The End of an Era

IMG_1979There may be a few who will disagree with me on this topic, but from what I’ve seen in the past couple of years, I think I can safely say that what we’re seeing is the tail-end of the independent hotshot era.

It was fun while it lasted, but dang, it’s pretty much over for most of us.

Not to be too discouraging, but the truth of the matter is that the big boys are in the mix up to their eyebrows, there are too many idle trucks, the rates are being driven down by too much competition, and it’s darned hard to justify the expenses involved in independent hotshotting if you don’t have a gob of good customers to keep you running a bare minimum of three decent loads per week.

And by decent, I mean $1000 plus loads.

That kind of load volume is tricky to obtain, nearly impossible to predict, and exceedingly difficult to maintain.

The other trouble there is the fact that loads never, ever end up distributed evenly throughout any given month, so the first and last weeks of a month may be busy, or the middle, or whenever the customer has their shipping rush, so inevitably the independent hotshot guy is going to have weeks where nothing is moving, which means no cash is flowing, and other weeks where he misses out on good loads because he can’t be in two places at one time.

That’s the catch to hotshot work. I’ve said a million times before, hotshotting is a feast or famine roller coaster, and I don’t say that just to be cute.

It’s a grueling, brutal, super-competitive field and the little guy, unless the stars just magically line up perfectly every week, is not going to win. At least not enough of the time to thrive. It’s a struggle that repeats itself over and over again, and getting ahead is pretty much unheard of these days. The normal for independent hotshotting in this modern age is fighting for every load and hoping to God that something else will break loose before you go broke waiting. And that’s if you have a few good customers to start with, otherwise you won’t even get out of the gate.

Now, if things were like they were in the “good old days” of hotshotting, one hotshot could manage to have all the work he could handle, simply because not everyone and their dog who had a pickup truck was out there competing for the work. But these days, it’s a real madhouse of competition.

The trouble with competition on steroids like this is that when you get two or three big outfits sucking up all of the customers, and giving the biggest and best customers cut rates to get their business, you’re not only killing off the little independent guys, you’re also taking bread off your own driver’s tables. But from the big outfit perspective, that’s the way to get enough customers to run their volume-driven business model.

Where the independent guy tries just to get enough volume to keep himself busy and fairly profitable like in the old days, the big outfits have to suck all the air out of the room just to make a small profit per truck. It’s the fact that they have thousands of trucks making weekly little profits for them that drives this business model. And the big guys know how to defray all of their daily costs onto their drivers, while also getting paid by each truck, which is their bread and butter. So they have to run more and more trucks, even if those trucks only bring in one load a week. If you have 3000 trucks handing you around $200 a week each, then you have something going on. They don’t care what the load is, what truck hauls it, what trucks are sitting idle, or what drivers get the “good loads” or the “bad loads”, as long as their trucks move a little and pay out the basic minimum every week they’re happy. And that’s how they work.

They bring in enough to cover their office folks salaries, pay their own light bills, and set aside a chunk for profit. To do all that takes a lot of cash, and that’s what the big outfits are all about.

In order to get that necessary volume, these big outfits set out years ago to starve out all of the little independents by slowly but surely luring their customers away. And it’s not that the big outfits are evil, they’re just doing what big outfits do best. They do what the independent guy can’t possibly do.

They provide a full stable of drivers on call 24-7, never turn down a load, take crap loads and good loads indiscriminately, and send the big oil outfits one easy to pay bill at the end of the month. From the perspective of the big oil players, this is a great way to get their stuff moved. One call to get a truck, one account to keep track of, and one check to cut come pay-time. So really you can’t blame either the big hotshot outfits or the big oil outfits for working hand in hand in this fashion, it’s efficient, it works, and everyone involved is happy.

Except the individual leased owner/op and the independent hotshot, that is.

Now, I’ve been there, done that on both sides of this coin, so I can tell you from personal experience that when your operating costs are a minimum (if your equipment is paid off, that is) of $600 per month in insurance alone – if you are old enough and have a good enough record to get commercial, cargo, and liability that cheap, – plus every other cost involved in moving the loads you do get including fuel, truck maintenance, tires, motels, food, and everything else you can think of that it takes to get something moved from point a to point b, and you have to have continual cash flow to meet those obligations, it’s tough to sit idle for a week or two out of every month waiting for loads to shake loose.

In fact, if you get stuck in a bad cycle for more than a couple of weeks it can and will set you back to square one. With no loads for that long, and waiting for your next loads to pay, you can easily sit for a month and a half with no money coming in. It doesn’t help much to know it’s on the books when it won’t hit the bank for a month. And somehow you still have to keep things moving in the meantime.

Which is where the big outfits get you. You can’t afford to starve as an independent, but you likely will since the big oil players are all using the convenient big hotshot outfits, and what happens is the independent guy finally hits the “no load” wall, gives up his (or her) authority, and signs on with one of the big outfits just to survive.

It’s how the whole thing works, and it’s important to know this up front. Unless you’re “Lucky Luke” or something and just happen to have an inside track to never ending, steady weekly loads, this is usually how independent hotshots end up being big hotshot worker drones once the dust settles.

So this brings me back to the beginning of this post and my rash statement, and I’ll stand by it since I’ve been through the cycle myself, this is the end of the independent hotshot era, and unless the big outfits miraculously decide to close up shop and go home, I don’t expect it to be revived.

