Hi, our carrier company is looking to get contracts with shippers and trying to bypass the broker stage of the process. Can someone help guide us in this process. Where do we start, where can we go, are sales agents affordable for a small company, what do shippers look for in a small carrier company, is a business plan needed. Thanks for looking.
Getting contracts
- Thread starter Nicks
- Start date
10
OMG!!!!! I really don't mean to be blunt but save your money and get out now while the getting is good..........
There are many Brokers out there that could end-up as your best Client's!!!!!
Do you have any idea what your company can expect as net profit? To be successful in trucking there is absolutely no room for inefficiency. Traditionally, Truckload carriers make between 2-4% net profit. I suggest you take a BA course and completely understand what you are getting yourself into before you start blaming everyone around you for failing.
Unless you already have an account that will support the bulk of your needs you most likely will not survive off of Loadboards.
Again, sorry to be so blunt but I have seen this approach fail so many times over the years.
There are many Brokers out there that could end-up as your best Client's!!!!!
Do you have any idea what your company can expect as net profit? To be successful in trucking there is absolutely no room for inefficiency. Traditionally, Truckload carriers make between 2-4% net profit. I suggest you take a BA course and completely understand what you are getting yourself into before you start blaming everyone around you for failing.
Unless you already have an account that will support the bulk of your needs you most likely will not survive off of Loadboards.
Again, sorry to be so blunt but I have seen this approach fail so many times over the years.
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TruckIt you are absolutely right!!!!
Nicks - you should go work for a professional trucking company for at least 7 to 10 years - learn the business inside and out!!! Don't waste your money on business plans and loans unless you have the complete knowledge of trucking. Also you should study the volumes of shipments generated by geographical areas of North America and pick the line that suits you the most.
Overall - work for someone and LEARN THE BUSINESS FIRST!!!!!!!!!!!
Dont waste your money on salesmen, trucks, trailers and staff without knowing what trucking is all about!!!
Nicks - you should go work for a professional trucking company for at least 7 to 10 years - learn the business inside and out!!! Don't waste your money on business plans and loans unless you have the complete knowledge of trucking. Also you should study the volumes of shipments generated by geographical areas of North America and pick the line that suits you the most.
Overall - work for someone and LEARN THE BUSINESS FIRST!!!!!!!!!!!
Dont waste your money on salesmen, trucks, trailers and staff without knowing what trucking is all about!!!
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As a carrier company we are getting undercut by the brokers that we are dealing with. We are looking for contracts so we can have dedicated runs to these destinations. The direction towards going to a venture capitalist is an attempt to grow like the bigger companies like C.H.Robinson, G2 etc. We want our company to have multiple heads like the bigger companies who have trucks, post loads on the link, hire owner operators and are very successful.Thanks for the bluntness :-D
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Nicks, I suggest you research this site, especially threads regarding business practices. Pay special attention posts by Pablo, who has written many times about sales strategies and sales leads. Your other thread regarding a business plan, leads me to believe that you might be new in the business world. Every new or expanding business needs a business plan, in fact every venture should have some sort of roadmap to determine if they are heading in the right direction regardless if the financial insitutions ask for them or not. If you understand your business, you don't need to pay someone to put it down on paper, you can do it.
Westway
Site Supporter
5
This site is better than business plan - spend time to read as many posts as you can. As for getting financing - first decide how you are going to structure your business. Are you planning to buy equipment? Hire O/O's? How many can you afford? Fuel cards, repairs, cash advances and so on. Do you have enough funds to survive without factoring? If not - will you use recourse or non-recourse? I am sure everyone at this forum can be your business advisor. My advice is learn from other people's mistakes, plan and consult with your accountant and proceed with caution.
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Contract Runs - Round Trips under 500 miles return
Nicks, please supply contact information, I believe I may have what you are looking for.
Nicks, please supply contact information, I believe I may have what you are looking for.
