Monday, August 20, 2018, 07:39 AM

August 14, 2018 Brian Straight, managing editor

https://www.freightwaves.com/news/cashflow-corner/finding-freight-with-direct-shippers

Many truck drivers get their start hauling for one of the larger carriers like a Schneider National or a Swift, for instance. After a period of time, though, the driver decides more money and more freedom is available if they go it alone.

Welcome to your own authority. Running for yourself offers plenty of challenges, but some would have it no other way. One of the biggest challenges will be finding freight. Load boards, and now apps, offer plenty of loads, but a quick search of social media finds complaints about the “cheap freight” that populates these places. Cheap freight, aka loads that are priced extremely low, abound on load boards. The problem is that they wouldn’t be there if truckers didn’t accept them. Filtering through the cheap freight to find good-paying freight can take time, though, which is why some advocate for shipper direct freight.

What is shipper direct freight? This is freight that you, as the owner-operator or small fleet owner, contracts for directly with the shipper. It has several advantages over load boards, namely a more consistent nature and often better paying as you are negotiating directly with the shipper, cutting out the middleman. This can also benefit the shipper by lowering the overall cost. You are also able to quickly react to issues or concerns and build a rapport with that shipper that leads to better overall service and, perhaps, more business.

The key to getting that direct shipper freight, though, is not an easy path to take in many cases. Unless you have an in already, the process starts the old-fashioned way, with boots on the ground. It starts with research. Before you start contacting shippers, ask yourself a few questions.

What rate do I need? It’s important to know what hauling rate you need to make the lane profitable. Is $2 per mile sufficient, or you do you need more to sustain your business? Don’t start contacting potential shippers until you know the minimum rate you need for sustainability – and then add a little to it to give yourself some negotiating room. Research what rates along that lane are going for – now and historically - so you are not under-pricing or over-pricing your services.

What lane do I want to run? This is important to help you identify potential shippers. Find a lane or lanes you want to operate in and then make a list of shippers along these lanes to contact. A more targeted approach will lead to better results and more likely, a group of shippers clustered together.

Is there enough freight along this lane to sustain my business? This is a question that many people ignore. Getting one customer along a lane is a good start, but if that is the only customer, it might be a losing lane. Be sure you can get enough freight along a lane to keep your trailer filled and revenue-producing.

Is there return freight or will I have to deadhead back to the next load? Just because there isn’t return freight from a destination doesn’t mean you should turn down that business, but you need to know this when bidding on a contract. If there is no return freight, your rate needs to reflect the costs associated with deadheading to the next location that has available freight.

Look for smaller shippers. Smaller shippers with more infrequent loads sometimes have a harder time booking capacity from larger carriers. And there are a lot of them, so look for these types of companies that have a need for reliable, cost-effective shipping options.

Once you’ve identified potential shippers and set potential rates, the hard work now begins: getting a contract. Social media has made it easy to reach out to many people quickly, but consider personal letters or trying to schedule a meeting with decision makers at the shipper to make your presentation. Making your pitch through an in-person presentation can be more effective than simply sending along a document. Be professional and be prepared. Anticipate questions the shipper may ask, such as what happens if your truck breaks down or you get sick? Make sure you know everything you can about the shipper, what it ships, where it ships, and how often. And make sure you know everything about your own business – it’s amazing how many people get tripped up on a question about their own business.

In your presentation, it is often best to focus on service, not price. There is always someone willing to haul it cheaper, and shippers who are focused only on price will eventually leave for that cheaper carrier. Instead, sell your services – what you will provide, your attention to detail, your communication skills, your ability to treat their freight like it is your own. Do you offer any additional services that others may not? Let the shipper know this, especially if it might pertain to their business. Don’t overpromise but deliver on all your promises.

As you look to find direct shippers, keep in mind that a good rule of thumb is not to let any one shipper become the sole source of revenue for your business. It’s nice to have only one customer, but if that customer bolts, your business goes with it. If possible, don’t let any one shipper account for more than 25% of your overall revenue. A good freight mix also can keep your truck moving when there is a pause – maybe the shipper shuts down operations for two weeks each summer.

The success of landing a direct shipper depends on your own knowledge of your operations and its needs, your knowledge of the shipper and what they need, and a lot of hard work to land those initial accounts. Doing so, though, can provide a good source of revenue that you can build your operation’s foundation upon.

 


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DOT's Chao calls hours-of-service rules 'inflexible'
By Mark Schremmer, Land Line associate editor | 3/27/2019
Original article click here: 
http://www.landlinemag.com/story.aspx?storyid=73968#.XJ4YuhNKgSJ

U.S. Department of Transportation Secretary Elaine Chao described the current hours-of-service regulations as “inflexible” during a U.S. Senate subcommittee hearing on Wednesday, March 27. The comment was in response to a question from Sen. John Hoeven, R-N.D., about the Modernizing Agricultural Transportation Act, which would provide regulatory relief for the transportation of agricultural products. “Well, this is what happens when there’s a one-size-fits-all solution – it doesn’t work across the country because our country is so diverse,” Chao said. “And obviously with electronic logging devices, that created hardships for small truckers and also created hardships for agricultural interests, farmers, people who are hauling in rural areas. “But the issue, as it turned out, is not the electronic logging device, it’s the hours of service. So we are actually looking at that as well on a bipartisan basis, and we hope to come out with some conclusions on that. But, again, we’re very much aware of the hardship that these inflexible rules have placed on rural and agricultural interests.” The testimony came only days before Chao is scheduled to provide a regulatory update on Friday, March 29, at the Mid-America Trucking Show in Louisville, Ky. According to a news release, Chao “will be providing an update on the Department of Transportation’s efforts on safety, infrastructure, truck parking, and reducing burdensome regulations on truck drivers.” Many truck drivers hope the speech will provide some details regarding hours-of-service reform. In August, FMCSA issued an advance notice of proposed rulemaking regarding possible changes to the hours of service. The agency hosted five public listening sessions, and a common response from OOIDA and truck drivers was that there needed to be more flexibility within the rules. The FMCSA received about 5,200 comments on the possible rulemaking, and the agency is expected to announce its proposed changes to the hours of service soon. OOIDA said it is hopeful that Chao’s testimony hints at positive changes regarding the hours of service. “We appreciate the Secretary’s conclusion that inflexible rules like the ELD mandate present distinct hardships for segments of the trucking industry, especially small businesses,” said Collin Long, OOIDA’s director of government affairs. “We hope this is an indication that the Department will follow the advice of truckers and push for greater flexibility in the current hours-of-service regulations when they issue a notice of proposed rulemaking in the near future. “Modernizing hours of service will not resolve our outstanding concerns with the ELD mandate, but it will be an important step in providing drivers greater control over their own schedules and improving highway safety.”

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