Newbie Wants To Start A Trucking Firm.

This is just a tough business. The one thing that helps people in any commodities business is benefitting from the economy of scale. The big companies gain some advantages due to the leverage they can exercise on vendors, lenders, and customers. That makes it tougher on the smaller companies. Even with the advantages that come with being one of the big boys, this is still tough. I was looking at some trucking company's performance in the markets recently and noticed J.B. Hunt, one of the biggest and most innovative players in this game, was showing increased revenues and reduced profits. Nothing comes easy in the transportation business.

To expand...the mega carriers have a lot of clout with dealerships and parts departments. Because they maintain the trucks better, DOT is more likely to inspect a small company or O/O truck over a mega carrier. Getting your truck repaired? guess whose truck will get bumped to the back of the line so the mega carrier can get their truck in and out of the dealer? all of it is a customer service industry And guess who gets a huge discount for the sheer volume? not the little guy

great for drivers, sucky for competitors such as yourself.

Welcome to the forum... The points made already are good ones, a little more food for thought. The country is basically divided into various different freight lanes. Your in the southeast. It is and likely to always be one of the cheaper lanes. I live 2 hours from Atlanta. The freight I bring in always pays much better than the freight coming out. That is a big consideration. The atlanta area has some smaller freight brookers you may be able to get a deal with... Most of the bigger ones require a year in business before they will deal with you. You didn’t mention what type of freight your looking to haul... Makes a difference on the cost of the trailers. A friend of mine did a startup last year with a flatbed. Cost him right at 200k. He has a dedicated customer so he dosen’t have to mess with brokers, unless he chooses too for backhauls. OOIDA is a great resource as well as Kevin Rutherford. You can google his name for a link to his website. I wish you the best

Rainy,

Thank you so much for your reply, this is exactly the kind of information I am seeking. I am fully aware of the "sour grapes" as EVERY industry has the old, bitter, angry, "everyone is an a-hole except me" type. Like you, I have learned to just smile and move on. There is nothing to be learned from negativity.

Your description of your driver terminals blow my mind! I had no idea such amenities were made available to drivers, very cool.

I agree about driving for a year or so to learn driving, but I also know this will not teach the "business" of trucking. My business partner and I need to learn both. My biggest complaint when I was a regional jet pilot was all of the BS before and after the flight-- THIS is what made the industry tough. If all I had to do was come in, fly my trip, and go home; I would have retired from this job.

The "lease-to-own" sounds challenging at best. I know corporate America and I know no one does anything without a spreadsheet. Any company leasing, loaning, etc., is making a margin both on the trip and the equipment lease/loan.

The other suggestions to look at OOIDA were very helpful and I did join last night (although I am still waiting for my member number).

Thanks again for all of the experience and knowledge you folks have shared.

Chris

And most boards i know of are a paid subscription.

As most of us are company drivers we do not deal with Profit to Loss ratios. That is a lease op and owner op requirement. As company drivers, all we worry about is getting our miles or hours depending if OTR , regional, dedicated or local. we dont deal with load boards and brokers.

My company offers many bonuses for safety, fuel economy, on time delivery, christmas bonus, all of December staying out bonus. i get other incentives and bonuses when compared to other drivers on my fleet managers board, about 100 drivers. We have a match 401k, and health benefits whose premiums are cut in half after the first year. this is a driver retention incentive. We have state of the art terminals including indoor basketball courts, 24 hour gyms, hotel like "bunk rooms", pool tables, spas for hair nails massages and facials including a steam shower, a movie theater, and serious discounts on Prime own hotels and a casino. Our terminal even has short term storage lockers, dog kennels and pet washes as well as long term parking. A 24 hour cook to order cafe, a mail room with boxes to rent and a huge store where i can buy Nikes, undies, tools, and much more.

Most drivers want a decent cpm , home time more than 4 days per month (typical OTR), and more regional routes that let you get home more often. Of course the other things you mentioned, paid vacation, holiday pay, christmas bonus. Many drivers love their OTR company but when issues at home strike, they need to go elsewhere to be home.

And the things you mentioned in your first post about all the negativity...most of that i never deal with. The large companies have newer equipment they maintain and we shutdown in bad weather and no one questions us.

Most of the negative stuff you see online is a bunch of sour grapes from people who tried and failed as drivers.

Look up my company, Prime, and almost every negative comment or review is from a newbie who thought he could lease a truck and start an LLC and failed due to lack of knowledge.

It has been suggested you drive first because it is like me saying..."Hey...i want to open a neurology practice, and since my brother is a surgeon i know what i am doing. Would you be my first patient? I cant wait to cut open a skull ad operate."

i posted all about Prime to give you an idea what you would be up against. if someone like yoi said "come work for me" i wouldnt leave what i have. And honestly, you wont be able to insure new drivers.

Ill answer any questions you have to the best of my ability.