Sorry to be the bearer of bad news, but dang, fighting it kicking and screaming doesn’t make it anything else than what it is, and that, folks, is pretty much what it is.

That’s all I’ve got.

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And Now, The Rest of the Story…

LoadedIf you’ve been following this blog, you already know I sort of left things hanging with one of my recent posts, and now it’s time to put pen to paper (or fingers to keyboard) and give you the rest of the story…

You remember, the post about getting the heck out of hotshotting. There was a lot going on at the time, so I sort of skimmed over the issue and just set the details aside until everything was finalized, which, now everything is finalized and I feel free to finish my little tale.

So, anyway, let me start back at the beginning and just tell the whole story, start to finish, in my typically blunt way. If anyone gets their feelers hurt, well, then so be it, but I promise you, dear reader, I won’t be the one to blow smoke up… well, you get it.

Back in my starry-eyed wanna be hotshot dreamer’s state of mind, oh, ’bout three years ago, I went out, traded off my old Ford on a 2-ton Dodge and hit the road running. And true, I ran a lot. Trouble was, at first, if you recall, I ran for a crooked outfit and made no money doing all that running, but spent a bundle moving their junk.

I smartened up pretty quickly, told them where they could place their so-called job, and got my own operating authority, and ran fairly happily for the next almost 2 1/2 years, until the rug got pulled out from under me when my tiny stable of good customers all stopped shipping anything at-all at the same moment in time, which just about did me in business-wise.

Which brings me to my last wah-hooie in my little hotshotting adventure, out of sheer desperation I held my nose and signed on with a big hotshot outfit, hoping that the stories they were telling me would be true.

And honestly, they mostly were. But just not in enough volume to do me much good.

The biggest hurdle I had to get our little terminal over to make things successful here was to get the company’s biggest customer (and our biggest local potential customer) to start calling our terminal with loads.

Well, let me just say the “Good ol’ boy system” is alive and well here, which I already knew, and no amount of wheedling, donut deliveries, leaving little goodies like hats, calendars, etc., even got close to getting my little foot in that firmly closed door. So I did what any frustrated terminal manager would do, I called corporate and begged them to get me a real salesman on the case to get this particular customer woke up and calling us.

And it never happened. Oh, they talked a good game, had a real salesman who already serviced the same customer call me, made promises, but in the end, they did not a single thing to shake loose local business from this particular oilfield powerhouse of a company that could have saved our sinking ship.

Not a thing.

In fact, my area manager pulled the real salesman off of the case, put his sidekick on it, and then just let us sink. That wasn’t quite the help I had asked for, or expected, I do have to say.

So, it was the utter lack of support on the sales end from our said corporate folks that finally broke this skinny camel’s back, and is why I finally pulled the plug and rinsed them on down the drain, which in my humble opinion, is a better place for them than on my back.

And that’s the unvarnished truth. My own “company” didn’t care enough about the terminal here to even lift a finger to try to help. They were happy enough just raking in lease fees and the profits my guys and I generated while we were barely scratching up enough moolah to keep the tanks fueled, then had the audacity to tell me I needed to put on more trucks when we couldn’t scrape up enough work for what we had.

Hence my bad attitude and unwillingness to keep swimming upstream when their boot was planted firmly on my head, keeping me stuck in the current. I may be stubborn, but I won’t intentionally drown myself to make someone else rich, and the fact that they expected me to told me a lot about the character of the characters I was dealing with, none of it very good…

Here’s the trouble with modern hotshot work… too many people make too much money off the backs of too many trucks that get signed on strictly for the leasing fees and insurance payments they generate.

These big outfits make a bundle of dough letting (no, really, making) their terminals knowingly sign on way more trucks than they have loads to put on them, and each of those trucks generates XX amount of revenue if each of those trucks gets roughly one load a week.

Get it?

And no hotshot who relies on rolling to make their living can stay in the business at one load per week, unless it’s one heck of a good load, and most of them honestly, are not so good loads.

Which brings us up to now, with me retired from the biz. The fact is, these days unless you have a golden goose laying reliable weekly load golden eggs, and you don’t have to pay another outfit for the use of their operating authority, you probably won’t make much of a living hotshotting.

And as far as I can tell, those golden geese and independent hotshots are disappearing fast, in fact, they’re pretty much gone. Probably for good.

It’s sad but true… And that folks, is the rest of the story.

Takin’ My Marbles and Goin’ Home…

Well folks, things have been decided, both by me, (and in an odd twist this past week) for me, due to certain circumstances I won’t go into here, (I may later but that’s another post) but what I will say right now is that I’m fine with it.

Being done, I mean.

I’m burned out, shelled, toasted, roasted, and utterly exhausted with trying to get ahead in this crazy hotshot business. And it’s time to stop throwing away good effort after bad. Not to mention the constant and overwhelming outflow of money involved…

I went over my books and considering what I have owed to me, what I have tucked away in my piggy bank, and what the equipment should bring once it’s liquidated, I think we did pretty well to come out a little bit ahead.

Aspiring hotshots, note that last run-on sentence, three years of working every available job, scrounging loads any which-way, and between living and operating expenses we have a little nest egg (and I mean pretty little considering) for all of this life-interrupting work I’ve done in the past three years.

So as a life experience, maybe it was worth it.

