Each work in specific areas or the country. When he gets a load of apples, he calls the appropriate broker to find him a load back. And the circle continues. He makes enough to by a new truck every 2 or 3 years for cash and lives very well and works 7 months a year.
The other is about the same. He uses 3 brokers. Spends a little more time otr instead of coming straight back.
I met a Sprinter o/o in Atlanta last year. He was leased to LS for about 6 years. He has been doing about the same thing. He has a couple of local customers and partner carriers with a few or just DHs back. The loads out pay enough to afford that.
Does he have the required insurance for his partner carriers and HIS customers?...
golfournut
Veteran Expediter
I don't honestly know the answer to that question. Based on what little I know of him and the partner carriers he uses, I would say so. But I could be wrong. Maybe he sold me like he sold the others.
So how do you know who is under insured?
My operating authority requires me to maintain a policy with $300,000 primary liability. Some on here claim you need no operating authority to expedite on your own in a van so how how would you know how much insurance they are required to have.
Most have insurance if they are driving a regulated vehicle. But on vans or under 10k trucks, some are running around with just a basic auto policy. Insurance company is clueless that they are hauling freight with it. All kinds of gaming going on with load insurance as well. I am aware of a few that buy a policy for a year, cancel it, get a refund, and run on the paper until the following year. Some of it pushed by bargain carriers as well saying they have insurance but really don't.
You don't see very many straights and tractors in expediting doing the multi-carrier model. At least not without having their own authority, which is what's happening in general trucking. It's the vans running under a multi-carrier model authority with too little insurance that's the new thing in expediting.
You'd think there would be some kind of central database to check up on insurance policy numbers.. To make sure everything is current.
Problem is carriers or brokers only see the cert for the carrier. In a full carrier model that covers the whole fleet so it is easy to verify. When the trucks get their own policies such as in the multi can model the artist does not see the cert for them. Now the carrier is generally signing a contract and showing a cert for 1 million liability and 100k or more cargo. But them he is putting it in units that are on their own policies that do not meet these requirements or have exclusions. Often hauling freight for hire or going over 300 miles are excluded items! The multi carrier often know what is happening and it is misrepresentation and fraud. Not all do this but many are.