10
Utopia
Nicks , what you are looking for is the dream that hundreds of smaller trucking companies seek to achieve.
We have been at it for over 10 years now and our still working hard on getting in house clients that we can service properly.
Also may I add that our worst paying client is an in house client, all the freight brokers we deal with pay a better rate. We have stuck with him because it got us out to where our good freight was during this past recession.
Although, I cannot fathom why you would want to start up a trucking co. in this economic climate!
If your research this far points to the fact this would be a wise decision, your methodology must be erroneous.
Several good and reliable freight brokers can act as your sales force, in the case you are pointing out (that of a small carrier) that is the cheapest way to go.
I do not think this business requires 7 to 10 years to master, a good 6 months in dispatch and operations would do on the office side and most importantly another 6 months driving two trips a week into Greater New York city, preferably with LTL.
The driving part is critical because you will actually see the various issues that a driver has to deal with daily in order to get his job done.
You will learn how to deal with customs officials, all the various bodies of police including the DOT that a driver must again deal with.
You will see the difficulties associated with certain customers you may have.
Best of luck. I would also agree with the other posts so far in suggesting you hold off on any major equipment purchases.
As for the financing option, I believe factoring is not a viable option, my view is that it represents an approach that is to be used as a last resort, the costs are prohibitive.
Nicks , what you are looking for is the dream that hundreds of smaller trucking companies seek to achieve.
We have been at it for over 10 years now and our still working hard on getting in house clients that we can service properly.
Also may I add that our worst paying client is an in house client, all the freight brokers we deal with pay a better rate. We have stuck with him because it got us out to where our good freight was during this past recession.
Although, I cannot fathom why you would want to start up a trucking co. in this economic climate!
If your research this far points to the fact this would be a wise decision, your methodology must be erroneous.
Several good and reliable freight brokers can act as your sales force, in the case you are pointing out (that of a small carrier) that is the cheapest way to go.
I do not think this business requires 7 to 10 years to master, a good 6 months in dispatch and operations would do on the office side and most importantly another 6 months driving two trips a week into Greater New York city, preferably with LTL.
The driving part is critical because you will actually see the various issues that a driver has to deal with daily in order to get his job done.
You will learn how to deal with customs officials, all the various bodies of police including the DOT that a driver must again deal with.
You will see the difficulties associated with certain customers you may have.
Best of luck. I would also agree with the other posts so far in suggesting you hold off on any major equipment purchases.
As for the financing option, I believe factoring is not a viable option, my view is that it represents an approach that is to be used as a last resort, the costs are prohibitive.
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30
To get your own accounts you need to make alot sales calls, I would suggest a minumum of 50 per day if you're just starting out. Also, the larger shippers look for people who can do alot of loads...my own larger accounts require that I move at least a thousand loads a year for them to various destinations...anything less than that makes me unattractive as a supplier.
an attempt to grow
Hi Nicks,
It sounds like you have the determination to grow your business. I believe that in this environment it also requires a passion for what you do. I can understand how you feel regarding your perception of being undercut by the brokers. Working with a broker (at least honest ones), has the same effect as factoring invoices in that the percentage comes directly off your bottom line. A good broker pays you on time regardless of whether or not he/she gets paid. They assume the risk. You mention wanting to become as large as companies like C.H.Robinson, G2 etc. A lofty goal, and if that's your real desire, I think it would be most helpful to emulate those you admire and respect. Learn how they did it. Conduct yourself in the same manner and learn the psychology of negotiation. Personal development means continuous learning, and I believe is as important as business development.
I wish you all the best in your endeavors.