It was interesting, maddening, sometimes downright scary, and almost always challenging. It had it’s moments, and I did get to see a lot of the country I didn’t get around to visiting before I started hotshotting…

But… As a profitable venture, looking at the bottom line, it’s not really worth anywhere near the sweat, blood, and tears I have invested. Not to mention the money. Spent money, I mean. I’m not joking when I say this is an expensive business to be in, it’s a money-eating-machine.

Fact is, I could have saved up considerably more cash in three years of working a regular person type job, say, 20 hours a week at Wal-Mart, with regular days off, not having to be on-call for weekends, nights, and holidays, and getting a lot more rest and family time to boot.

So, starting this week, I’m edging my way out of the whole pitiful mess.

Oh heck with that edging out nonsense, I’m bailing out of this insane business as fast as I can.

I’ll still prowl around the old blog here to answer any questions that may come up, and will be happy to give you the straight dope on what hotshotting is all about, I just won’t be actively participating in hauling, arranging, managing, or any other-ing you can think of.

A friend of mine put it really well, saying she figured this business would “eat me alive.”

After three full years of dealing with the ups and downs and goofy curveballs it tends to throw, and trying everything literally under the sun to make it profitable and consistent, I have to agree, there’s just nothing left of me that I want to continue to invest in what has been like a never-ending ride on the crazy train.

So I’m jerking hard on the cord, stoppin’ the train, and getting the h-e-double-toothpicks off before it gets so far down the track that I can’t remember how to get back again.

Instead of continuing to deal with daily frustration, drivers who screw up, don’t show up on time, pull stupid stunts that get me hollered at, piss of my customers, whine when they don’t like the work they get and whine when they don’t get work, or just plain make me crazy, I’ll be happily doing, well, just what ever it is I happen to want to do, when I feel like doing it, no apologies, and definitely no regrets!

So there you have it, I’m vacating this little playground, takin’ my little bag of marbles and goin’ home. And it’s about time.

That’s all I’ve got…

Hotshot Wannabe? Maybe You Should Think This One Through…

Hello Folks,  I’ve been working my poor self half to death chasing loads for my guys, and not keeping up with my blogging as I should, for that I apologize.  Turns out chasing loads is a full-time (I mean every waking moment) job that never ends… but that’s not exactly the point of this post.

Now I’m going to vent some and share a little dose of reality, and offer up another cold hard truth about hotshot trucking… and for that I don’t plan to apologize.  But you may thank me later if this little bit of preventive warning keeps you out of hot water… or from getting into a less heated liquid substance, but still way in over your head.

Let me start with one fact about hotshotting that everyone ignores, and unfortunately so, since it matters to each and every hotshot’s bottom line.  I know it drives me and my guys crazy, we deal with it as a fact of hotshotting life every day.  That fact is this; there are too many trucks out there these days, and not enough loads to keep them all running.  Which means that we sit as much as we run, and that’s not exactly the optimal situation for anyone trying to eke out a living in this business.

There, I said it, out loud, in front of God & everyone.  And it’s true.  And it makes life as a hotshot, whether you’re leased or independent, much harder than it otherwise needs to be, since the competition is intense even during good times.  And now is not a good time for trucking, for a lot of reasons.

So let’s look at the issues that are making life so hard for the average hotshot trucker.

One is the simple fact that trucking companies make money off of trucks that are leased to them.  The companies don’t care if the trucks leased haul one load a week or five loads a week.  Loads on truck equals cash flow, and that’s all that most trucking outfits are after. 

The problem is that some companies don’t know when to slow down on leasing new trucks.  They figure the more the merrier, but the result is obvious, when they get more and more trucks, and not more and more loads at the same rate, someone is getting left out on the load end of the business. 

And it’s usually everyone leased on who is affected, not so much the company itself.  When there’s less work to go around nobody gets fat, everyone is hungry, and the competition is even more fierce than usual.  The only saving grace is that the less persistent and more impatient new hotshots usually give up after a few weeks and go back to their day jobs, which restores the balance somewhat between trucks and loads.  At least until the new batch rolls out and leases on thinking they’ll get rich overnight hotshotting…

Another problem is that our economy has been beaten to a bloody pulp by government interference, over-regulation, and a lousy excuse for an economic policy over the past decade or so.  Which means that there’s less work to begin with than the old-timers were used to seeing.  It didn’t help that we had the oil spill in the gulf, or that the EPA is running rampant, all of these things hurt our industry and it takes a long time to recover.

Which brings me to the expense of hauling those loads…as you may or may not know, the hotshot pays the expense to move the load then gets paid a set amount for that load.  Whatever is left over then pays off other operating expenses, taxes, and wages to the truck owner/driver, and whatever is left out of that is, in theory anyway, profit. 

Well, equipment is expensive to obtain in the first place, repairs are high, and fuel is so dear these days that it’s difficult to make a profit, particularly when there are too many trucks in the pool and not enough loads to put on all of them at any given time. 

The guy who misses a load today also misses out on making operating money for tomorrow, or repair money that he has to spend to stay legal to haul, and so it goes.  It snowballs, and with expenses so high, by the end of a week, if a guy has only one or two loads, he’ll end up taking home, oh, say, about the equivalent of 10 hours work at McDonald’s, give or take a little after all of his expenses are paid.  And between hunting loads and hauling loads, and doing the paperwork involved in all of the above, he may have (and normally will have) put in a lot more than a 40 hour work week. 

Oh, and McDonald’s won’t call you out at 2 am …

I guess what I’m saying here is this… If you are thinking of hotshotting, you might want to stop and evaluate the big picture. 

