I'm not an owner operator yet, but father with no previous experience just got his cdl last month and a used truck and used flatbed and is running under his own authority.

He has been getting loads from someone who gets them from a broker. So right off the bat he is losing 5% to the person who has been scheduling the loads plus whatever the original broker is getting. Obviously, this is not the way to make the most money you can.

He is planning to start scheduling loads by himself in the next two weeks through load boards once he gets set up with web access and a laptop.

I gave him the name of a broker that my boss at work is friends with. He is wary of trying to use more than one broker. I tried to tell him that using the boards he will by default be using more than one broker. Do you guys deal exclusively with one broker or many brokers? How do you guys handle the calls from brokers offering loads?

He is using a non-recourse factoring company to get paid.


Any comments, ideas, or suggestions?

 

If he has started out by using a factoring company, he is well on his way to failure. It sounds like he jumped in without knowing what he was doing.

 

I'm not so sure that is the case, but thanks for the opinion.

While factoring may not be the best choice for the long run, it seems to be working for now and he does not have to worry about not getting paid.

 

Doing All Right?

 

Factoring is going to be the reality for awhile. He knows it is not ideal. As long as he makes a decent profit I don't see the problem for him right now. The plus is he is covered in case someone does not pay.

i.e.
He takes a 1000mi job paying $2.50 a mile. The factoring fee is I think 5%. That is $125. That is the same as 27.8 gallons of fuel at $4.50 a gallon. If he gets 6.5mpg that is the same as him getting 5.5mpg.

I would be more concerned about people who are running a newer truck with a high payment. Or a truck that gets poor gas mileage. Or the trucker who is highly in debt.

This is his second income.

 

Getting back on topic the real question is how most O/O's deal with brokers and how they get their loads.

 

Did you skip Geometry in school?

Let's say you have a circle which has a radius of 500 miles. The center point is where my father is based. He picks up a load near home and drives 500 miles to deliver it. He gets a load at that point to the far side of the circle which is 1000 miles away.

Anyway, that was just an example.