Tactical Pen

So you have considered all your variables, and you want to own a Carrier…….also called a trucking company?

We Don’t Sugar coat shit around this place, so here is the reality!

  1. Lack of Sleep is guaranteed.
  2. NO CDL, NO PROBLEM
  3. Some customers will try to not pay you.
  4. Some drivers will try to break you
  5. There is more than one type of Carrier
  6. Containers are some of the least paying freight
  7. Factoring companies are a must
  8. Training and Experience help
  9. DOT rules are a must know
  10. If you will not be the Last of your team home, then you should NOT be a owner
  11. There are no secrets

LACK OF SLEEP IS GUARANTEED

TRANSPORTATION IS A 24 HR A DAY BUSINESS, 7 DAYS A WEEK-  NO VACATION OR TIME OFF UNTIL IT IS BUILT

Being a Carrier carries a lot of responsibility.  You are not only responsible for the safe passage for your customers load, but you also have the responsibility to maintain equipment, follow all required rules for the carrier side, make sure your drivers are following all their requirements, make sure all invoicing is complete, make sure paperwork is turned in to the office, insurance and all required mandates are paid and performed properly, fuel is paid, shop is not overcharging for any repairs, drivers are on time, location checks and updates are done properly, all documents are signed at delivery, fedex bill is paid, all services are paid, federal taxes and fees paid, property is taking care of by providers, and if there is any money left over; then and only then does the owners get paid.

Teams are necessary and picking bad members that do not do each job as they should will cause headaches for months after they are gone……..however hiring the best ones with right temperament for the team and organization, with the best goals for the near and long term future tend to be the best for the office.  Experienced is not always the best for dispatch, however Safety needs to be a former driver who can ensure proper auditing and proper procedures.  They know the safety and requirements and tend to have the simplest systems for this side of a carrier.  Dispatch is best without experience, this way if you are experienced you can train them or get them trained the way you desire them to operate.  Dispatchers that have been dispatchers with multiple years experience, tend to know the ways to cheat the drivers and there is a long list of ways they will suck money from the business without your knowledge so be cautious.  With the bad, are the good, There are good reasons to have an experienced dispatcher, as long as they are not cheating anyone Carrier side, Broker Side or Driver side.  The good reasons for those lacking experience:

  1. Freight follows a dispatcher who will take care of their clients and get the job done.
  2. Drivers follow dispatchers who take care of the drivers and get the job done
  3. Dispatcher(s) with these prior two WILL make money, providing their freight pays decent and their drivers follow the dispatcher and freight.
  4. Dispatchers will know proper procedure and mandates
  5. They tend to know how to recruit
  6. They can be a good teacher, if you listen
  7. They know how to do all paperwork for all providers, ie Factoring Co, DOT permits, Close sales and get proper authorization, properly get driver files correct, deal with audits, and collect on past due invoicing from customers
  8. They know what trucks will work with the desired type of freight to move
  9. They also know when you can pick additional freight to maximize pay and Invoicing for Carrier
  10. The loyal and honest ones will naturally build the carrier for an inexperienced ownership because they believe in the business systems within the industry.

My suggestion with the drivers, when you are starting out, find the most experienced with best qualification, and ask them how would they best improve and assist the ownership with future growth.  Pick the one that you believe will make the best partner and pay them well.  They are or can be training the owners, when they do not realize it.  Don’t choose one that will tell you what you want to hear, hire the one that will look you in the eye and will give you the honest answer to any question, whether you like the answer or not.  It will be tough, but it is for the best!

The drivers that want to be in the office, promote them!!  Do not leave them in the Truck, bring them in-house and let them manage.  They will be the toughest safety guy, most respected of dispatch, and can catch a driver lying and usually know when the driver is not doing their job, period.  They have been there know what the experience is like, knows how to fix any issues, can typically find the best paying freight, and loves the business, or at least is passionate about something within the business.

NO CDL, NO PROBLEM

There are plenty of examples of owners who do not even know how to drive a truck.  So the myth is clear, to own a carrier you do not have to know how to operate any of the commercial trucks.  All you need is a good team, to fill in the blanks.  Training from a 3rd party will help you as well.

