Question about Landstar

[carolina trucker]

First off, let's say I've decided I want to lease on to Landstar.

I've read some of the discussion threads about Landstar and one of the observations I've noticed is that if you try to survive based on the loads you can pick up from Landstar's load boards, you're going to starve.

On the other hand, if you establish a good relationship with an agent, you can get good paying loads and do pretty well.

So, one of the questions I have is this: How do you go about finding a good agent?

Do you just pick up your cell phone on day one with Landstar and call one agent after another in their agent list, tell them who you are and ask them to give you a call if they have some freight in the lanes where you want to run? Is there anything that says you can't call more than one agent? Can you call one agent a day forever until you finally get a good relationship with an agent (or agents) who will find the kinds of loads that will work out well for both of you?

Also, if I don't own my own truck right now, but am willing to buy one, how much working capital will I need beyond whatever I have to have for the truck itself? For instance, I have about $60k or so available to me now, so do I go out and buy a cheap truck for $20k, keep $10k in reserve for now and leave the other $30k for emergencies or is there some better way of doing this?

Thanks for all the great ideas, guys.

-- c t

[Twilight Flyer]

You've got at least 6 agents newly signed onto the messageboard. Shouldn't have any problems getting your questions answered, at least from their side of the coin.

[mike3fan]

sounds like a good plan,I was leased onto Ligon before we switched to Inway,I just called the home office and asked who was a good agent to get me work out of were I lived they put me in touch with a very good agent.

There is nothing that says you can't call every agent in a day if you want,just don't expect them to just start handing over their best loads to you without a few trial runs to make sure you are dependable and don't expect a lot of small talk most are real busy during the day,also not every agent can get you loads every place you go,you may have to deal with a few different ones.

[GMAN]

Carolina Trucker, I am curious as to why you decided on Landstar? Do you plan on pulling a van, flat or other type of trailer? Landstar will tell you that it takes about 5-6 months to learn their system. Having leased to them, I can attest to that fact from my own experience and that of others. It takes a while to build relationships. They will see how you run and if you pick up and deliver in a timely manner. You will probably not be offered the best paying loads until they see what you can do. When I was leased to them, we were all assigned a domicile agent. It was the job of the domicile agent to help you learn the system and help you get loaded. At the time, the domicile agent got a small percentage of your loads. I believe that has since changed with their new agent contracts. I didn't realize that I had a domicile agent until shortly before I left them. Some agents are better than others. We had pagers when I was there. Most have cell phones now. Landstar has a load board for their BCO's (their name for owner operators) Business Capacity Owners. How is that for a fancy title? Most of the loads will have the rates posted and can be accessed by any BCO. They also have a public load board, but it doesn't list the rates.

Some people hit the ground running with Landstar. Others take a while to learn their way around their system. Some won't make it at all. Those are the facts. It will be up to you to seek out those agents who have the best paying freight and run good traffic lanes. It can be difficult to run and be profitable in the Landstar system if you have never been an owner operator. The main reason is that you need to be highly motivated and know something about how to successfully run a truck. That doesn't mean that you cannot make it without experience, but you will have to work harder to make it and learn. I am not trying to discourage you from going with Landstar, but you need to know both sides of how things work with them.

If you can get hooked up with a good agent, they can often help you find a load on the other end of where you deliver their load, especially if you can get an agent who has a lot of dedicated freight. Rates tend to be all over the board for their agents. If you are in North Carolina, you will probably go to Atlanta for orientation. If you pull a van, they will need to help you find a trailer. They will probably have a couple of their larger agents in the Atlanta area come in and may help you get started. When I was there they had an individual called a "care" person who worked with new owner operators and drivers for the first 60 or 90 days. They help orient you to their system and help in finding some agent contacts. It may take a while to find an agent who runs the lanes you want to run that has good agents. Landstar doesn't have dispatchers, although some agents sort of act like dispatchers. If you want to take time off or sit at home, you won't have someone calling daily to see when you are going to take a load. You will succeed or fail based upon your own efforts.

Landstar has some specialty areas that pay very well. It usually takes some time to work into these type of positions. Their van division does a lot of drop and hook, but you can make more money if you decide to buy your own trailer. You don't have to buy a trailer in the van division. If you pull any other type of trailer you will need to either buy or rent a trailer. They will rent you a trailer if one is available. You make about 7-8% more pulling your own trailer than with power only.

