Dear long-time readers, hold on to your hats… I’m leasing to the same company I’m opening the new terminal for.
Did I really just say that?
I know some of you may want to kick me for my reversal in thinking, but I have my reasons. And of course I’ll tell you what they are, that’s the whole point of this post, after all!
Now, if you want to take a stroll down memory lane without having to backtrack and read my old posts, right out of the gate I leased my truck to a little local outfit that turned out to be as crooked as the day was long. Naturally, that experience left a bad taste in my mouth, and as I’ve learned over the years since then, my dislike should be more specifically directed toward the specific crooks I dealt with and not necessarily to the prospect of leasing in general.
What really finally pushed me over the edge to even re-consider leasing is the simple fact that a one-truck operation just can’t compete with the big guys for the good accounts, and in my particular area the oilfield is really heating up, so to get myself positioned to take advantage of that upswing in potential customers, I had to have some edge.
In my particular case, that edge has to be a big outfit that needs my truck as badly as I need their customer base. So it may turn out to be a match made in business heaven. If there is such a place. Well, let’s just pretend that there is.
Back in the early days, my first lease was confusing to me, not having been in the business at all, and I didn’t know the questions to ask, the things to look for in the lease, or what the h-e-double toothpicks I was getting myself into. And obviously that made me easy pickings for some unsavory folks who happened to be pretty good at spotting rookies and capitalizing on their ignorance, but who really sucked at running a trucking company. Good crooks, bad businesspeople. It happens…
But I have to say after really learning how this all works and paying attention, that is not the rule. It’s the exception.
A lot of guys get into hotshotting like I did and get burned, and it puts them on the wrong side of thinking from then on. At some point you just have to step back and take a look at the big picture, how the big boys play, and figure out how to make that work. After all, that is the way the game is played, if you want to play at all.
And if you do want to play, you have to learn the house rules and use them to the best advantage you can.
And that’s what I’ve been doing these past few years, schooling myself on the house rules. Hopefully by now I know a whole heck of a lot more about the business, how it is and is not supposed to work, and along with that, I’m able to figure a lot of things out for myself that were a mystery to me back then.
That all said, now that I’m leasing, I’m savvy enough to want to know what I’m getting for the money I’ll be giving over on the lease.
As leases go, most are set up on a percentage basis. XX amount to the truck and XX amount goes to the leasing carrier. Doing research on this subject, I’ve talked to many others who are leased to this outfit, interestingly, I haven’t heard any negative comments.
I’ve read a few scattered on the internet, but those were restricted to complaints about specific terminals and uneven distribution of the work available. AKA Nepotism… which unfortunately happens in some offices in all forms of business (and government too, for that matter… but that’s another topic entirely and I’m not touching that one…)
To the point… What I’m getting in this case for the money is really, in a nutshell, quite a lot.
They (my new carrier) take care of the authority, IFTA reporting, insurance, paperwork, cutting checks both to the truck and the driver, they deal with the headache (which it would be to me) of doing tax & social security withholding, offer a 401K with some matching, and even have an employee stock purchase program once a person is with them for a set amount of time. After Obama-care kicks in in January we’ll have health insurance available too.
Aside from getting rid of my paperwork hassles, they also offer a huge and extremely busy network of customers to which I will have access, and the entire supporting cast of office type folks to handle backgrounds, driver qualifications, and all the bells and whistles that will make my job easier.
And of course, since I’m opening it up, we also get a local terminal office to do our local dispatching of loads and bringing in new customers.
When I got a good look at that, the percentage they take actually looks like a reasonable amount. It’s paying for the help of a whole corporate structure, training, safety, and a lot of other stuff I’m probably forgetting to include here.
In other words, it’s definitely nothing like my first so-called carrier who took a big chunk and provided zero support, zero benefits, and zero attempts at even trying to find me back-hauls, and their loads payed pitifully poor rates to boot.
And it’s not like the brokers I’ve used who take their cut off the top and leave what’s left over to the person actually performing the work. As good as some brokers are, they still don’t give a lot of anything for the money except the load they assign to you at the time, and the idea that they may call you again someday if they happen to think you might be available if they decide they have another one for you. And that’s not a lot of support to the independent guy, it’s a stop-gap in between other loads is about all…
One of the things I’ve learned in the past few years in this business is a huge lesson…
Trucking companies have mastered the art of having their day to day operating expenses covered out of pockets that are not attached to their own pants.
By this I mean, anytime you haul a load for any broker, any carrier, etc., you foot the bill to move the freight. I’m not so naive to believe that they haven’t figured out the same method for opening offices in various areas by getting folks like me to cover the utility bills and do the local footwork. Which makes sense if you’re a big outfit, you need offices in a vast variety of locations, and you don’t want to foot the bill for all of the above, but still want to get a local presence in any particular area.
Just having that bit of knowledge let me look at this whole terminal / leasing venture with a more practical viewpoint. The truth is they’re doing me a favor by letting me play in their sandbox, and I’m doing them a favor by footing the (very small considering I already have the office and am already paying for lights in the thing) bill for the local office… and with a lot of good communication and hard work on both ends, we could work this into something very good.
But that’s the office side.
On the truck side, I fully expect to have to transition into doing only close-in emergency-middle-of-the-night-weekend little truck hotshot loads and spending the majority of my time between the office and visiting various customers.
So while I’ll be leasing on the 2-ton for now, I’ll probably sell it off once we have enough trucks that it’s not needed, and get myself a regular 4×4 pickup to make my courtesy calls and do my midnight deliveries. This is getting a little farther down the road planning-wise, but that’s just how I think, (that Plan B thing again…)
Either way, from where I stand now I can see and appreciate the value of paying a carrier for all of the above when that carrier is well organized and staffed with hard-working people as this particular company is proving to be.
So I’ll just end with one last thought…. you do get what you pay for, if you pay the right outfit to get it.
It’s all in dealing with companies that are good at doing what they do as opposed to dealing with people pretending to be good at what they do. That’s a huge difference, and it means everything in this business.