I have a few observations on your situation, and all these observations come from a been there done that perspective.
Getting off factoring should be a goal to shoot for, but it gets harder the more you grow and the more revenue you start doing. We started factoring a few years ago when I started recruiting other owner operators because I needed a way to pay them quickly. Now that we've grown, the amount of money I would need to make a clean break away from factoring is much higher and I'm looking at a bit of an uphill climb to set aside the revenue needed to get away. You need to basically get enough to pay off whatever is owed to the factoring company along with another 45 days of expenses. For us, that figure is 800k.
What do you do when you get off factoring? For us, we're not changing our pricing one bit. I want to get off factoring to increase the bottom line. If I'm not going to keep that extra 3%, what's the point? Either I add that to the bottom line, or I just keep factoring. Factoring companies really do quite a bit of your work for you when it comes to billing and collecting on those invoices. If you're going to take on that work, you might as well make that money. We paid out over $120k last year. I could put that to good use. We'll be off factoring within a year or two at the most and you can bet I'll be keeping that 3%.
Regarding the internal competition, you might want to re consider that. When you have someone ready to award you a load and you might have two different bids from your company, it makes you look somewhat unorganized, or you might be leaving some money on the table. If I have a load listed and I get two bids from two different people a the same company, I might give the load to another company that has a bid in the price range I'm looking for. If you have two vehicles in the same area, you need to figure out who's first out and submit one bid on the load for the guy who's first out. Having multiple bids go to the same broker just doesn't look good.
Also, if you're having too hard a time winning loads at a profitable rate, there are a couple things you can do. First, get a good salesman and try to get access to more freight that you don't have to bid competitively for. Even some good 3PLs that aren't on Sylectus is a good start. The freight listed there are the lowest priced loads you'll haul. Nail down a few customers, either direct shippers or some 3PLs that aren't on Sylectus. You'll see your rates improve. The other thing you can do is forget about the cargo vans and focus on recruiting straight trucks. When we finally decided to do this, there was a big learning curve at first, but it's paid off. Straights are a bit more work with having to mess with IFTA and all of the safety stuff, but it's worth it. It's easier to keep them rolling and you make a whole lot more money when they're rolling. Since it costs about the same amount of money to insure them as it does vans, it's really a no brainer.
Another thing a lot of people don't realize, is that it's not always the lowest price that gets the load. We've been brokering for a short while now and most of the loads I've brokered out have not gone to the lowest bidder. There are some people who send me some of the most ridiculously low bids you'll ever see. I'm not going to award a load to some carrier who bids .70 a mile. I want to get good service from a carrier and I figure you get what you pay for.
Anyway, these are just some things I've learned over the years, a lot from making mistakes along the way.