You can also find agents who have certain types of freight by talking to other BCO's. Some will tell you some who have good paying loads.

You don't mention whether you will need to borrow or have the cash in the bank to start your trucking business. I prefer spending what is necessary to do the job and be profitable. You don't need to spend $60,000 on a truck to be profitable. As you mentioned, you can spend $20,000 to buy a truck and have plenty left over for emergencies. If you save your money you can always trade up later. Landstar will only be interested in whether your truck will pass a DOT inspection and if it looks half way decent. Good luck.

[mike3fan]

Also let me add that just because an agent isn't in your area doesn't mean he doesn't have freight in your area,many agents have customers all over the nation.

My agent was in Rochester,NY and had freight from Texas to Florida to Michigan and every place in between.

[carolina trucker]

Carolina Trucker, I am curious as to why you decided on Landstar? Do you plan on pulling a van, flat or other type of trailer?

GMAN, first off, thanks for the reply.

As others have pointed out on this board, and among all the people who submit information to this board, you consistently provide some of the best information about this business and I want you to know that I, for one, appreciate it.

Insofar as to why I've decided to lease on to Landstar, all I can say is that if you know of something better, I'm open to listening.

I've been reading this board for months now and the upshot of most of what I see on here seems like pretty common sense advice. It runs along the lines of:

(1) you have to pay your dues, which I can believe easily enough.

(2) you have to be self disciplined to make it as an O/O and many people simply aren't cut out that way. As a result, they're probably better suited just by temperment or disposition or work ethic to be a trucker/employee rather than an O/O. This makes sense, too.

(3) you have to have reasonably good business acumen to make it as an O/O, meaning that among other things you have to understand your cost structure, know what it costs you to pull a load of freight, and then decide on a reasonable rate of return for the service you provide and not deviate from that. Simply put, many truckers don't have the discipline to do this either.

I don't see anything, in particular, that I'd disagree with along these lines of thinking. BTW, I'm divorced, have no kids and there's no reason why I have to be home, really. So I'm prepared to work my tail off and am willing to spend 50 or so weeks per year on the road, working whatever the number of hours are I need to work to do well financially.

For what it's worth, I probably would want to buy my own trailer, though if I can make more money pulling reefer loads or a flatbed trailer, I'm open to doing so.

I am curious, however, as to your comment that "Landstar has some specialty areas that pay very well. It usually takes some time to work into these type of positions."

Are you saying it takes a couple of years of paying your dues to work into one of the specialty areas that pay well with Landstar? If that's the case, that's fine, I'm just curious, really.

And what are the specialty areas you're referring to -- oversize loads, HHG, cars, hazmat loads or ... ?

If I were to go out and get my own authority and do my own thing, which is an alternative, I don't see how that would be an advantage compared to leasing on to a company like Landstar, though that's just me I guess.

Any and all comments and observations are welcome.

-- c t

[GMAN]