SOME CUSTOMERS WILL TRY TO NOT PAY YOU

Welcome to the club….it happens, businesses go out of business, mistakes happen, paperwork gets forgotten, some don’t have the money, some do and do not pay, it is all a fact of business.  Just keep those wheels moving!

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SOME DRIVERS WILL TRY TO BREAK YOU

A lot of drivers will try to break you, either mentally or financially, sometimes both.  Bad drivers are a product of the environment of constantly being shit on.  Some can be corrected over time, others cannot.  Prove you are different, and show them that you care, and we can correct most of the correctable ideology that comes from bad prior ownership and management.

Ways a driver will steal from the organization, but not limited to this list:

  1. Buying fuel, then selling for cash
  2. Buying maintenance items and then trading for cash
  3. Comchek, Tchek, ect
  4. Lumper overcharging fees, giving cash to driver, without acknowledgement
  5. Charging items and taking back without notifying
  6. No receipt
  7. Failure to maintaining equipment
  8. Failure to maintain tire pressure
  9. Fuel mileage
  10. Not on time to appointments
  11. Too much time at truckstops
  12. Stopping too much

I can keep naming ways that you can lose money by every position you can have within the Carrier Business.

THERE ARE MULTIPLE TYPES OF CARRIERS

Carriers are authorized motor carriers that haul freight from one point to another.  They can also be any commercial organization that has a motor carrier number, USDOT number, and or state dot authorization, intrastate, and interstate.  Courier Services and transporters can all be classified as carriers.

Common Carrier Types include but are not limited to the following:

  1. TRUCKING COMPANIES
  2. COURIER SERVICES
  3. DRIVEAWAY SERVICES
  4. TRANSPORTERS
  5. BUS LINES
  6. TROLLEY TOURS
  7. TOWING COMPANIES
  8. REPAIR FACILITIES
  9. DEALERS
  10. CAR HAULERS
  11. HOUSEHOLD MOVERS
  12. STORAGE COMPANIES
  13. TRASH COMPANIES
  14. PARCEL DELIVERY COMPANIES
  15. BAKERIES
  16. and many more……..

CONTAINERIZED FREIGHT USUALLY PAYS THE LEAST AND HAS THE MOST VOLUME

Most port towns have a port that imports and exports containerized freight all over the world.  This includes rail yard locations.  This freight is usually the cheapest freight anywhere.  Containerized freight has the largest volume.  Good if you are in the volume business, however small businesses typically are not in the volume business due to the low margins, and lack of financial backing required.

Most dispatchers are agents for these type of Volume businesses, and typically make between 8-12% of the gross on the line haul, plus overages not paid out to drivers/truck owners within their fleet, SURPRISE!! We ain’t as dumb as we look and sound.  Yeah we know some of those fees can equal that commission amount…..Call my bluff!!

A lot of these companies are self insured, so the cost per truck is minimized based on their self insurance costs if they set up additional business just to insure the carrier.  HOWEVER, That is another topic for another day.

FACTORING COMPANIES ARE A MUST

A factoring company is a financial company, much like a bank, that earns small percentages on financial securities ranging from transactional financing, Accounts receivables, agreements to pay, liens, Account Payables, just to name a few.  These people essential finance payments or payouts for their clientele.  Cash flow is their business.  Your Customers credit essentially becomes your credit upon approval.

Factoring companies are great service professionals, and organizations to help the cash flow within the Carrier business, especially the small carrier and small fleet business.  These companies “factor” the companies invoicing and pay earned monies, upfront for a small percentage of the take.  Typically earning 3-5% on the Gross of Invoicing to the customer,  on payment terms  of Net 30-45 days for your customers upon invoicing for the transport, which is a standard requested payment term used for pay in the carrier/transportation business.

Important to Note here, is that some large shippers and even brokerages, have extended credit lines,  due to the widely available and great credit of the business.  These customers will demand NET 90 or longer terms.  Walmart is highly known for Net 120 terms, and solid financial history to back up the terms.  These terms can kill a small business, so Factoring companies will almost beg you for your paper security position from Wal-Mart and a few other businesses that ship billions in freight bills annually, just for a small piece of the pie.

