How to start your freight broker bussiness?

[Injun]

The term "back haul" doesn't work well with independent O/Os for the reasons @Tazz pointed out.

It does work in my case. I am one of those poor, ignorant fools leased onto a large company. I run on a dedicated account. Usually, I return to the distribution center with an empty trailer, although I get paid loaded mileage and fuel surcharge for the entire round trip. WalMart arranges to pick up much of the more local freight that goes into the DC. When a load needs to be picked up on the way back to the DC from where ever it was I emptied out, I can be selected to stop and get it. All I get paid for is the additional mileage and extra stop. I do not get paid as if it's a whole load in and of itself. It is part of the load I hauled out. It is included in the load number and dispatch when I leave the DC.

When you're scheduling such loads for O/Os, they are individual, stand-alone loads. They have their own dispatches and their own load numbers. For this reason, they are loads, not back hauls. Each load, for the independent, needs to stand on its own merits, not be included in another individual load. You will never sell a "back haul" to a shrewd O/O who has experience and knowledge of the industry. As you can see here, some even will take offense that you would attempt to insult their intelligence by suggesting it.

 

[Anthony Sortino]

Six years as a private chauffer/roady and a few months OTR.

That's an impressive resume for someone who wants to run businesses for Owner/Operators.

It was a Freightliner Super-10 Sleeper with a 53' van and this was my tour schedule: http://www.jumptour.com/tour_cities.php With entertainment driving, no truck, no show. No matter if I was going from NYC to Baltimore or Orlando to Seattle, I had three and a half days to get there and was never late, not once.

 

[Injun]

You were running a private coach, not for hire. You knew your schedule months in advance. Since you were running a not-for-hire private coach, you were not subject to some of the constraints applied to freighters.

You were a chauffer, only rather than hauling people, you were hauling their stuff. It was no different than driving a U-Haul except it was bigger and you didn't have to rent a motel room.

You have experience driving, but you have no experience in the industry.

The article you quoted is very biased and only tells half of the story. You cannot acquire experience through articles.

Do you have a degree or any classes in business? You are obviously qualified to function in the entertainment business. If I was going to consider your offering, I would want to know what qualifies you to run an OTR business.

So far, I'm not seeing it.

 

[Anthony Sortino]

I have 6 months of working the ports, a year of hauling freight in a big rig, and 2 years of hauling freight in a CDL rated box truck - I built, owned, and operated my own recording studio which, as I've stated, is a very logic- minded craft, and agree: I am in no position to start a dispatch service tomorrow. But as with any venture I've ever embarked upon, I have a fire beneath me after seeing this is even a service. With recording, at any given time, a session consisted of up to 24 or more tracks. I know it may not seem relative but think about it. 24 tracks all with different processes occurring at one time, all of which I was responsible. Put a guy like that on the board and... let's just say of all the positions available to a driver no longer available/willing to drive, that is where I feel I will shine/am very appreciative for all I have learned in two days time and am thick-skinned enough to hear what anyone has to say. That's how learning is done.

 

[Duck]

You were running a private coach, not for hire. You knew your schedule months in advance. Since you were running a not-for-hire private coach, you were not subject to some of the constraints applied to freighters.

You were a chauffer, only rather than hauling people, you were hauling their stuff. It was no different than driving a U-Haul except it was bigger and you didn't have to rent a motel room.

You have experience driving, but you have no experience in the industry.

The article you quoted is very biased and only tells half of the story. You cannot acquire experience through articles.

Do you have a degree or any classes in business? You are obviously qualified to function in the entertainment business. If I was going to consider your offering, I would want to know what qualifies you to run an OTR business.

So far, I'm not seeing it.

At this point he's in the research phase. That's what he's doing here. Research.

But if he was going to do it the way I described in my first post here, he'd basically be doing what an O/O's wife does, .. how much industry experience does it take to make phone calls & find loads, then discuss them with a driver who can't do it himself because he's driving, patch a 3-way call together, log into a shared e-mail address to verify receipt of load confirmations, etc.? Unless he's actually BOOKING loads on behalf of O/O's and committing them to loads he hasn't run past them yet, how can he screw up, other than wasting time as he's learning?

 

[8978]

@SkateBoard has stated that hes used a service like yours but no longer, but I believe she stop doing it.

Yes, I did have a girl that did dispatching for me. I paid her a flat $100 a week. She stopped doing it due to family problems.