Now is not a good time to for inexperienced newbies to jump in, most who have lately have jumped right back out again after being “burned.”  I hear a lot of sob stories about guys who just dropped $50K on a truck and another $12K on a trailer, only to find out that the meager loads they can manage to scrape together won’t make the truck payment, let alone buy fuel and pay all of the other expenses.  And they cry that they were treated unfairly, cut out of the “good loads” and generally abused.  The fact is that everyone is in the same boat, when there is an over-abundance of trucks and an under-abundance of loads, nobody is happy, newbie or veteran.  The veterans just know how to hunker down and hold on until things improve.

I think I can safely say I’m a good source for this information, considering the fact that my life now revolves around my computer screen doing the scraping together of loads for my guys, and let me tell you, it’s not easy, it’s not making anyone rich, overnight or otherwise, and even the old timers are having one heck of a time keeping their heads above water and paying the light bills these days. 

That’s all I’ve got today, maybe things will look better tomorrow. 

 

 

 

 

Shiftin’ Gears… & Understanding Trucking Leases

This week I worked at shiftin’ gears. Not the kind that you find inside of a truck, but the metaphorical kind. I’ve apparently gone from Owner Operator Independent Hotshot Trucker to Office Girl in one slippery little slide.

Ok, not just Office Girl, but Terminal Manager. And let me tell you, I’m learning new and fun stuff on an hourly basis in my new role… But just the fact that I am able to learn at my age is pretty OK with me! Old dogs can sometimes learn new tricks, apparently. At least this one has been doing just that all week long. Scratch that, for the past couple of months is more like it.

Which leads me to the point of today’s post… When an independent such as myself has enough of the feast or famine roller coaster and finally decides that it’s time to join the big boys instead of banging their own head on a solid wall and getting nowhere, there are some things they need to know about trucking leases.

This was a taboo, painfully touchy subject for me in the past due to my unfortunate first lease with a little local outfit that I have since discovered was very well known as being shady. OK, they were outright crooks. But nobody bothered to warn me at the time of their reputation. And honestly even if they had, I was so desperate to get going I would probably have put on my “dummy blinders” and had to suffer through it anyway.

Learning the hard way has always been my standard MO… so I can’t blame anyone but me for being a real good sap. (Now I do know better and maybe you can benefit from my newly hatched knowledge…)

Being just fresh out of trucking school and ready and willing to run, I still had the problem of not knowing what the heck a lease was, what it should or shouldn’t do for either party involved, or what to even look for in a company to lease to. I was, like a lot of newbies, just eager to get going and make some cash.

Which is exactly what will bite you in the backside on a lease. You need to know what the lease says, exactly, what your obligations are, and what you get for your money. Keep in mind that when you lease your equipment, you are agreeing to pay XX % of every load you haul for the privilege of running under a particular carrier’s authority and insurance. You need to know exactly what you are paying and getting in return.

In other words you need a good lease. Not a crappy, get-nothing but trouble for your money lease.

And I can assure you from painful first-hand experience, paying a little bitty local carrier 25% of some doctored number on a load they already skimmed the cream from and you are too dumb or inexperienced to know it; to throw some overweight crap load on your trailer, then send you out with no support system in place, and then leave you to your own devices to find a “backhaul” home on your own just to make fuel money, while raking in $300-$500 per month off the top of your settlement pay for “insurance” that they never forward to their insurance carrier (leaving you completely exposed, by the way) is not a good lease. But it is typical of the lousy leases newbies end up with their first go-round with some tiny mom & pop carriers (and some bigger ones as well) who prey on the ignorant… it’s far, far worse than paying a legitimate, ethical carrier 30% when they’re on the up and up.

And yes, that was a run on sentence….

And just a side note on those “backhauls” because this is a part of the equation that causes some confusion (and hard feelings) if folks don’t understand it… and the word gets tossed around all the time.

In my book, a backhaul is a load that they put on your truck in the same place they just unloaded you, and the rate on that type of arrangement can be, and usually is, 50% of the outbound rate for the return trip. Backhauls are normally built in to the original load and agreed to ahead of time and are done as a courtesy discount to a good customer with freight going both ways.

A reload is a new load from a new place (or maybe the same place,) but one that was not figured into the original plan, and any reload should pay normal rates, not a “backhaul” discounted rate.

Okay, now that I got that off my chest, on to leasing…

The first thing you need to know about leasing is what a lease actually is. Sounds simple enough, but until you know, you don’t know.

A lease is typically an agreement that gives control over your truck and trailer (or whatever your equipment is) to the company you lease it to. They dictate how and when you use that equipment, and the lease you sign dictates who pays for what, and how much each party pays. It also details the cost and amount of insurance coverage is required, and spells out your specific obligations and theirs.

Now, our leases are very strict, but we also have the ability at each terminal to give our leased owners the option to accept or turn down any particular load. At my terminal, we do not force dispatch. Some companies and some terminals do. That’s another thing you need to know when you consider leasing your equipment.

I’ll start with the things you need to be prepared to accept that nobody likes, but everyone must understand and be prepared to live up to when leasing…

With most companies, once you sign on the dotted line, you are not free to use your own truck for personal use, and are never allowed to use it to haul an unauthorized load.