Thanks for your comments, Carolina trucker. I appreciate it. When I mentioned specialty areas, I was talking about things such as A & E and some other specialized government loads. Some of their government loads may require a security clearance, but not all. It really depends on the type of freight you want to pull. Unless you have previous experience pulling an RGN, they are not likely to allow you to get into heavy haul without first seeing how you do with a flat or perhaps step deck first. It isn't necessarily a huge leap from a step to RGN, but there are certain things you need to learn before working with heavy haul. Basic securement is the same regardless of what you put on a flat bed trailer. Knowing how to load a 100M pound machine and get it to where it should be in one piece can take a little more finesse than a legal flat bed load. If you have little or no flat bed experience, they are not likely to put you under a 12' or 14' wide load. They are going to want to see how you handle legal loads first. Some states require escorts and others may not, even with the same load. Some may want an escort in front only, or rear only or both. The more specialized a load becomes, the greater the pay. I once met a guy who leased on at the same time as me who had an 8 or 11 axle trailer. I believe he was only one or perhaps two in the entire fleet who had such a set up. When he wasn't pulling heavy haul, he pulled a flat. Most of the time agents who do those type of loads pretty much specialize in them. They may do other types of flat bed freight when there isn't any heavy haul available. If you have an agent who is inexperienced and a driver who is at the same level, you can get yourself in trouble with a over-sized or specialized load. Most of the time, agents who do flats seem to not handle vans. Some do both. If you are going to lease to Landstar, I would not worry about trying to specialize in any one area when you first sign on with them. You need to first learn their system so you can find your way around their corporate maze. I would not want to put a time frame on moving into something more specialized. They have about 5 or 6 agents who do a lot of tire loads for a couple of manufacturers. They tend to work together to some extent. There are some BCO's who mostly do tires for these agents. If you like to play around with your logs, they are not the company for you. They will check your logs and you need to make sure things match. They are real sticklers for that type of thing. They can't take a chance of their safety rating being compromised because of some of the freight they haul. You will find that they have cheap loads as well as good paying loads. That is part of the 6 months learning curve. Ask a lot of questions and tell them the type of freight you want to haul and where when you go to orientation. They should give you some names to get you started. If you aren't particular where you run, you should do well. For what it is worth, as far as I know they don't haul cars, although they may pull some vans, hummers and trucks on flats. They may have a handful of reefers, but they are mostly van or flat (or variation thereof).

[carolina trucker]

When I mentioned specialty areas, I was talking about things such as A & E and some other specialized government loads. Unless you have previous experience pulling an RGN, they are not likely to allow you to get into heavy haul without first seeing how you do with a flat or perhaps step deck first.

Sorry to display my ignorance, but what's A&E and RGN stand for?

-- c t

[rank]

RGN=removable goose neck trailer

A&E=anything and everything. :?:

[brian]

RGN is a removable gooseneck trailer.
A&E is arts and entertainment



you need a year of experience as well, well they say you do but for some a landstar agent will call with a load every once and a while :shock:

[GMAN]

A & E is ammunition and explosives. They usually require teams for those loads. I am sorry. I should have explained in more detail. There is no reason you should have known. Brian explained about RGN. Some people refer to RGN's as lowboys. They are mostly used for machinery such as bulldozers, excavators, etc., but could haul anything that is tall. Some have adjustable suspensions.

[Nomad_]

Carolina Trucker said,

"If I were to go out and get my own authority and do my own thing, which is an alternative, I don't see how that would be an advantage compared to leasing on to a company like Landstar, though that's just me I guess. "


Question for Gman,

The passage, "I don't see how that would be an advantage compared to leasing on to a company like Landstar..." stands out.

I own the benefit of reading several posts by GMAN concerning Landstar on this and other boards. I think one of the disadvantages is that Landstar has a lot of ways to trim your profits with a lot of service costs (like your telephone bills...lol). Gman went into great length in some of his previous posts explaining some of the Landstar billing (extra costs) details.

The way I see it Landstar is similar to a property manager (this may be a weak comparison) where they provide a lot of services that a Landlord/property owner would just rather not deal with (evictions, rent collection....etc..).

My question for GMan is, what are the companies (competitors to Landstar) that have a better package for new OO's? Or is getting your own authority the best alternative and the new OO needs to condition themselves to handling the paperwork/overhead?

The reason that I ask, is I may consider Landstar or competitor 3 or 4 years from now. Until then I will keep reading and learning.

Thanks in advance Gman. I always see you as the ultimate ambassador/mentor (both in knowledge and approach).

[mrpersons]

I've been leased over here at Landstar for about 3 years now and while I'm in no danger of filling up my checking account, but having a ball and that's got to worth something!

G-man gave a pretty good description of how things work over here. You have to be self motivated and seek your loads. Nothing happens until you make it happen. And it does take some time to figuire out the in's and out's to put your loads together/determine what areas to run in, also areas to stay out of!

Before I came to Landstar, I was operating for one of the major carriers (Heartland), but was sick of some clown in Iowa planning my day for me, sending me off on loads I had no real desire to pull.

I considered going independant, but one big advantage I see to being leased is that heaven forbids you get yourself in trouble, it's nice having a company with deep pockets (and an office full of lawyers) backing you up or at least taking the heat!

