Starting a Co-Ops company of owner/operator

MikeJr

Moderator
Staff member
30
Mike,

Part of the potential issue is what I experienced myself from Shiprodeep (we had previously worked with a company or two that dispatches exclusively for some 1 truck shows with some success). He'll tell you one o/o is picking up your load, then when you do not approve that o/o due to extremely high out of service % scores he'll tell you he's sending in another truck. The other truck has great safety scores and checks out entirely except that he'll still send in the first guy without telling you.

With regard to monies flowing, it doesn't really matter to him, both of the 1 truck operations are closed soon after. It's the price they pay for hauling for him.

In short: we've learned our lesson, the hard way as usual.

Keep well,
Mike
 

Michael Ludwig

Well-Known Member
20
Mike, that's really a shame. There is plenty of work available for owner operators with long-standing companies. I don't understand why they would have to resort to that business model to try and make a go of it.
Maybe I am all wong on the business model too. Really, all I'm saying is they never covered that one in MBA classes ... LOL

As for lessons ... aren't they all learned that way ??? ... LOL
 

MikeJr

Moderator
Staff member
30
Mr. Mike,
Exactly! The wife who is at home dispatching for her husband the driver is part of the business (an essential part). Shiprodeep is rebrokering to carriers who he claims work for him exclusively, who then subsequently are closed, in my experience.

Keep well,
Mike
 

Shiprodeep

New Member
2
Sorry for late response i was out of country.

Owner Operator ABC gets his own authority but does not find it viable to hire a dispatcher as he only has one truck. We come in place and book loads on ABC's behalf. ABC picks up the load and delivers the load and sends the documents to factoring company to get paid. Abc gets paid and then they pay us afterwards. We are in touch with Shipper/broker throughout the process so the customer always knows where their product is. Doing this for over 4 years so we have great trade references.We concentrate on tough areas where its tough to find capacity for example Manhattan,ME,NH. Also operate all year round. If you have lanes that you are having issues please contact me and we can work together. Business is clean and Transparent.
 

Shiprodeep

New Member
2
Mike with Starship freight always mentions this one load which had an issue and there was discrepancies on both sides specially with the amount which was negotiated and the confirmation had a lowered amount.When we questioned we were asked to do a one time favor for Starship.

Mike and team keep forgetting all the other loads that Kiplingas logistics (one of my other carriers) did without any service issues and getting great feedback from Starship.( Have emails to back it up)

Mike if you are willing please let me know and we can get on a call and move past the issues with had earlier. We do not have to work together but you mentioning one side of the story and holding a grudge does not help anyone in this business.
 

Shiprodeep

New Member
2
Henry its not easy working as a driver and dispatcher at the same time especially on the spot market where things change frequently and have a lot of factors. If some drivers are doing it great for them but it is very difficult and frankly very dangerous.
 

Igor Galanter

Active Member
15
Henry its not easy working as a driver and dispatcher at the same time especially on the spot market where things change frequently and have a lot of factors. If some drivers are doing it great for them but it is very difficult and frankly very dangerous.

When you right- you are right..
 

loadbeaver

Member
5
working as driver and dispatcher, i found NOT IDEAL and can't catch those great/urgent load in these days of highly competitive market. I have found many times the load is gone within first call. How can you stay with LOADLINK every second while you're driving? Don't crash
I agree with Shripodeeep, as The CO-OP model will be working as liason on behalf of each company. I am not clear no legal perspective, but technically it is possible, even we can call the broker or shipper showing that owner/operator phone number on their side. We will be purely representing that company that time, however also explain them the model if they need/ask. I am still new bee on this mode, doing research on it last few months.
 

thebluffs1

Site Supporter
20
working as driver and dispatcher, i found NOT IDEAL and can't catch those great/urgent load in these days of highly competitive market. I have found many times the load is gone within first call. How can you stay with LOADLINK every second while you're driving? Don't crash
I agree with Shripodeeep, as The CO-OP model will be working as liason on behalf of each company. I am not clear no legal perspective, but technically it is possible, even we can call the broker or shipper showing that owner/operator phone number on their side. We will be purely representing that company that time, however also explain them the model if they need/ask. I am still new bee on this mode, doing research on it last few months.

Or - you could build a business that doesn't depend on the Loadlink and is actually sustainable over the long term rather than playing the spot market. More than one model that works.
 

Shiprodeep

New Member
2
Or - you could build a business that doesn't depend on the Loadlink and is actually sustainable over the long term rather than playing the spot market. More than one model that works.
Please share some tips as it must be extremely hard for single owner operator to approach a shipper directly and bid on a lane. From my understanding shippers would not entertain anyone with less then x number of trucks in the fleet. I would love to work with the shippers directly this will help me give the owner operators a fair rate.
 

Rob

Site Supporter
30
Please share some tips as it must be extremely hard for single owner operator to approach a shipper directly and bid on a lane. From my understanding shippers would not entertain anyone with less then x number of trucks in the fleet. I would love to work with the shippers directly this will help me give the owner operators a fair rate.

Baloney, When Dad started he went to a couple different shippers as a one truck company. One we had for 16 years until they closed the plant. Another 22 years and still use us on a regular basis. Living off the link is all fine and dandy when it is busy. Sucks bad when it is slow..

