Is It Worth It?

[Moot]

When the pie is split 3-5 ways, do the math.

Is it worth it, as a single cargo van O/O to be leased to a large carrier? I've been kicking this around in my head for a long time as I see more and more of my loads coming through 3PLs and load boards. I would estimate that 70% to 80% of the loads I haul are from 3PLs and load boards. That estimate is based on what little info I get from the load offer or the BOL. The actual number is probable closer to 90%.

If my carrier's main customers are now 3PLs and load boards is it worth it to be leased to them? Could I do better working with a single small "handler" that did the load board and broker thing by booking, dispatching and billing?

As a single van O/O leased to a carrier I am subsidizing a large enterprise that includes a safety and compliance department and other departments that deal with CMVs of which my van is not. I pay about $50 a week for this privilege (QC fees have recently dropped from $35 to $20) and this does not include bobtail insurance.

Some of the benefits of leasing on with a large carrier are financial stability, access to more and larger 3PLs and load boards, paid cargo and liability insurance and really cool logos and signage.

Working with a small "handler" requires the O/O to provide cargo and liability insurance. In theory, the "handler" should be able to under-bid a large carrier and yet pay more to the O/O because the handler's operating expenses and overhead are much less. Of course a large carrier can go cheap and still make money on volume.

Enough rambling. How about an intelligent discussion of the pros and cons of leasing to a carrier vs. working with a "handler". Please limit the discussion to van operations only.

Is there a better term than "handler"?

 

[Murraycroexp]

Yes. Most of the time the math works. We have our share of crappy weeks, but there's something to be said for small over large. IMHO.

 

[OntarioVanMan]

with a small "handler" you can set your rate as to YOUR own CPM....presently you and I can not....with that flexibility you can keep rolling out of weak freight zones...

 

[guido4475]

Too much screwing around with a small carrier. I mean small as in carriers that may be run out of a house, trailer, barn, etc...I've been with quite a few of them...I've seen and heard it all from pot veing smoked while dispatchers dispatching to hard liquor being consumed at 10 in the morning. Even called once to see if anything is going on and got the answering service. On a friday afternoon. They actually wentvto a baseball game. Imagine that. With a large carrier there is a chain of command in place. It seems so much more organized. More militant. Just my thoughts...and experiences.

 

[OntarioVanMan]

Too much screwing around with a small carrier. I mean small as in carriers that may be run out of a house, trailer, barn, etc...I've been with quite a few of them...I've seen and heard it all from pot veing smoked while dispatchers dispatching to hard liquor being consumed at 10 in the morning. Even called once to see if anything is going on and got the answering service. On a friday afternoon. They actually wentvto a baseball game. Imagine that. With a large carrier there is a chain of command in place. It seems so much more organized. More militant. Just my thoughts...and experiences.

or they are down in the driveway having a smoke every 20 min or down doing xdocks when they should be looking for loads.....yeah right

 

[ebsprintin]

in theory there should be a legitimate advantage to the small operation. the problem with small is the ease of entry into the business that is similar to the ease of getting into trucking with a cargo van. the results are a glut of competition and a lot more of a mess to weed through to find the gem.

it seems the small operator will be more a regional player like a step above a courier service. sort of like the guy who scarfed up everything in chicago for a while.

it also sounds like the smaller kind of operation that sylectus used to cater to.

eb

 

[ebsprintin]

going forward the problem with the small operation is whether they can survive regulation. the bureaucracy is not getting smaller.

 

[xiggi]

As more and more small and independents have come into the industry things have gone to crap. This tells me what I need to know about their pricing.

 

[OntarioVanMan]

As more and more small and independents have come into the industry things have gone to crap. This tells me what I need to know about their pricing.

But they can have the same pricing as us.....they have less overhead and still get a buck or more a mile....but they can bid less and win more loads and still pay themselves a buck a mile....I mean a big carrier bids what? 1.60? 1.70?..... small guys can go 1.20 and make money at that...

 

[xiggi]

Yes it's easy to run a company underfunded... for a while.

 

[OntarioVanMan]

how do you figure that?....1 man operation bids $1.25.....big carrier to cover costs has to bid 1.60.....little guy wins....most of the time...

 

[davekc]

A small carrier can be more competitive when just looking at bid boards. But as mentioned, regulations are shoving a bunch of them out, or they turn into a more rouge outfit. Look how many have come and gone that use to advertise here. The bigger ones can operate on a volume philosophy to a point but their "bread & butter" is getting their own accounts and shutting out many competitors. Small carriers lack the resources to compete at that high level. Many suppliers look for a "all or nothing" program and only look to certain ones that can provide the coverage and insurance.