Good info, I really appreciate your post.

Hi Chris,

I'll answer your questions but understand you are asking some basic questions in a very complicated field where there is high startup costs and very little room for error. Half of running a business is the legal side like getting authority, insurance, and paperwork, permits, etc.

If i were you and serious i would start by driving a couple years and maybe training with an o/o.

1. Otr Drivers usually drive between 100k to 120k a year. Deadhead miles vary, but i usually drive between 100 and 200 miles to get to my next load.

2. The main load board is DAT. You will not be able to sign up without a dot#. There are other boards offered by other companies like landstar, jbhunt, coyote, tql, and convoy just to name a few. None of these companies will let you even look at their loads without having your authority and most of them require you to have an active authority for a certain amount of time before you can book loads with them.

I completely agree, but I have to think there is room for a small, driver-friendly, lean, efficient, quality, trucking firm.

I am not seeking to compete with the big firms, I know that is folly, but I can nibble at their edges ;)

This is just a tough business. The one thing that helps people in any commodities business is benefitting from the economy of scale. The big companies gain some advantages due to the leverage they can exercise on vendors, lenders, and customers. That makes it tougher on the smaller companies. Even with the advantages that come with being one of the big boys, this is still tough. I was looking at some trucking company's performance in the markets recently and noticed J.B. Hunt, one of the biggest and most innovative players in this game, was showing increased revenues and reduced profits. Nothing comes easy in the transportation business.

The smart thing to do would be to get some trucks and lease freight from a mega carrier for a bit. I keep talking about Prime cause that is all i know with 3.5 yrs driving for.them. You get dispatched from Prime fleet managers, the drivers get to use our facilities, i even think they get the Prime fuel discount.

But Prime partners with small trucking companies and gives them a percentage of the freight.

Prime Partnerships

Many of these smaller fleets are leasing their trucks to drivers and taking a percentage of the freight as well as getting the lease payments. The drivers usually pay for fuel and maintenance, but get the freedom to take as much time off as they want and can accept or reject loads.

The mega carroers will want newer trucks though and have requirements. You cant use a 2012 and think they will take it.

Prime Terminal Entrance & Inspection Station

Prime Terminal

That terminal video is old and a ton of building has been done. Added features.

My friend owns a truck and runs Fedex freight. she was going to lease trucks to drivers who could then get loads themselves from load boards. They give bonuses to fleet owners based on how many trucks they have and how many loads are run per month, as well as truck availability.

The problem? Finding qualified drivers with impeccable records Fedex would accept. And they want mostly teams which are hard to keep unless you are talking relatives or spouses. She planned on 5 trucks and went through background checks for well over 200 people. Fedex accepted 2 of them...me and my boyfriend. By the time she was ready to buy the trucks...the price of used trucks went up...like doubled because of the ELD mandate. Im used to driving new trucks...i didnt want to settle for something 5 years old with 700k miles on it.

the type of freight you run will determine whether you need team or solo drivers.

Just thinking about all.of this is making me appreciate being a company driver lol

oh..and the make of truck will affect fuel costs. Volvo, Pete and International have more driver comfort but are heavier than Freightiner so they consume more fuel. Are you planning to run over mountains? run heavy loads like meat or beer? thats more fuel and more money.

I completely agree, but I have to think there is room for a small, driver-friendly, lean, efficient, quality, trucking firm.

I am not seeking to compete with the big firms, I know that is folly, but I can nibble at their edges ;)

There are literally thousands of small firms "nibbling at the edges", so there isnt much edge left to nibble at.

Plus they already know the in and outs of the business which will give them a huge advantage booking loads over the new guys. I remember when I was thinking about buying my own truck before I even had a CDL most of the load boards work on senoirty, with the company which means you have to start with the low paying loads or loads that take you to a freight dead zone.

I would advise becoming a driver first, no it will not teach you everything but it certainly will help.

If you want to run company drivers, be sure to pay them on W2 not 1099.

Dont bother with the factoring companies cause you can easily wind up with a negative bank account and no money to pay drivers or make repairs if a couple customers do not pay. Not only do the factoring companies take a percentage fee from you, but months later they can take back the pay advance if the customer defaults.

As you can see...i have thoroughly researched truck ownership/leasing due to my boyfriends hopes and dreams. I have yet to find where it is worth the time and aggravation.

good luck

I agree about driving for a year or so to learn driving, but I also know this will not teach the "business" of trucking.

You could not be further from the truth. Everything you spend on the truck, whether the company, or you pay for it, should be documented. If the truck goes into the shop, and you have to stay in a hotel, document it. Getting fuel and Def? Document it. This will show you an idea of the cost to run the truck, and driver.

You may not see the actual dollar amounts on your BOLs, if at all, but document them anyway, the location, specifically. This will allow you to start to see freight lanes.

I could go on, but hopefully you start to get what everyone is saying about getting driving experience.