Trying to figure something out

arkjarhead · Jul 8, 2009

What I'm trying to figure out is why so many people lease onto a comapny and depend on that one company to get loads. Instead with my on authority I can call as many people as I want and/or need to let them know I'm empty and ready to haul their freight out of a certain area? I understand some people like the security or don't want the hassel of searching for loads. I know some people that are leased look for their own loads from time to time. I also know that being leased is just what some people like. I'm just trying to figure out why people like being leased to one carrier instead of being a partner carrier with numerous carriers and having good working relationships with several brokers and work on getting your own customers so you have a wide array of options to get loads from instead of the one.

p.s. this is not a dis on the lease system just an honest question.

DannyD · Jul 8, 2009

I don't know enough information. So this is an outsiders thoughts, if that makes sense.

The main thing is getting paid 60 days down the road. And also having to chase your $$. I could be way off here, but that's 2 of the drawbacks I see in it. Also, I'd think you'd need to keep good books & that's not something I wanna have to fuss about. Not sayin my way is the right way, but I tend to write things on the backs of envelopes, that kinda thing.

So that's my 2 cents on why people don't do it.

If it means anything I'm at least trying working w/ 2 carriers.

Some Q's back at ya. How do you work it if you've got several partners & you get a run? Then someone needs ya & you're not around. How does all that work out?

Also, do you get a better rate having your own authority? Like where as a company might pay ya 70%, do you get to keep 90% or so? Last but not least, do you generally stay local or go OTR w/ this? Oops, double last Q.. does the insurance skyrocket by having your own authority?

arkjarhead · Jul 8, 2009

Most of my partners usually post loads on a board and you just call them to book it. Some have you call in and they put you on an available truck board. Then when you find a load elsewhere you call them and they remove you. Sometimes I get paid close to the same as what a leased operater gets, but I find most times I'm getting more because when the carrier agrees to let me haul the freight it's because they have no trucks in the area and they are trying to take care of their customer and prevent them from going down the road. When you manage to find someone desperate and in a tight squeeze to take care of a big customer of theirs you stand to cash in. Not big time but it does pay. I would say I pay more for insurance than a leased operater but I tend to more than make up for it. I go OTR with what I do, but I have the flexibilty to stay local or run regional if I feel like it. I just do what pays.

piper1 · Jul 8, 2009

I think leasing on has the following appeal to some,

1) you get paid quick, and if you don't, its one phone call to one company, not several. Ya, you can factor, but that has its own pitfalls sometimes.

2) its easy, you don't have to find the loads, to some, this may be a daunting experience

3) you get to be an independent business without being completely "alone", again, the comfy factor.

Turtle · Jul 8, 2009

There are many advantages to having a leased carrier other than merely finding your own loads or when you get paid. For example, if there is a legal problem, the larger carriers have the legal experience to deal with it and help you out. This is particularly true of issues on the other side of the border.

Another one that's timely is, with Panther, anyway, if you get a load into Canada, just before you cross the border, you have the Speed Limiter set at a specific facility near the border. Immediately after coming back out, you have the Speed Limiter removed. Panther pays for it. Every time.

There are lots of reasons why people lease rather than have their own authority, same as why some people prefer to drive for an owner rather than be one themselves. It's because people are different.

arkjarhead · Jul 8, 2009

I'm not downing leasing to a company by no means. I was just curious some of the reasons people decided to lease on instead of going out on their own, if they had considered it at one point or another?

xiggi · Jul 9, 2009

Some people like to cook in their truck others prefer restaurants, it takes all types to make the world work.

fastrod · Jul 9, 2009

I expedite in a van and got my authority in 2006. I deal directly with shippers, no brokers or partner carriers and use a factoring service to get paid. This works great for me but I can see why it is not for everyone as there is a great deal of responsibility that goes with having your own authority. Like they say, if it was easy everyone would be doing it.