The best advise I can give you or any other trucking start up is BE HONEST. Way to many companies out there lying through there teeth to get the load. It may work the first load but how long to you think it will last as a business model.
 

loaders

Site Supporter
30
Rob’s experience with his family business is quite common. Many smaller Ontario based carriers started that way. Find a shipper, usually smaller, that can utilize the flexibility a small carrier can offer. Service them to death and you will be surprised at how quickly word will spread. Take a Saturday or Sunday and drive around the industrial areas looking for potential customers. It’s not easy and takes time, and will take you out of the drivers seat for a couple of days to secure the business. A handful of shippers that ship once a week is a better business model than having one large shipper who ships every day, especially for a small carrier.
 
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Michael Ludwig

Well-Known Member
20
Please share some tips as it must be extremely hard for single owner operator to approach a shipper directly and bid on a lane. From my understanding shippers would not entertain anyone with less then x number of trucks in the fleet. I would love to work with the shippers directly this will help me give the owner operators a fair rate.
You're right ... Coca-Cola would not entertain such an approach, but there are many others that would. It takes that one person to point you in the right direction, and it takes legwork to find them.
I'm certainly not saying your system is wrong or flawed, but what I am saying is that it is relatively new, generally foreign, mostly untried, and in its limited past, has been quite suspect. You have a few hurdles to get over before the model becomes trusted, or even commonplace. Frankly, I wish you good luck, and good fortune.
While I like my business model, I am certainly not going to suggest that there may, or may not, be a better model out there.
I think we have to assume, because of the Shiprodeep moniker, that this entity is born of a culture that is relatively new to Canada, and maybe, just maybe, this is that culture's version of the family business.
Time will tell, and most likely in relatively short order, if Shiprodeep's model works or not.

As for advice ... this was told to me many, many, many years ago by a fellow from a GM dealership ...
"Do something right, or good, for someone, and probably no one will ever hear about it. But, make a mistake, or screw someone over, and the whole world will know about it.".
Word to live by.

Disclaimer: Free advice is worth exactly what you pay for it ... LOL
 

Intrepid

New Member
1
The model for a "co-op" has not been successful in trucking. The authority holder / insured still needs to perform all of the safety & compliance functions like maintenance records, drug testing, training, log audits...and the result tends to be more OOS citations and ever increasing insurance rates. You would tend to get a lot of cowboys girls that know everything and cannot be kept in line. It would attract the O/Os that cannot be conpliant.
 

Shiprodeep

New Member
2
I think I know where you're going with this. Let me see if I have this correct ...

Let's call your company "Shiprodeep". I don't know if that's what it's really called, but for these purposes, that will suffice.
The first part of Shiprodeep, a transportation force, has gathered a number of one truck companies together, ABC Transportation, DEF Trucking, etc., etc.
A second part of Shiprodeep, a sales force, has gained access to freight. Whether by loadboard or direct customer contact is immaterial at this point.
A third part of Shiprodeep, a dispatch force, a sub-division of the sales force, doles out the loads to the carriers signed to the first part of Shiprodeep, the transportation force.
A fourth part of Shiprodeep, a tracking force, monitors the freight progress of the first part of Shiprodeep's company, the transportation force, through the third part of Shiprodeep's company, the dispatch force, and keeps the shipper abreast of progress through the second part of Shiprodeep's company, the sales force.
A fifth part of Shiprodeep, a management force, keeps the whole thing ticking along.
Correct so far? I bet if I am not right on, I am awfully darn close. The reason I think I am correct is because that's about the only way I can fathom that it works. The only other way I see it working is parts one through four are third parties, using contract labour, contracted to the fifth part, management.

Subsequently, I, and others maybe as well, am/are left with a few questions. The biggest I suppose is how does the truck get paid, and by extension, how does the driver get paid? My thoughts are in this direction; The truck gets a pay statement with percentage deductions off the gross pay for each of the following:
A deduction for the sales force for finding the load.
A deduction for the dispatch force for coordinating the load.
A deduction for the tracking force for tracking the load and maintaining customer confidence.
Each deduction would have to be at least 10% of the gross. You could not possibly pay wages, source deductions, WSIB, etc., and keep the lights on for anything less.
I can see where there are some tax implications here. Each of these services is HST applicable since (presumably) both the sellers (Shiprodeep operating parts) and the buyer (ABC Transportation) are Canadian entities, and the transactions are completed within Canada. Destination of the freight has absolutely nothing to do with these transactions, and there is no possible way to wash it otherwise.
The next question is about liabilities. Tax liabilities, insurance liabilities, wage liabilities ... the list is almost endless. Who is responsible for what and how? We could delve into this further, but truthfully it would be like writing a thesis for a PhD.
What if the actual transportation companies like ABC Transportation were using contract drivers ... Driver, Inc., if you will? What sort of dog's breakfast of trouble would that reveal?

I would expect the cost of accounting alone would negate any possible savings over other, pre-existing business models so that brings us to the ultimate question: What possible savings or advantages could there be to giving birth to such an entity?

@Shiprodeep - what am I missing here? I will truly be pissed at myself if I have been doing business one way for 50+ years, and have missed the advantages of this business model.
You are spot on. Would you have time to come meet me at my office and i can show you how we do what we do. PM me and i will share the details.
 

canadian99

New Member
2
Interesting read. I'm Canadian myself. But this model is alive and well established in the USA with no issues.

Personally, I'm not interested as a one truck operation to service the same customer, did that for 9 years until the rate dropped out of what I'd consider realistic. I'd never consider taking them on again even at double market rate. Favours are quickly forgotten in the face of profit.

Give me a different place every day, every week...I'm checking out a few "dispatch" companies as we speak, all USA based
 
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