I highly recommend buying and owning your own truck outright before coming here. That way, the heats off and lets you relax and enjoy the ride, without all that pressure to make that last dollar to make the payment and a living at the same time. Many a day I've sat to wait for a better paying load. Don't be afraid to say no to an agent, having no payment really helps in that department.

[Jackrabbit379]

You've got at least 6 agents newly signed onto the messageboard. Shouldn't have any problems getting your questions answered, at least from their side of the coin.

Oh the names. They have "Landstar" in their names. Ahhh,ok.......Nevermind me. :? :shock: :P

[GMAN]

Carolina Trucker said,

"If I were to go out and get my own authority and do my own thing, which is an alternative, I don't see how that would be an advantage compared to leasing on to a company like Landstar, though that's just me I guess. "


Question for Gman,

The passage, "I don't see how that would be an advantage compared to leasing on to a company like Landstar..." stands out.

I own the benefit of reading several posts by GMAN concerning Landstar on this and other boards. I think one of the disadvantages is that Landstar has a lot of ways to trim your profits with a lot of service costs (like your telephone bills...lol). Gman went into great length in some of his previous posts explaining some of the Landstar billing (extra costs) details.

The way I see it Landstar is similar to a property manager (this may be a weak comparison) where they provide a lot of services that a Landlord/property owner would just rather not deal with (evictions, rent collection....etc..).

My question for GMan is, what are the companies (competitors to Landstar) that have a better package for new OO's? Or is getting your own authority the best alternative and the new OO needs to condition themselves to handling the paperwork/overhead?

The reason that I ask, is I may consider Landstar or competitor 3 or 4 years from now. Until then I will keep reading and learning.

Thanks in advance Gman. I always see you as the ultimate ambassador/mentor (both in knowledge and approach).

Thank you very much, Nomad. I just try to answer as honestly as possible and pass along a few things I have picked up over the years.

Landstar does have a lot of fees. Even if you are a broker carrier, they will charge you an extra $1.75 per load unless you have at least $1MM in cargo insurance. You don't need that much cargo insurance for most loads. You either buy the extra coverage yourself, pay the $1.75 or not take the load. Now, if they do this a few thousand times per week, you are talking about some serious money. They also charge broker carriers a fee for using Trans Flo for your bills. It is another $1.75 per load, as I recall. Trans Flo scans your bills or paperwork into a central data bank of sorts. It enables the receipient to have access to your bills in about 15 minutes from the time you sent them. It is like a fax machine. I am confident that they make money each time you use those services, but it helps you to get paid much quicker and you know that the bills have been received by their accounting people. I believe they also offer that service to their BCO's, as well. Some carriers charge by the page for Trans Flo. It is owned by Trip Pak.

Landstar is a unique animal in the freight business. There are few carriers who don't have a dispatcher system. CRST Malone, Jones, Mercer are a few who are agent based. There are some other good companies which I don't discuss much on this forum because their requirements may be more stringent. Besl is a good old company. A friend of mine leases to them. He used to have a fleet of trucks but got tired of the hassle and sold all but two that he takes turns driving. Kaplan is another good company. I know owner operators who lease to them, as well. Most of the carriers I have mentioned are flat bed companies. Some of them also have vans. Landstar only pays on 98% of the line haul. I believe Mercer pays on 99%. CRST and Jones pay on 100%, I believe. I know CRST Malone does. It depends on the type of freight you want to haul as to their competitors. You see, there are specialty areas and specialized carriers who do very well within their niche. There is a carrier who primarily hauls jet engines. They are mostly shipped on step decks. The pay is very good and it is not uncommon to see one of their owner operators who have one of the big custom sleepers. Weight doesn't matter because that is about all they haul and jet engines are usually not that heavy.

The advantage you have leasing to a carrier, such as Landstar, is that they have deep pockets and a strong freight base. There are some loads which will not be brokered out of the Landstar system. You must be leased to them to qualify for the load. If you run your authority, you have the option to haul freight offered by other brokers, which may pay more to the truck. It could also pay less. Most of the time you will make more brokering a load through Landstar than leasing on to them. I have gotten to know some of their agents over the years. I also know agents for other brokers.