x06col · Jul 9, 2009

Ark, It took you a long time to decide to go for it. Prolly many are the same way. Looking around, and learning. Many tho, won't take the step, because it's a daunting endeavor, and way too much work. Also, the big umbrella is very comforting to some, regardless of what it costs them.

davekc · Jul 9, 2009

Since we had our own at one time, I think leasing to a carrier that lets me find my own loads is the best combination for us.
No longer do we have to worry about DOT audits, dealing with a drug program, collecting freight bills, log audits, and the list goes on.
The costs outweigh the gains to me.
The other issue, specifically in a down economy, is the type of freight. We are doing quite a bit more government type loads that usually require a larger carrier.
Why, because they have all the systems in place to do these types of high security loads. They pay well, and you aren't likely to run into a small operator doing them. So sometimes, it isn't necessarily finding the freight, it is the type and the higher rate that sells us along with less competition.

Tennesseahawk · Jul 9, 2009

Here's the way I look at it. Company A gets me loads for 1.40/mi. Company A pays their contractors 1.30/mi, all in. Company B & C have the occasional loads that may pay more than 1.50/mi, but it's rare. Companies D & E aren't accepted by my factoring co, as they have outstanding invoices. Companies F, G, H, I, J, K, L, M, & N all play cutthroat, and try to pass off expedite as LTL, or work to get rid of it for 1.00/mi.

I'm signing back on with Company A!

When the economy is better, and I have 3 or more trucks, I'll go back on my own. Until then, fighting for scraps isn't worth what I'm paying in taxes, fees, insurance, etc. The .10 extra doesn't pay for all of that.

arkjarhead · Jul 9, 2009

davekc said:
Since we had our own at one time, I think leasing to a carrier that lets me find my own loads is the best combination for us.
No longer do we have to worry about DOT audits, dealing with a drug program, collecting freight bills, log audits, and the list goes on.
The costs outweigh the gains to me.
The other issue, specifically in a down economy, is the type of freight. We are doing quite a bit more government type loads that usually require a larger carrier.
Why, because they have all the systems in place to do these types of high security loads. They pay well, and you aren't likely to run into a small operator doing them. So sometimes, it isn't necessarily finding the freight, it is the type and the higher rate that sells us along with less competition.

That was the kind of answer I was looking for. I understand being independent isn't for everyone just like being leased isn't for everyone. My question wasn't a slam against those that are leased on although I feel that some might have taken it that way. Thanks for the answer Dave. I work with a local company that specializes in tranportation services and they help me with keeping things squared away for log and DOT audits and they also have me in a deal for random drug tests. They have so many customers I guess they make their money from volume but it really isn't that expensive. Of course they have book keeping services and they buy freight bills which are services I don't subscribe to. I might try to sale a freight bill or two if I messed around and hauled for a customer that didn't want to pay up and there was no other way around. Some people sale them all of their bills just to keep from having to fool with it, and get paid quicker.

davekc · Jul 9, 2009

I don't want to say one is better than the other because most situations are unique. Just as the guy that works directly with the shipper, has little value to me because in my case, they likely can't support a fleet of trucks.
You have to make sure you are looking at ALL of the pieces in the puzzle, and not just a few.

"Businessman first, driver second"

fastrod · Jul 10, 2009

I know of 2 companys in my local area that have fleets of between 30 to 50 trucks that deal directly with shippers and are doing well. A third one I know of has a fleet of 9 cargo vans, 4 straights, a couple of tractors and about 70% of there loads come directly from shippers with the rest broker freight. I do understand that if you only want to deal with brokers or partner carriers it would be easier to lease to a company because the money is about the same. I also know that when you start working with shippers the money gets a lot better and if you put the time and effort into it you can support a fleet of trucks.

