12 Percent brokerage..

[Chris M]

I can lease a truck on with a company for 12 percent brokerage 22 percent using their trailer. Is this a good rate. The company doesn't pass the freight on to other brokers. That would be giving me 78 percent gross?? Am I missing something?? I am thinking about getting a truck. I can buy one through my credit union for 900/mo. That's for a $50,000 tractor. They also pay load nsurance and fuel tax if I purchase their IFTA sticker....I would have to buy base plates. Is this a good deal or would I be hard up making that payment everymonth? They hold one week settlement and pay every week after that. I could start with about 4,000 in the bank and don't need much luxury in my truck to survive till I get rolling good.

[DD60]

I can lease a truck on with a company for 12 percent brokerage 22 percent using their trailer. Is this a good rate. The company doesn't pass the freight on to other brokers. That would be giving me 78 percent gross?? Am I missing something?? I am thinking about getting a truck. I can buy one through my credit union for 900/mo. That's for a $50,000 tractor. They also pay load nsurance and fuel tax if I purchase their IFTA sticker....I would have to buy base plates. Is this a good deal or would I be hard up making that payment everymonth? They hold one week settlement and pay every week after that. I could start with about 4,000 in the bank and don't need much luxury in my truck to survive till I get rolling good.

One big unexpected breakdown or a few small ones can easily eat up 4,000.00. As for the brokerage,did they mention what kind of rates they offer or how much deadhead they average?IF their gross average is only 1.50 a mile and they have 10% deadhead than it is not a good deal.

[Chris M]

Good questions...I'll ask. Thanks for responding. Anything else I should ask?

[mike3fan]

Good questions...I'll ask. Thanks for responding. Anything else I should ask?

phone #'s for other O/O's on with them.

[mike3fan]

btw,my loaded avg. is $2.10@ mile and I only avg. $1.58@ mile after deadhead....

[Sonny Pruitt]

78% and they pay cargo'liability is an excellent rate
You must be able to see the rates on each move
on the settlement sheet and then your % taken out
If its a good co ,you need 78% revenue
100% surcharge passed to you
not 78% of surcharge
But 88%/78% are some nice numbers
you can fight them over surcharge later

Here is the deciding factor
Ask them a sample settlement sheet
from the last few weeks from another driver
who is leasing to them.
If the say yes
Then study them and decide
If they say no.............................................

[DD60]

78% and they pay cargo'liability is an excellent rate
You must be able to see the rates on each move
on the settlement sheet and then your % taken out
If its a good co ,you need 78% revenue
100% surcharge passed to you
not 78% of surcharge
But 88%/78% are some nice numbers
you can fight them over surcharge later

Here is the deciding factor
Ask them a sample settlement sheet
from the last few weeks from another driver
who is leasing to them.
If the say yes
Then study them and decide
If they say no.............................................

That won't really make a difference since that driver might have only had a few good weeks.78% of cheap is still cheap. There are several companies that I have seen pay 75% and cargo/liability insurance and the driver is only averaging 1.15 a mile or less after the percentage is taken out. These deals are usually a hit or miss.

[no_worries]

78%/88% of garbage is still garbage. Make sure you're awfully confident with what kind of rates they're getting before making the decision.

[Chris M]

Thanks guys. These are things I need to know. I know the company drivers make between 850-1000 week pulling a flatbed. A little less pulling chip vans and dump. Seems like I could do better if I was O/O. I think I remember him saying that his lease drivers were grossing 32-3600/week. But I'm not one to go on no proof of that.

[Sonny Pruitt]

seeing past settlements makes a huge difference

how else can you make a decision?

and asking the other drivers if that sheet is realistic

would be the clincher

the settlement sheet will show you how much the carrier is getting

and the %

If the load from the mill to the warehouse pays 500

then thats the rate no matter who hauls it

When you talk to percentage guys be careful

When they say "it pays 3200"

always ask "how much do you get from that"

You'd be surprised how many say 65% etc

"Yeah but you said it pays 3200"

Then they start talking about "to the truck"

and then you go nuts

[GMAN]

I can lease a truck on with a company for 12 percent brokerage 22 percent using their trailer. Is this a good rate. The company doesn't pass the freight on to other brokers. That would be giving me 78 percent gross?? Am I missing something?? I am thinking about getting a truck. I can buy one through my credit union for 900/mo. That's for a $50,000 tractor. They also pay load nsurance and fuel tax if I purchase their IFTA sticker....I would have to buy base plates. Is this a good deal or would I be hard up making that payment everymonth? They hold one week settlement and pay every week after that. I could start with about 4,000 in the bank and don't need much luxury in my truck to survive till I get rolling good.

78% is on the high side for most carriers to pay their owner operators. Most seem to pay around 75% of the rate if you provide your own trailer and about 65% if the carrier provides the trailer. Whether it is good or not would depend on the rates for which they are hauling and the consistency of their freight. Most carriers who pay percentage have decent rates and a fairly good freight base. You will usually do better with a percentage carrier than one that pays mileage. The carrier is responsible for paying the cargo and liability insurance. There should be no charge for IFTA stickers.