A good solid factoring company is always good to have in that rolodex.  Be personal and learn is my best advice.  They will teach you anything you wish to know, because a smart customer is the best customer for these service companies.

TRAINING AND EXPERIENCE HELP

Obtaining 3rd party training on the details, needed areas of improvement, unknown areas of business, and recurring training help the owners, managers, maintenance, drivers, brokerage, safety, and even the clean up crew……

Get training from a knowledgeable source, which has passion, dedication, and belief in the industry.

Make the training available for everyone, so that even the ones who would be interested in future positions, would have opportunity to improve the organization.  Having all the various positions trained on every position, if possible, allows improvement and back up in case of any issues; plus gives the owners solid foundation to have an employee backed organization that not only has engaged employees but grants the business an automatic pool of candidates to move up into management without having to bring outsiders into the organization.  This is the hardest to do, but the most common mistake I have found within the Carrier industry.  Most commonly caused by Greed, and not considering Legacy of ownership or organizational environment.

Finding the experienced to help build is a huge decision when new organization forms.  This is the way to maximize the organizational profits, in the shortest time.  However, no all experience is good experience, and even experience can hinder the organization.  Find the Bold and Empowered who seek to improve the business and industry, not the ones that are causing the problem.  IF they don’t fit what the ownership is wanting, or the organization wants then get rid of them and find someone conducive to the organization and the desires of the ownership.

DOT AND RULES AND REGULATION KNOWLEDGE

The organization must know the rules and regulations of the industry.  They MUST be followed.  This one area of lacking will cause everything from excessive audits by the authorities, to fines, penalties, and even shutting the business down, to being targeted by the authorities at every “chicken coop and dot location.”  Profiling happens after so many issues……..

These rules are there to protect the public, so they say.  Being aware is not enough, you must protect your organization, employees, contractors, and clients by knowing the laws better than the authorities mandating them.  It is just smart business, with over-regulation, and over reaching bureaucracy.

*****IF YOU ARE NOT WILLING TO BE THE LAST MAN IN ON YOUR TEAM, THEN YOU SHOULD NOT BE AN OWNER******

Why you ask?  Well, it is simple, a leader leads from the front.  He or she is the responsible one of the organization.  Everyone depends on him or her.  Obviously, a person cannot operate 24/7/365.  However, if you are not willing to do what you just asked of any person in the organization, what makes you think, they will respect you?  So I have always said that, if the owners are not willing to work longer than the lowest paid in the organization and do their job for the same pay or less, then why should they be owners of a business that they care nothing about?  If they would not get in a truck tomorrow to move a load if needed, then why should any driver, dispatcher, salesperson, janitor, mechanic, cook, or even delivery driver do any job needed for them……..

However, if the upper management commonly executes critical positions, and is willing to perform the job the best they can no matter if they are good or not, and if they like it or not………….this will show the team; that management will do what is needed for the company, when it is needed to get the mission done.

Lead from the front, because if your team is doing what is needed, show them what a Great leader does, Leadership by example, and by being the front, by being in the shit, by saying no worries guys and gals, we will push and persevere, because I am your LEADER and I will clean the toilets if needed, or I will jump in and deliver that load for our customer because that is what your team will do …………

THERE ARE NO SECRETS

No matter what anyone tells you, in this industry, there are no secrets.  The ones that think there are secrets, are definitely the fool at the poker table.

Someone that has done been there, done that, and got the t-shirt.  The thing you can bet on; successes always leave clues, but mistakes are always the best teachers.

Still interested in Owning a Carrier?  Have money to Invest?  Want to Invest, but not operate?  Operators with 5 plus years experience minimum, would you like to invest in your own carrier with like minded operators?  Investors, Do you need Consulting for your investment portfolio with transportation shares and alternative investments?

Fill out the form below, and you will be placed on our correlating list of people looking for the Next Carrier Powerhouse Team to Invest in this exciting and demanding field of the transportation industries around the world.

If you are looking to invest, and would like to have a solid consultation, or industry insight; find out more on MAD MOTHER TRUCKER, So you want to build a trucking business.

This way you can be a step ahead, without the hassle and headache of being the owner that knows nothing, and without the lack of skill needed to run the business successfully !!

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