 

[Tim]

So then the math, at a time when smart drivers are cutting costs, basically comes down to this:

Leasing on with a carrier vs. being independent and hiring a dispatcher that is working for you for a percentage.

Let's look at that. Here is an excerpt from an article online entitled, "Beware of the Wolves: Leasing to a Carrier."

Most companies have leasing down to a science. They know they can make a lot more money off a Owner Operator than they can a company driver. There's hundreds of laws to protect employees, but not many that protect subcontracted labor. That would be you.

What most Owner Operators don't realize is the company that does the leasing usually has more than one company name. They usually own a brokerage or maybe 2 or 3 brokerages? You just never know how many people are cutting into the freight rate before you get your share. The brokerage brings the load in and then takes a percentage off the top. Lets say they take 20% before handing it to the company you leased to. Now if the company your leased to takes 30%? How much are you actually getting paid? If you haven't figured it out yet it's 70% of 80% instead of the 70% of the 100% you were led to believe you would be earning when you leased on. I'll show my math to make sure everyone follows what I'm trying to explain here.

The Carrier has a sister company, they'll be the Brokerage. They get a load from a shipper paying $1000.00 going 600 miles. The broker pulls 20% off the top then hands it off to Carrier your leased to. Now the Carrier has a load for you that pays $800.00 and their going to take 30% of that. That leaves you with a load that's paying you $560.00 . Now just think about that for a minute.

You pay for the fuel, insurance, truck and trailer payments, plates, permits, maintenance and you do the driving. It may have sounded pretty good when the recruiter explained it to you, but now your in trouble. Most of these companies know the less money you have in your pocket the harder you'll work. Lets face it when the bills are due and there's no grocery money, everyone of us will do what we have to do. They may throw you a bone every once in awhile, but they'll never let you earn enough money to run off and become a Independent Owner Operator.

Over the course of a year, what does that come to - how much money has the owner operator lost by being leased on with a carrier - wouldn't he or she have made more running under his or her own authority - are you telling me that running under one's own authority costs more over the course of a year than having a carrier yank 30% over a 12-month period after the broker has already taken his 20?

Now, let's say you are an independent O&O who, like I described above, doesn't want to have to deal with any of the dispatching duties while you are on the road. YOU JUST WANT TO DRIVE! Driving is hard enough as it is without having to haggle with brokers, worry with backhauls, etc. The going rate of the dispatch service providers I've researched thus far is a.) a flat fee of $250 a week or b.) 6.9% of the load. Over a year's time, how does this compare to the above - you paying to run under your own authority with someone working as your dispatcher vs. the percentage you pay to lease on with a carrier while still needing to pay for the fuel, insurance, truck and trailer payments, plates, permits, and maintenance?

At a time when smart drivers are cutting costs, it's at least worth looking at.

Thats an interesting read but its a LTL Hot Shot forum.
Now first thing is if I'm gonna lease on to a carrier for 70% they had best be paying in full for my plates and Ins. with NO CHARGE backs.
Now I dont know where your getting your researched numbers at that a dispatch service is pulling in $250 a week or 6.9% per load. IMO thats insane.
You wanna be paid quick and I wanna be paid even quicker.
If your gonna pull off 6.9% per load you better be paying me after every delivery.
Now I'm leased to a carrier that, up till this week charged 5% and I pay for every thing. If I want quick pay thats charge back to me at what ever the broker charges, any where from 1.5% to 5%.
So the most I was out is 10%, if I wanna wait the broker out its 5%.

Now starting next week there changing the lease and upping the percentage to 8% BUT I no longer will have to pay any broker quick pay percentages. Even with them taking more I got a raise in pay.

 

[Matthew benegasi]

I'm new to this site. however I know this game ,I have driven many trucks and hauled a large variety of freight, however I am not a truck driver . And I have come to a conclusion about truck drivers who want to get out of the truck and behind the desk. In general some can perform well as dispatchers, simply because they understand trucks. But the method of operation and or the priority of the thought process isn't conclusive to ever maintaining an operation of more then a few units, let alone play the freight broker game. Let me be clear this is not to say truck drivers lack intelligence by any means. it has more to do with where they started to learn the trade. It's actually better to start behind the desk and then learn to drive the truck rather then just driving a commercial truck. I could write a book as to why I believe this to be true , which obviously I can't on this venue. But reading these responses to Mr Sortinios vision really just solidifies my opinion