Leasing your truck gives the carrier you lease to the right to dictate where you take that truck and where you don’t. If you follow the lease to the letter (and you should be prepared to!) you will be parking that truck when it’s not out making you and the lease company money. Aside from fueling, washing, and other maintenance, the truck should be treated like it belongs to the company. I know, that’s a hard pill to swallow when you’re used to being your own boss, but that’s how leases work.

You are also restricted (it should go without saying, but some folks don’t know this) from hauling anything on that equipment that the company you are leased to doesn’t tell you to, or give you express permission to haul.

In other words, if you pick up a little “side load” and haul it without telling your company to avoid giving them their leased share of said load, you are in violation of the law because you just broke your lease agreement which gives you the ability to haul under the operating authority of the company you leased to.

Not a good idea, and generally an automatic lease breaker. Also not good for your reputation, as it’s considered bootlegging… and should you have even a fender-bender while bootlegging, your insurance will also toss you out on your own. And should that fender-bender require a police response, you may very well find yourself getting a complimentary ride in the back seat of a police cruiser to the local gray bar motel for a little enforced “vacay.” It’s a bad idea all the way around…

You may also be restricted in who or what you can put into that leased equipment.

In our leases, for example, unless you are leased as a passenger transporter, passengers and pets are not allowed. Our trucks deliver to sites that are unsafe for visitors and pets, nobody wants to see your pet pooch get run over by a piece of heavy equipment when you let him out to do his business on a drilling site, and your wife doesn’t need to be kicking around out there either in flip-flops and shorts when the BOP on the rig fails and everybody on site gets hit with a big rain of the goo they put down those holes… if you get my drift… so it’s a safety and liability issue. Not just the company being mean…

The other big no-no in a leased truck (or any commercial motor vehicle, by the way) is having alcohol in the truck. That’s not just a motor carrier rule, it’s the law. Alcohol is never allowed in any CMV with the one exception of the trucks that are hauling it commercially.

When you’re leased, the carrier is going to require you to turn in original fuel tickets. Some folks bristle at this one, but here’s the solution. If you are intent on hanging on to your own original fuel tickets, simply get two tickets every time you fuel. Personally, I make photocopies of my weekly fuel tickets anyway for my own tax files, as the originals tend to fade out over time and become useless anyway. Yes, I keep my originals, but if I get audited three years down the road nobody will be able to read what has already disappeared from the printed ticket, but my photocopies will still be going strong.

Now for your obligations under most leases…

The owner of the leased equipment is normally responsible for the upkeep and fueling, washing, etc. of the equipment. You are also responsible for having proper securement equipment on the truck in good working order. You have to have all of the required safety equipment and PPE (Personal Protective Equipment) on the truck, and be prepared to use it as required when picking up or delivering. And nowdays with cell phones being an integral part of doing business, you need one with hands-free functionality in order to be both accessible for loads, updates, and various required communications, and to be legal using it.

Remember, this is trucking, and trucking outfits learned a long time ago how to defray their daily operating costs onto the truck owners. When you lease, you better have enough cash on hand to fuel and run your truck, or you’ll find yourself using the company fuel card which has a $4 per useage fee that comes out of your pocket.

You will be required to carry insurance on your equipment, typically that would be non-truck liability and physical damage insurance. Some big companies offer these as part of the lease deal, with your premiums deducted from the truck settlement pay. Insurance is confusing to the newbie, so here’s the scoop. You pay per the terms of your lease XX amount to the company that covers you when your truck is under a load. When your truck is not loaded, the non-truck liability kicks in.

It’s pretty simple but sounds complicated. In a nutshell, the insurance you are paying for while under a load is the carrier’s liability and cargo coverage. The non-truck and physical damage cover your property.

You are also obliged to pick up and deliver the goods at the time arranged and agreed to. Being late is not an option.

While under lease you must keep your equipment in tip-top shape. If you break down and someone has to send out another truck to finish your haul, you only get paid for the miles you actually hauled it. The balance goes to the truck that completed it. And that’s only fair… but keep in mind that you also have to be ready to fork over the bucks to have your truck towed and repaired.

Tires, brakes, lights, you name it, anything that can or does break out on the road or back in the yard, all of that is the responsibility of the owner to fix in a timely manner. Most leases provide for a weekly fee just for being leased that is paid to the carrier. Down time is expensive so that fee is put there to encourage swift repairs. A truck that is sitting is not making anyone money, and carriers who run leased equipment don’t have much patience for owners who don’t make repairs ASAP. They count on having XX number of trucks running, and when trucks break down it messes with the program.

And last, but not least, if you are a non-driving owner, you need to find a good, reliable, honest driver who will adhere to the lease terms while out there running in your leased equipment. You need someone who treats the equipment well, and who understands how not to make a problem worse. What you don’t want is some yahoo who thinks the solution to a flat tire is driving on it to the repair shop and ends up ruining your wheel too… if you get my drift… or worse yet, someone who doesn’t recognize the beginning of a problem and who doesn’t do anything to prevent it from getting worse.

And finally, what the carrier who leases your equipment should do for you… (Read your lease!)

The carrier you lease to should do the following things to earn that XX% of every load you haul for them. First and foremost, they should put loads on your truck.

That’s pretty basic, but if they’re not working hard to load you, both outbound and coming home, they’re not going to keep you very long.

Now, there will be times when a load home just isn’t to be found. Fridays are notoriously bad days to get loads heading to wherever it is you want to go, as most truckers already know. And there are certain areas you will haul into where there is next to nothing coming back out. Some days you just have to bite the bullet and deadhead home, or deadhead to another spot where there is a load available.