Hi Nicks,
It sounds like you have the determination to grow your business. I believe that in this environment it also requires a passion for what you do. I can understand how you feel regarding your perception of being undercut by the brokers. Working with a broker (at least honest ones), has the same effect as factoring invoices in that the percentage comes directly off your bottom line. A good broker pays you on time regardless of whether or not he/she gets paid. They assume the risk. You mention wanting to become as large as companies like C.H.Robinson, G2 etc. A lofty goal, and if that's your real desire, I think it would be most helpful to emulate those you admire and respect. Learn how they did it. Conduct yourself in the same manner and learn the psychology of negotiation. Personal development means continuous learning, and I believe is as important as business development.
I wish you all the best in your endeavors.
In my opinion this is one of the biggest problems with this industry, the shear lack of barriers to entry.
Some poor sap thinking they'll go buy 10 or so fifteen thousand dollar six year old trucks, and similarly priced trailers, and go trucking for a profit. This guy has no clue about the interworking of this industry, let alone any mechanical ability as to how to work on or maintain their six year old pieces of equipment. They'll work cheap, until they have to pay for a $20k rebuild on their engines and then go bankrupt because they can't pay their bills. Problem is, there will be hundreds of guys lined up behind him waiting for their chance. Meanwhile, the company that has been around for 20 years has to compete with this saps rates while he blows his brains out.
Sorry for the rant guys.....but I feel marginally better at least.
Some poor sap thinking they'll go buy 10 or so fifteen thousand dollar six year old trucks, and similarly priced trailers, and go trucking for a profit. This guy has no clue about the interworking of this industry, let alone any mechanical ability as to how to work on or maintain their six year old pieces of equipment. They'll work cheap, until they have to pay for a $20k rebuild on their engines and then go bankrupt because they can't pay their bills. Problem is, there will be hundreds of guys lined up behind him waiting for their chance. Meanwhile, the company that has been around for 20 years has to compete with this saps rates while he blows his brains out.
Sorry for the rant guys.....but I feel marginally better at least.
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Navigator
I am not sure the barrier to entry applies during these harsh economic times.
Both shipping and air freight/travel have constrictive entry criteria and neither of those industries are fairing much better than ours.
What the trucking industry needs is strict enforcement of the already existing parameters.
And by strict , I mean no bending over backwards for the influential members of the OTA.
I am not sure the barrier to entry applies during these harsh economic times.
Both shipping and air freight/travel have constrictive entry criteria and neither of those industries are fairing much better than ours.
What the trucking industry needs is strict enforcement of the already existing parameters.
And by strict , I mean no bending over backwards for the influential members of the OTA.
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Alx, I would not want to be seen as defending the OTA or any of its members, but I think you've got it wrong about their opinion of stricter entry and enforcement. As I see it, the OTA would prefer to see much stricter entry criteria and more robust enforcement of existing regulations. That would reduce the number of companies competing for what little business there is. Similar to fewer fisherman fishing on the same small lake.
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The OTA looks for an even playing field so that everyone plays by the same rules which is what we should all want. The problem that gets everyone going is they tackle problems head on and are usually out front on issues and are willing to discuss the situations with the MTO so that our laws are not develop by some beauracrat wondering which way the political wind is blowing that day, who would you rather have a say people in the business or people trying to get elected?
Anyways as far as entering into the trucking business if you have enough money to operate and pay your bills for a year then by all means join in on the fun if you don't then see you in bankruptcy court.
Anyways as far as entering into the trucking business if you have enough money to operate and pay your bills for a year then by all means join in on the fun if you don't then see you in bankruptcy court.
Before moving on, I would like to thank everyone for their helpful feedback. I will continue to spend more time on this website as I see it is very helpful. Currenty we own 3 tractor trailers, 2 of them do consistent runs to California and 1 run to MTL. The rates are not the great going to CA and coming back from MTL. We are trying to get some in house clients. Also, we are planning to switch our runs from CA to BC, will rates go up soon? Thanks for looking.
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Shakey
Site Supporter
30
US trade deficit drops 13% in October, due to devaluation of their dollar. This will keep the southbound rates down until things get better US, there should be some rise this year with pressure from carriers and hope everyone sticks to it.