Getting your authority isn't difficult. All it takes is money. Not so much for the authority itself, but insurance and working capital. There is additional paperwork when you have your authority. You must be careful to be compliant with all DOT regulations. It sounds complicated, and can be, but it mainly takes a lot of attention to detail. If you aren't good with managing yourself and time, then you may be better off leasing to a carrier who will take care of all the paperwork and details for you.

There is no need for you to get in a rush. You have plenty of time. Most carriers pay about the same percentage. Most will be right around 75% of the freight rate. That can be misleading. It is better to make 65% of a great rate than 80% of a cheap rate.

[Dejanh]

Thing i dont understand in regards to Landstar and the discussions i've seen here and elsewhere about them is people talking about these little fees involved in running their system. If they take 1.75 for extra insurance then just pay the darn thing if you think the load is good and if if you're happy and doing well thats not a reason for one to dislike them!
As I understand, most of these fees can be avoided and they are provided to you as a courtesy to run smoother,faster and be more productive and if you are, then i would concider anyone who complains to be.....(well, i am not gonna say it :wink: )....

If they make money by doing this then hats of to them, they found another way to make some extra change in the process and i personaly would not have a problem with it !

[GMAN]

If you lease to Landstar there are ways in which you can avoid some fees. You can get your own base plates, not take advances and find your own insurance. You are not required to have them do any of those things for you. Most carriers don't nickel and dime their owner operators like Landstar does with all their little fees. You can still make decent money with them. They do state in their contracts what they charge and how much. It is up to you whether you are willing to pay the fees or walk. Most carriers have some fees attached to the services they provide. I saved about $500 when I got my own base plates and permits under my own authority as opposed to having CRST Malone get them for me when I leased to them. It would likely be about the same with Landstar. I don't recall exactly what I paid them, but both carriers plate in Illinois. Most carriers make money off of fees from their owner operators, whether they are obvious or not. Even if you pay more with their fees, they will front the money for your base plates and permits and take weekly payments out of your settlement checks. They are basically acting like your bank. If you don't have the funds to pay for them yourself, then you will need to find a carrier who either pays for them at no charge or finances them for you. If they are the ones who pay then they are within their right to add additional fees to cover their costs and expenses. If you don't want to pay the charges, you can always get your own authority. There is considerable risk when a carrier puts their signs on a truck that they don't own. When you are the one with the authority, it is your neck if the owner operator or driver is involved in an accident or damages his cargo. A carrier has to pay out a lot of money to stay legal and follow the regulations of the day. For instance, a motor carrier MUST participate in a drug consortium. That runs around $100-150 per driver, whether they are an owner operator or company driver. It isn't an option. Participation in a drug consortium means that you are involved in a random drug screen program. There are a lot of other costs involved. I just got my insurance quote to renew my policy in a couple of weeks. It comes to $3,955 per year, per truck. If I leased on owner operators, it would cost $3,955 for each one that I leased on to my company. I am sure some of these carriers pay that much or more. I got a quote from the folks who do many of the members of ATA (American Trucking Association) and I am getting better rates than they offered. However, the larger carriers will likely have more claims. Rates are based upon risk. Insurance must be provided for each owner operator. That is money which must be paid up front to the insurance company. Even if it is financed, you still need to come up with about 20-30% of the annual premium. The truck must be insured before it picks up the first load. That is a lot of money.

[Nomad_]

Thanks Gman, I will log this post away (like many others). Fortunately, I have plenty of time. While lurking on your other posts, I never saw alternative carriers mentioned (just gaining your own authority), so I thought I would ask.

Whether I am trucking or doing something else in 4 years, if our paths cross, it would be an honor to buy you a steak dinner.

[rank]

Most of the time you will make more brokering a load through Landstar than leasing on to them. I have gotten to know some of their agents over the years. I also know agents for other brokers.

Did I read this right, Gman? I believe you and I were having a chat elsewhere about a load...we got $2400 and the LS o/o got $2900 (98% of 75% of $4,000). I figured this was typical....you're saying no?

If you run your authority, you have the option to haul freight offered by other brokers...

So, if I lease to LS, I can continue to operate as a private carrier and as an independant?

Seems like the best of both worlds no? Why NOT lease then?

[Dejanh]

I know they give you the option to run for them thru your own authority which is the option i'll be concidering as well..