The point here is, no, you won’t be loaded and reloaded every trip, but if the leasing carrier isn’t doing absolutely everything in their power to find you a load, and keeping you informed as to what they’re doing, then they’re not giving it their 100% in trying, and they’re probably not worth leasing to.

They should also have support systems in place to help you do your job. This includes having people who will do the heavy lifting when you need to hire a driver, do the required paperwork involved in hiring, all of the HR support. There should be a safety man available to get you any special training and/or equipment you need to do your job properly, and they should also provide you with folks who can help with fuel card issues, getting help out to you if you do break down, and folks to call in the middle of the night if you can’t find a motel or any other on-the-road issue you may have.

These people can be located in your local terminal or spread out in service centers all over the place, but the point is that if you’re out there hauling their loads, they need to give you the support system to keep you moving and keep you safe while doing it. You should be able to pick up the phone at 2 AM just like you can at 2 PM and get a friendly voice on the phone to sort out any issue that comes up. If you don’t get that, you probably leased to the wrong company.

As a nice bonus, some companies (mine included) work on a 2-check system. They cut one check to the driver and a separate check to the truck at the end of the pay period. This is great if you, like me, have been “sticker-shocked” by taxes after running independent all year. It’s also nice to be covered under Worker’s Comp while driving, and to have some benefits such as a 401K and ESOP, which not all big outfits provide. I don’t know about you, but I would rather pay my income taxes in a little at a time and not all in one big gob. It hurts a lot less this way…

And the bottom line is always the bottom line. If the company you are leased to doesn’t pay you promptly and consistently and correctly, then you’re definitely leased to the wrong outfit.

The trouble with leasing to little local carrier is often the lack of any of the above support, and worse yet, settlement checks that are weeks or months late, that bounce, or that are just plain wrong.

At least with the bigger outfits, you know for sure you will get your settlement checks weekly, without any pain, often direct deposited into your bank account, and 99.9% correctly. Since humans prepare payrolls, there can always be an error, but a good outfit will correct any problems ASAP and not make you sit around waiting for a resolution, or worse yet, make excuses and not fix the trouble.

The last thing you need to know is that a company that is operating on the level will not hide anything from you. You should see the rates they charge the customer, you should have that information on your paperwork when you take the load, and you should never have to ask them why your settlement check doesn’t add up…

So before you go signing on the dotted line with some little local outfit, ask yourself (and them!) what support they offer you, what they’re actually charging that XX% for in services to you, and how they do their settlements. They should also be able to show you the actual load prices they charge that they use to calculate that XX%, and if you think, or even get the tiniest feeling they’re hiding anything related to what those loads actually pay, run, don’t walk, run away.

Now, there is one more topic that I need to cover regarding leasing, then you’ll be out there ready to do your own detective work to find the company that’s right for you to lease on with…

The biggest complaint by far with newbies leased to carriers is the fact that they don’t understand why their first settlement checks are small or negative numbers.

This is all in the fine print of any lease, you need to hunt it down and study it, ask questions if you don’t understand it, and be prepared for how you will be paying the costs involved in start-up. As with any start-up in any business, everything needed to get going costs money. When you lease to a reputable carrier, they will explain these costs in excruciating detail.

Let’s say you lease on the first of June. It takes a month before you actually start getting loads, and it takes three months before you are consistently running. (Yes, that is typical… due to paperwork, load availability, and truck availability…)

Your first several weeks of settlement checks may be less than stellar, and maybe even downright disappointing. You need to know that all of the stuff you get to start with is going to cost you, and it all comes out of your settlement. Up to 10 weeks of settlements, actually, then you should be even and start having less taken out.

These costs can include escrow, (an amount of cash that can be between $500 and $1000 set aside to cover costs in the event you quit while owing the company money,) apportioned tags, truck signs, insurance premiums, your background check and medical card exam fees, pre-hire drug test fees, equipment you purchase from the carrier, lease fees, Worker’s Comp and accounting fee for your driver check, fuel card purchases and card fees, and the list goes on.

If you want to help yourself out during this time, and can do so (and you probably shouldn’t be leasing until you can afford to do this) don’t use their fuel card, and don’t spend anything you aren’t contractually obliged to spend! Everything optional costs you less if you bypass the carrier to pay it. And everything you pay out of your pocket reduces what is taken out of your settlement check.

So keep the “charged items” so to speak, to the bare allowable minimum and pay your own way where they allow it.

To keep your blood pressure down during the first ten or so weeks, you need to keep a tally of what you are paying for and how that is divvied up so you don’t get any nasty surprises! If you know you’ll be paying $75 per week for escrow, $45 per week for bobtail insurance, and $6 per week for a lease fee, it shouldn’t be any surprise when they actually deduct these from your check.

My first two weeks of settlements were in the -$$ range simply because I didn’t get loads on the truck, and my bobtail insurance and lease fees are taken out whether the truck moves or not. No, it’s not a pretty sight, but I wasn’t ticked off because I knew in advance that would be the case.

It’s all in what you know, how well you understand what you’re getting into, and being ready for what is going to happen to those first few settlement checks.

Nobody is “ripping you off” if you fail to educate yourself on how the game is played, and you didn’t plan on the deductions that will come out of your first checks. And using a fuel card adds to that total, often leaving fellows who lease but don’t understand the process feeling pretty blue come payday when they figure out they already spent their pay. You can control a lot of the deductions by simply being aware of what not to “charge on credit” and by planning for the first few weeks to be small checks by sitting down with a pencil and doing the math.

