Yep...your really gettin it done Blizz. I would have no problem encouraging a young man to follow in your footsteps.
The easy entry into this way of doing business is appealing but I also wonder if it may also be its undoing.
When I learned of this business model in February, and as I sat at my desk in our Florida vacation house, it occurred to me that I have everything I need to do what others are doing in this under-the-regulatory-radar ("URR") model. That is: one truck with a DOT number that I can use to establish myself as a carrier, a telephone, fax capability, internet access, industry awareness, a known name and good reputation (if I may say so myself), sales and administrative skills, and a bit of capital.
I also have a place to do business. Out on the road, my world headquarters would be my truck sleeper. Off the road it would be my office in Florida or a card table and folding chair at home in Minnesota.
If I decided to establish a URR carrier (no such decision has been made nor is it likely to be), I could be in business in a few days. It would take more than a few days to build a base of good drivers, but that's where the business could become self-defeating, it seems.
Since the URR carriers contract with van owner-operators on a non-exclusive basis, and since most URR's are working the same load boards to get the same freight, the easiest way for me to get drivers is to find those who work for other URR carriers and pay them a bit more than other URR carriers so the drivers will be most loyal to me (or at least call me first when available).
Van drivers would pass the word, "Go with Phil. He's a good guy and pays a nickel more." Then Joe comes along to pay six cents more, then Sally who pays seven cents more, then Fred who gives a free day at a day spa for every five loads completed, and then Jane who pays a $500 bonus for every 10 loads completed, etc.
The justification for higher driver payouts and bonuses is volume. You give up some money on each load but because you do more loads, you make more at the end of the day. But the problem is that with more volume you need more people to dispatch the freight and more money to cover your increased overhead.
It's the same as in a truck. The more money you are willing to give away, the busier you will be. But at the end of the day you discover that you have made shippers rich while making little or nothing for yourself.
The more people adopt this business model and become URR carriers, the less profitable the model will be. And since it is very easy to become a URR carrier, it seems likely that more and more people will do so and this very thing will happen.
Am I right or wrong?
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