 

[OntarioVanMan]

A small carrier can be more competitive when just looking at bid boards. But as mentioned, regulations are shoving a bunch of them out, or they turn into a more rouge outfit. Look how many have come and gone that use to advertise here. The bigger ones can operate on a volume philosophy to a point but their "bread & butter" is getting their own accounts and shutting out many competitors. Small carriers lack the resources to compete at that high level. Many suppliers look for a "all or nothing" program and only look to certain ones that can provide the coverage and insurance.

there are so many variables....are we talking small carrier or 1 man operation?....that is whole different ball game again....

Take me for example...get my own authority get on the sylectus board.....Fund my own loads/no factoring......wife helps out bidding next load whilst I sleep....my CPM say just .50 a mile.....even bidding at a $1.00, I make 50% profit.....

 

[davekc]

there are so many variables....are we talking small carrier or 1 man operation?....that is whole different ball game again....

Take me for example...get my own authority get on the sylectus board.....Fund my own loads/no factoring......wife helps out bidding next load whilst I sleep....my CPM say just .50 a mile.....even bidding at a $1.00, I make 50% profit.....

Unless they changed it, I don't think a single operator can sign up for their service.

 

[Murraycroexp]

Unless they changed it, I don't think a single operator can sign up for their service.

Correct. Last I heard it was a 10 truck minimum to subscribe. Not impossible, but if you aren't going to factor it does make it a slow process.
Trust me. LOL!!

 

[Tennesseahawk]

Correct. Last I heard it was a 10 truck minimum to subscribe. Not impossible, but if you aren't going to factor it does make it a slow process.
Trust me. LOL!!

Actually, it makes it harder to get up to that number, seeing as you won't have the connections needed early on, and you won't have the time to do sales, nor have the money to hire a salesman.

I believe Sylectus forgot its roots; and the little guys who became big guys, now want to take the little guys out of the equation.

 

[Murraycroexp]

Actually, it makes it harder to get up to that number, seeing as you won't have the connections needed early on, and you won't have the time to do sales, nor have the money to hire a salesman.

I believe Sylectus forgot its roots; and the little guys who became big guys, now want to take the little guys out of the equation.

Kind of.
Sylectus did have a lot of the "watch out for the carrier" mentality early on.
But Stu made it more and more clear at each conference that they are a software company and TEANA is supposed to be the group for carrier wellbeing protection.

TEANA's charter members had issues years ago when Sylectus took their stance to spend less time as referees and hand-holders and more time on software enhancements and growing. Naturally, it made sense.

There have ALWAYS been sectors of Sylectus subscribers that other Sylectus subscribers wished were not there.
There have always been Sylectus subscribers that still think Sylectus is some kind of brotherhood of carriers.
Sylectus is not.
It's not a bad thing.
It's just a thing. Just how it is.
If you're looking for a brotherhood of strong carrier relationships, you should join up with TEANA and attend their conferences and network with other TEANA members.
All this is just my observation & opinion from over about 10 years of Sylectus use and about 6 years of TEANA membership.

 

[cheri1122]

Actually, it makes it harder to get up to that number, seeing as you won't have the connections needed early on, and you won't have the time to do sales, nor have the money to hire a salesman.

I believe Sylectus forgot its roots; and the little guys who became big guys, now want to take the little guys out of the equation.

Sylectus did what current corporate groupthink says is necessary: keep growing and expanding, or die.
Which means most 'small' carriers will not remain small carriers for a long [more than 10 years] time. They'll be bought out, or bail out, but the big guys will keep getting bigger, until there's a defacto monopoly. Which is actually several behemoths who compete on little things, but offer no serious competition, and market share remains relatively static.
So the answer to Moot's question is: who knows? A 'handler' [agent?] might seem [and actually be] more responsive to the O/O's needs, but his longevity is pretty iffy, IMO.

 

[Tennesseahawk]

Kind of.
Sylectus did have a lot of the "watch out for the carrier" mentality early on.
But Stu made it more and more clear at each conference that they are a software company and TEANA is supposed to be the group for carrier wellbeing protection.

TEANA's charter members had issues years ago when Sylectus took their stance to spend less time as referees and hand-holders and more time on software enhancements and growing. Naturally, it made sense.

There have ALWAYS been sectors of Sylectus subscribers that other Sylectus subscribers wished were not there.
There have always been Sylectus subscribers that still think Sylectus is some kind of brotherhood of carriers.
Sylectus is not.
It's not a bad thing.
It's just a thing. Just how it is.
If you're looking for a brotherhood of strong carrier relationships, you should join up with TEANA and attend their conferences and network with other TEANA members.
All this is just my observation & opinion from over about 10 years of Sylectus use and about 6 years of TEANA membership.

I've never differentiated between the two, even tho I know they're separate. They ultimately both came from gps411.

 

[jelliott]

Well one is a transportation management software. The other is an industry trade organization. They split exclusive affiliations many years ago.

Kind of like comparison of Qualcomm vs the ATA.