Quote:
Originally Posted by 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).
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.