The “Skinny”

Carrier Agents are the independents that operate, known as Terminals, or Dispatch offices. These are the people who contract with the Volume Carriers- These are Independent Owned- However contracted with the Carrier to represent the Carrier, Maintain the Agents fleet of trucks, and are contracted at a rate between 70-75% the Truck Owners are paid via lease agreement to the “House” Carrier- Typical, rate is in between 78%-88%–I have yet to see one at 90%– Usually rate is set at 85% of gross- between the Truck lease agreement- and the Carrier Need and any overages from unpaid fees- or discount to the rate collected for the truck and Fee Assessment.

What you typically find in this Carrier Agency agreement- and the one’s that run them–Are the following —- Agency owner- usually ran or worked for a former Agent of another carrier, running similar fleet characteristics. The New Agent- knew the operations from the former Agent–That one day–They (drivers and new agent) begin discussing moving to another agency–Owned by NEW AGENT—When the new agent essentially takes all the trucks from the former agent- Takes all the former agents freight- Closes the business over night- However maintaining the client base with help of the Carrier—and the Truck Fleet—–

I know quite a few of these people, The majority are like this and will take from anyone, like the thieves in the night…..Always wonderin why they have issues.

These type of terminals or locations are the bread and butter of the Volume Carrier that needs the Volume Size Fleets without the ownership of the in-house Carrier overhead– The Carriers use this as a Fleet upgrade—-Each one comes standard with 10 trucks leased on to the Carrier Operations, flying Carrier banners and papers- Corporate handles the back office or Operational necessary details-  while the Terminal/Agency are the Sales, and Recruiting for their fleet.  The Terminal Invoices under the Carrier-  Collects trucks paperwork-  Sends to Corporate to be entered and stored, collected and issued for payment.

The Truck Agents have a few legs to profit.  Typically-  Pay to their Agency is 8-10% of the gross- Plus overages on the detention, or any other charges they can get from the customer.  10 trucks running at a minimum 5 days- Average rate 1.87 per mile 500 miles average per day= $46,750 gross per week-  Truck agent will roughly earn at a minimum of $4675 for the week.  Out of this money 10 trucks will be a recruiter, and a dispatcher- plus the agency owner, Lease payment or rent payment on the terminal location, office needs–internet, a few phones, few computers—depending on the actuality of the Agency outlay-how the Agent chose to open the facility.

A few of these are solid people, typically the ones that take care of their fleet, maintain freight with a solid base of customers who stay with the Agent because of their standing of taking care of the customer, keep drivers because the drivers help recruit for them-  One of the ones I know—Retired now, however were with the terminal agent before they were given the terminal.  She retired from the agent, and went on to other types of operations that she owns with her husband.  She still has people begging her to come and work for them……She had worked for the Agent when he was a terminal manager for the Carrier-  Can you say he was in the right position at the right time?!?  Trust this–She–was the reason that terminal stayed together——She was paid very well—from that new Terminal Agency—-pretty close to 80 trucks could have been more—Her and her husband —Family friends, or ours.  Shit, thinking about it–I remember them getting married——-Yeah, he got lucky!!  Right place at right time—Again….

Often the Carrier, keeps ownership of the facility- Under their ownership–these are the Carrier Terminals or DropYards-  These Volume guys understand they can pay a premium- 5% to the office and collect the other side in house to the bottom line.  Depending on the Carriers expansion plan to best profit for the owners.  They maintain and are full responsible for all aspects-  They come with freight booking and backing from the Corporate Customer Base, Terminal Managers are the Sales to the customers, typically having dispatch answering phones, a onsight safety guy–Like an assistant manager for the terminal, and 3-4 dispatchers in the office—-Usually they are 50 plus in fleet size for each terminal-

The Independent-

These are the Dispatch Services, that dispatch for the carriers needing backoffice support-typically the small fleets that do to the ownership working within the fleet as a driver-they need someone that will keep him and his guys running and home for hometime.  They are the small businesses in the trucking community.  These guys range from locations that also, are Brokerage Agents, and Carrier agents for other fleets.  To the dedicated guys doing exclusive work for Carrier.  They do most things that these small fleets can not properly maintain-  From Billing and Collections, Safety, IFTA reporting, filing required taxes, recruiting—-This depends on the owner of these Independent service providers.  Some are as needed, some are exclusive.  All support the Carrier functions in one capacity or another.

The primary difference is that the large volume Carriers can place whole fleets on at one time, not concerning the cost of the insurance with their outbound….Self Insurance is a mother!!  The fleets go on- billing increase next month half a month free, to earn their increase—–as you can tell from the numbers above—–even a 10% margin on one week will take care of the majority of their costs.  More independents could do this, Fleet size increase, by utilizing the tools available through the various providers of services- if they would simply be able to better utilize their needed service providers.  “Phone calls”.

Independents have better grasp for the Small guys because they go above and beyond the call of just dispatch.  Understanding of the whole picture, clear out look, and advisement is primary.  The Independents have one function, profitable loads, clear understanding with the Carrier Ownership needs, dedicated account manager typically, and a Carrier as a customer that says-  We need this-  We need That-  I want to see my guys more on these….Recruiting to build—-Finding those owner operators to lease on to the Small Fleets.