Now, on the other hand, if they don’t tell you all of the above up front, then you may have a reason to be upset. But if you read and understand your lease none of this should surprise you in the least.

Now go mull this over, and if I failed to cover anything you need to know, holler at me and I’ll do a recap later on.

We’re Gettin’ the Hang of It…

It’s always fun learning new stuff (OK, maybe fun isn’t the word) but my friend and dispatcher/office manager/girl Friday B and I are starting to finally get the hang of it…

Running a trucking terminal, that is.

It helped immensely that yesterday the corporate safety man came up to our little terminal and walked us through a lot of things that the other corporate guys who have been up forgot or omitted from their on-site lesson plans. And now we have a lot better understanding of how things like paperwork should be done so we can get properly paid for all this work.

Not that we’re drawing any checks any time soon, since our terminal runs on commissions. And until we start moving trucks on a regular schedule those commissions are going to be little dribs & drabs, so we try to have at least one good laugh every day about how we’re working for nothing right now. (If we don’t have a good laugh we might both burst into tears… naw, neither of us is the boo-hooing type…)

I’m finally getting fairly comfortable explaining the equipment lease program to our potential owner/operators. There are so many details to it that I have to get it right. When someone comes out to hear about it I feel a big responsibility to explain it clearly, to be able to answer any questions they may have, and to be able to stop and start again without getting lost. I’m getting there.

On the practical operations side of things, we figured out the computer program for booking loads, and after piddling around on the practice side of it for a while, we were able to book our first load without a hitch.

It’s starting to feel natural answering the phones with our new business name instead of the old ones, and we’re getting along great working together. (We decided Capricorns and Scorpios are compatible workmates and neither one of us has developed any annoying habits that drive the other one crazy yet… at least B hasn’t, and unless she’s just refraining from hollering, “Stop that!” at me, apparently I haven’t either…)

So we’re having fun, well, as much as you can have working 8-12 hours a day unpaid anyway, and starting to feel like we’re at our normal jobs instead of in uncharted territory, and we’re already trying to figure out how to politely but firmly convince BB that he needs to move his office (which is just one wall of the one we all share) into our residence so we can quit tripping over each other trying to get to the coffee in the mornings….

In other words, what was pretty scary and new is already getting to be the “normal” for us. And that’s just fine with me, I’m not so sad to think I’ll soon be too busy here to do much driving anymore. Which, I suppose means that things are working out and the future looks pretty good from where we’re at now.

Gotta love that…

Growin’ Pains…

I remember having growin’ pains as a kid.

Since I got my height all at the same time one summer between my 12th and 13th years, I had plenty of the above, and not just in a social/emotional sense, but in a very real physical way. Sometimes it just hurts to grow, and the faster you grow, the more it hurts.

It’s kinda like that in business too, I’m learning, or maybe being reminded since I actually did know that before now. The past couple of months have blazed by so fast it’s just about made my head spin, and there’s been some real pain involved in just trying to keep up with the changes that just keep on coming.

But then again, maybe that’s a good sign of better things to come. I’m taking it that way, anyway…

The past week has been a pretty good example of all the odd stuff that happens when you’re expanding a business. We had three trucks sitting and waiting for their first loads. To be specific, it was a 3/4 ton hotshot pickup, a 1-ton truck and 40′ trailer, and my truck, the 2-ton.

Well, my friend/dispatcher “B” and I racked our brains and scoured the loads in our network trying to get at the very least the hotshot and the 1-ton loaded. I wasn’t as worried about putting a load on my truck, (not that I don’t want to run, I just want my guys to run first!) so we were really looking for something to get our guys rolling with.

An ice-breaker load for each of them, you might say…

Well, B found one for the 3/4 ton. Oh happy day!

So we went into a flurry of activity and ended up booking the load. Only trouble was, to our dismay, when we called with the happy news, our 3/4 ton driver was stuck sitting in the middle of a dental appointment and couldn’t just hop up and take it, so we tried with the 1-ton driver… Then we noticed there might be a problem with the timing of the load.

Not good!

With that issue, the 1-ton driver didn’t want the load, and that left me with 2 options, turn the load back or figure out how to take it and resolve the problem with the darned thing.

At any rate, I didn’t want to risk getting a bad rep right out of the box by turning it back, so needless to say, (or maybe not since you don’t know what I know) I ended up resolving the problem and taking the load myself. And I guess I pretty much took one for the team by getting a great for a 3/4 ton but not-so-great load for a 2-ton load delivered anyway…

To make things more frustrating, the load was going into a very heavy volume lane for hotshot loads and everyone said “Oh, you can get a load coming back out of there, no problem!” Someone even said how smart I was to take that load due to the great reloads available down there…

Ha!

Maybe not so much, as the only load coming out of there yesterday while I was on my way back was about 4 hours too late for me to even think about as I was already halfway home when B. found it. And that was after I hung around and dragged my feet, made a Starbucks stop, and generally killed time (and ate up some of my 14 hour clock) down yonder hoping something would become available before I had to leave so I could still make it home without going over time on my log.

What’s a girl to do? Or rather two girls in this case… Well, we had a good laugh over it, it was either that or just have a good cry, and apparently neither of us is the crying type.

