Of course they made that same deal with all the drivers at the company. So now all of you get your trucks and head out there to get it done.
In order to get freight your company has to hire salesman. These salesman build contacts and go out there in a very competitive environment to try to get enough freight to keep everybody moving, and do it at a price that the company can be profitable. Well, the more promises your salesman can make to the customers, like keeping spare trailers at their facility, hauling loads on short notice, and guaranteeing that a certain percentage of the loads will be picked up and delivered on time, the more money your company can charge the customers to haul their freight.
Often times it's especially beneficial to both your company and to your customers if the two sides can agree to terms on a contract. That way your company will be assured to have a certain amount of loads available at a certain price and your customer knows they can get their freight hauled under certain concrete terms. It takes some of the unpredictability out of doing business for both companies.
Being in business has a lot of ups and downs. It can be highly volatile at times. Anytime you can remove some of that volatility you improve the likelihood that your company will be successful into the future.
Here's an example:
Say your company, Alpha, knows their cost of hauling freight is about $1.05 per mile. They contact a manufacturing company, Bravo, that needs anywhere from 5 to 15 loads hauled per day, overnight, on short notice to a group of customers it serves. Your company already has plenty of drivers available to haul even the maximum number of loads they may need each day and they also have enough spare trailers that they can keep at Bravo's premises to allow Bravo to load them on their own schedule.
Bravo knows their cost of doing business and figures they can pay up to $1.60 per mile to have their freight hauled to their customers. So both sides sit down and agree to a price of $1.45 per mile for each load. Perfect!
Now Bravo doesn't have to worry about being able to get their freight to their customers on time for a reasonable price, and your company, Alpha, knows that they will be getting several loads per day from Bravo at a price that will be profitable for them.
This type of contract is common in the industry. Larger trucking companies have a multitude of contracts set up along with the ability to find more freight from other sources anytime they need it. Here's where you come in.
Obviously your company has to fulfill the terms of their contracts and also the terms of any individual loads that they acquire from day to day. The salesman make promises that you as a driver must fulfill. If you don't, it's pretty obvious what will happen. Your company can be penalized or can loose these contracts altogether. Happens all over the country everyday. Companies gain or lose contracts based on price, performance, other services they can or can not provide, or a combination of these variables.
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