arkjarhead · Jul 10, 2009

I had a friend start running under my authority a few weeks back. He's running the Cali and back run I was doing. I'm about ot start trying to stay a little closer to home for personal reasons. Mainly the fact that if my wife and I get a child sometime soon (fingers crossed) I want to be home more. I'm currently talking to a company about hauling loads of medical waste for them. It's another dedicated direct shipper deal. I will find out by the end of the month. If I get it I'll have to get a hazmat suit and all that jazz, but it will be more than worth it. Gotta wait and see what happens. I could run a load to Oklahoma, West Texas, or East New Mexico and make more that I can make on any of the 3 than running out to Cali. So I figure why not.

x06col · Jul 10, 2009

arkjarhead said:
I had a friend start running under my authority a few weeks back. He's running the Cali and back run I was doing. I'm about ot start trying to stay a little closer to home for personal reasons. Mainly the fact that if my wife and I get a child sometime soon (fingers crossed) I want to be home more. I'm currently talking to a company about hauling loads of medical waste for them. It's another dedicated direct shipper deal. I will find out by the end of the month. If I get it I'll have to get a hazmat suit and all that jazz, but it will be more than worth it. Gotta wait and see what happens. I could run a load to Oklahoma, West Texas, or East New Mexico and make more that I can make on any of the 3 than running out to Cali. So I figure why not.

It appears Joe that you are so soon fighting the same old dragon that wuz the nemisis for so many Independant type folks. Looking at things that improve your personal satisfaction level, steada look'in at things that improve your position.

BULLRUSH · Jul 13, 2009

Alot of other factors go in to it like whats happens if you breakdown???,Most companys wont load mama's/pops carriers because they have no backup system.ps If i was a company and i had (time precious) freight i would want all angles covered to make sure my freight is delivered on time or close to it if someone brokedown, instead of waiting for a independent driver to get his van or straight truck fixed IF HE ACCUALLY CAN!!!!

x06col · Jul 14, 2009

Actually Bullrush, that is not nearly as large a problem as you imagine. I only had to use my partner Carriers once for a breakdown problem, but, rescued several others during the years. The alliance I wuz involved with had over 6000 units available nationwide. Waaayyy more equipment available than your imagined "best in class" carrier. Therefore, the response time for rescue is a lot less than you imagine I guess. Y'all can keep on dreaming.

jimlookup · Jul 21, 2009

I have my own authority and I spend more time looking for loads than I do delivering them. I have a partner carrier relationship with six expediting carriers, (including the so called big 3), and several freight brokers and the loads still seem to far away most of the time.
There is also the added frustration of bidding. Earlier today I bid $400 on a load and less than a minute later some one bid $395. I know this could have been a coincidence but I think when one under bids someone they should be required to do so by a fixed amount (say $30) or a fixed percentage (say 5%). A couple days ago I bid on a great load. Paid $2.60 a mile for 600 miles with a great destination. Shocked the hell out of me when I won it. Five minutes later the phone rings and a dispatcher tells me this was a nonbrokered load. Translation- Should not have been on the board I bid at. I'm going to give it a few more months and if I am still not making any money (breaking even now) I' going to be looking for the board that load should have been posted on which means I will be leased O/O.

CharlesD · Jul 22, 2009

I've had my authority since late 2007. I started out just doing the partner carrier thing and it worked pretty well for most of 2008. This year has been another story though. Freight is slow and the companies are playing cut throat bidding at contractor rates for carriers, or worse.

With that said, the days of just staring at the computer until the loads show up might be long gone for a while. I'm still getting ok rates on the west coast with the unit out there, but that's because there isn't the same level of competition out there, but for anything close to my house I'm having to take what I can get and possibly double up on some loads. The other thing I've been doing lately is beating the bushes at all the industrial parks in my area, trying to line up direct customers. I've had mixed success with that because I'm really not a very good salesman, but I'm having to learn. That's the rub. If you just want to sit and stare at a computer and wait for the loads to magically appear, then maybe you should just lease on somewhere. Don't go independent unless you're willing to do a lot of legwork.