To top off the bad part of the week, one of the trucks we were trying to get signed ended up not getting signed due to unforeseen problems, so we won’t be getting that extra set of wheels this week. And probably not for quite a while yet, and that’s only if he wants to try again later on. That was disappointing for me and the truck owner both.

On the good side, while down there in hotshot land I did get to meet up briefly with one of the hotshot owner/ops I’ve been learning a lot of good information from via the internet, and he was just as nice as could be. He took a half an hour out of his busy day just to take a break at a truckstop near where I was sitting and waiting to see if I could get a return load booked and we had a good visit. I learned a lot more about how things work in his part of the universe, which = valuable info I can pass along to my guys so they’ll know more about what to expect when they run down that-a-way.

At any rate, it was a busy week even though we didn’t get much accomplished that actually put coinage in our pockets. What we did accomplish was making more contacts, learning the new system, and fine-tuning the office so it works for both of us pretty efficiently now. And we have a big truck halfway signed, which will do wonders for our bottom line once he’s up and rolling.

So it was an up and down type of week overall, but I guess if we’re moving forward in even little steps we’re still at least heading in the right direction.

That’s all I’ve got today…

Thank God It’s Friday!

As fast as this week flew by, and with all we got accomplished, I’m ready to sleep in a little in the morning and just have a bit of a weekend already.

Shifting gears as in going from independent hotshot carrier to a terminal manager for an established company brings a lot of busy work with it that I simply didn’t have before. So while there was a lot going on, it was also kinda nice to stay steadily busy. In the old days (a month ago..) I would have been sitting here stewing over not having loads and trying to figure out how to make them materialize out of thin air.

No such worries now, instead I’m more worried we won’t have enough trucks to keep up with the volume of work I expect will start up on Monday and continue until, well, whenever.

And yes, I know I’m being optimistic, but I believe in what I’m doing, so that makes it easier for me to stay on the positive side of things instead of being the grumpy butt I was turning into before this opportunity came along.

So much for the philosophical side of the week, which I barely had time to think about until after the clock ran out tonight, because the practical application of all the new information and skills I’m learning kept me hopping right along.

And I actually got things done that needed done, pretty much when they needed done, and managed to do them (mostly) correctly. And that’s OK with me since I already know I’m in the learning curve stage of this new venture. Close may not count in horseshoes and hand grenades, but when you’re learning a new job, close sure does count!

The things I didn’t get right the first time didn’t slow me down too much, the folks walking me through this just pointed out where I went astray and gave me another try, with no drama involved, so it was a good (and as stress-less as it could be) experience. And I’m starting to get the hang of how this process goes.

I’ll take that as a good week and consider it time well spent, and I think I’ll even call it decent progress.

So what was I doing all week, you might well be wondering, so I’ll tell you…

I spent the week wading through piles of paperwork that’s involved in getting owner/ops set up, approved, and ready to roll, did a couple of interviews of potential said owner/ops, making visits to potential customers and handing out goodies & business cards to start the train rolling, and last, but not least, poking around in the computer software we’ll be using for load booking & tracking.

And after all of that I at least feel like I can take a load order, get it correctly into the system, get one of my guys on it, and keep the paperwork straight so everybody gets paid.

I guess an old dog can learn a few new tricks after all, I seem to be catching on… Stay tuned, I’ll let you know how it progresses once we are moving loads, hopefully this next week…

Cha.Cha.Cha…Changes

It’s time to start the newest chapter in this business, which is a little scary but really not so much. Or maybe I should say, if I had any sense at all I might be scared, but anyway, it’s just new… and new can be a little daunting.

Or maybe it’s just all the hard work I’m seeing ahead that has me spooked, after all, I’m a naturally lazy person who has to fight that nature and keep pushing myself to do what I need to get done. Sort of a self-forced self-starter. Honestly I’d probably be content to sit around all day with my feet up eating bon-bons, if I could figure out exactly what they are and where to get them….

Naw!

The trouble with that is getting old and fat before my time, both of which I absolutely refuse to do. So push, push, push, work, work, work, it is. My theory is that if it doesn’t keep me slim and young, at least I’ll be too tired to care.

Anyway I’m dancing all around the main subject, which is the fact that I’m officially an Acme Truck Lines, Inc. leased owner/operator now, and on top of that I’m also the terminal manager at the brand spankin’ new Duncan Terminal.

2013-07-05 15.54.39

That seems like a lot on my plate, and like most other ventures I’ve stumbled into, I don’t have a clue where this will take me, but I’m always up for a new adventure.

Now, I’ve been working on this deal for about a month and a half or so and it’s taking a while to get everything put together, but aside from the mountains of paperwork involved, the hardest part of the project is getting other owner/operators to lease their equipment.

And understandably so. I’m sure there are a lot of folks out there who have the trucks & trailers and are managing to scrape by running independent, and a handful that are really staying steadily busy and raking in the business, and that sort of independence is hard to give up.

But then again, I’m also pretty sure there are a lot of people out there who want better access to the well-paying oilfield loads, and like me, would get on board if they knew the opportunity was there.

So I guess this is not only a post, but another way for me to get the word out there, if you’re in the Duncan, OK area and have a truck & trailer, or tractor-trailer setup you want to put to work, shoot me an email!

( smbtransportllc@aol.com )

Alright, no more advertising, it’s about time I get back to work and stop goofing off…. see what I mean?

Did I Really Just Say That? Yep…

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?

Yep…

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.