The Independents just have more clients-   fewer trucks- customer base that knows they want a small fleet who they can call on the phone without waiting 20 minutes, or if busy will return a call back.  The Carriers are dedicated because they understand that the independent is growing and building their business with the other guys.  Everyone gets paid at same time, and the Independents know how to handle all the service needs of each Carrier.—They pass all paperwork sign on behalf of all the Carriers, sign off Fuel Cards, handle factoring services, post payments and process collections.

How the contracting works

Now the independents, which even though the name implies, they still are not independent-  They contract with the Carrier to function as the “Central Command” basically for a percentage of all billable.  They earn from the gross-like all the other Trucking Agencies or Trucking Agents-  They are not exclusive to the one carrier- this is because they handle, typically multiple carriers, and typically have several office personnel that are Account managers/Dispatch, Night on Call staff, Recruiting, Safety and Office– However, over my time in the Industry, these guys best operate when Their Accounts are below 30 trucks per Dispatch, and have a Brokerage to cover the overage of freight.  This way no opportunity is lost to turn more loads.  The Brokerage should be as a standby-  The Brokerage must have a clear understanding they are the last resort, ALWAYS after the fleets-Contracting with the Firm.

Agency agreement is the only way these are truly independents.  With that being said, the Trucking Agents above are Independents as well, what we find the most is that these are usually Exclusivity agreements, and they only are suppose to be functioning for that Volume Carrier.  Volume is the key and gaining considerable volume can command lower rates, many times increase in profits as well–through the sheer volume.

Operational Standpoint-NoName

My operational standpoint is that the Dispatchers under any office that we have, has 1 Account Manager/Dispatch per every 15 trucks–Either 1 fleet of 15, 3 -5 truck fleets, or even 15- single independents.  It keeps everyone even keel.  Not too much but not over worked as well.  Everyone spreads the workload out- That is just my preference.  Like you have already realized, I utilize the guys I know has the knowledge.  Guys who want to build, want to help the trucking industry, and have years experience driving and dealing with the customer base, before they actual step foot in the office and needs of Carrier that they come in from the back side.

It takes a minute to transfer what you know, to what you are seeing with fresh eyes…Relearning, if you will, what you already know and understand.  Putting 2 and 2 together–then hearing from the otherside of the phone from the drivers you want to be their best—because that was you—that is the potential next leader that will help you build another fleet, or process Owner Operators to their insurance, and make sure they are paid by the owner; pulling the load on site with his new driver–Interviews are handled in-house–and are phone calls so the new recruit–and owner taking the risk, clearly understand each other.

The guys clearly understand we recruit for the best interest of the Carrier–They are the reason why every driver is paid, many times:  the true rate they should be paid—75% or more of the gross-  Flat Rate-  Fuel Surcharge—We do not, do that bullshit here– Fuel Surcharges are for the ones that do not know what rate should be, fuel surcharge gives them fuel money coverage set at a certain percentage of gross………My guys set their minimum rates—if it is less—-they don’t move–unless they have a 800 mile deadhead to the client—or they want to go somewhere we locked a good lane prior.  They know we looking for the money—–$1 per mile can not cover shit but fuel and the driver—-and that is if they are running 43 cent per mile ran.  The guys that are the best–and know their shit—without the headache–are the guys that understand the rates, lanes, and customers throughout their career…..Go ahead lie to the man you want…..he is gonna start laughing and drive his ass to the office, —- lost a dispatcher that way—he wanted to go back to driving. So I got him a truck from another owner-  Pay was based on Truck Profit-  Guaranteed 50% of the net–Oversized Heavy Haul-everyone was happy—he learned his lesson, and I had to find another driver looking to move up—Luckily the Carrier owner wanted in—so why not!!  His rules are simple—He gives us 2 yrs and then we go help him set up his office – at 30 trucks-  him and 2 others, We are guaranteed money on freight for 5 yrs -5%.  Teach them and the legacy will grow.

Contracts are the easy part.  We sign contracts all the time—a trucking company does that with every customer.  Insurance is always “additionally insured”-  or some other request.  Broker contracts with these guys get crazy—I have sent some contracts back for the carrier with redacting all through them—-Think –wow— are they going to even take that back.  Do you really need that much bullshit to protect your clients that contracts with 5 of yall?  Exclusivity comes when it is guaranteed-Contracted By the Term, prepaid for the term or even first 3 terms.  That is where these brokers forget-

Yes, I said it!

 

Post Script

That is part of the reason—why I am no recruiter!  I do not do that well, with the bullshit—Do not like it—Oh well…..It is what it is.  I was not brought up that way—I was the grandkid that was expected-  I did what my uncles did, I worked with my dad, uncles, and granddad in the fields, on trucks and tractors, trailers.  If it had to be done, I was the one doing what they did.  So I can’t fluff –I tell you what who and what —however—-if you are still in I get you moving………..If not—I do not have the time to talk about bullshit……My concern is with the ones who are here–the ones that are required to deal with me–cause the Ol’ Man likes me or some bullshit —-who cares–

 

Looking for Brokerage Agent- Tell Him MMT sent you!

 

 

 




 

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