GMAN your service sounds fantastic. Would you bill the brokers/shippers direct? How would that work?

What kind of % are we talking here? Very interested.

 

GMAN, how do think the shippers you approach will like the idea of more truck companies sending them invoices?
On one hand you could offer them more trucks which would benefit the truck owners, but that could be more paperwork for the shipper depending on how they handle there vendors. They might frown on that, I dunno.

I thought of that today so I figured I'd throw it at ya. 8)

I also agree the credit card or debit card would look more professional, but if you're only dealing with a small number of trucks that could be moot if you know them already.

 

Allan, I am still in the looking and investigating stages at this point. I have been encouraged to start a dispatch service working with those who have their authority. I would be working in their behalf. I would search for loads and negotiate to get the best rates for them. It would be the owner operator running their authority who would pay the fee. I have had this suggested to me by a couple of people whom I have known for a while who are also in the business. One in particular. He suggested that I consider starting a dispatch service catering to those who have one or two trucks and find it difficult to find the better paying loads. It doesn't take much effort to throw a load on the truck, but does take some effort to find the better paying loads. It takes time to locate good paying loads. Since is difficult for me to drive much right now, it would be a good way to earn some revenue while doing what I would be doing for my own trucks anyway. The difference is that I would be doing it for others. They would still operate under their own authority, pay their own insurance, etc., The only thing I would do is search for decent paying loads. One guy whom I have spoken dispatches about 16 trucks in addition to taking care of his own trucks. He charges a flat fee each week. My idea is a bit different than any that I have seen. I would prefer something which paid a percentage of the load. I think that would be more fair to both me and the truck or owner. If the owner took a week off then he would not incur any expenses for dispatch. He would pay for my services once the load was booked. My fee could be put on a credit card, comcheck, etc., I would handle the paperwork for the load to book it and forward the confirmation to the carrier or owner. The owner would still do his own billing, collections, etc., All I would do is take care of the most time consuming aspect of his business. While he is running I would be finding loads. The fee would need to be cost fair to both of us. Since the owner would still pay his own insurance and other expenses, I was thinking about a fee of somewhere between 5-10% of the rate. My friend suggested a sliding scale based upon the rate. I think that might be somewhat confusing. I think the flat percentage rate would be easier and less confusing. It is much less expensive to pay for a dispatch service than put someone on salary. The carrier or owner would handle all of his own money. All checks would be sent to him. Getting involved in the billing, fuel taxes, etc., is not something that I am thinking about at this time, but might be a consideration at some point in the future. Right now I am only looking at dispatching. If I were to get involved in the other services it would be more like having owner operators leased under my authority. I could not afford to put people under my authority for that amount of money. There are simply too many expenses involved, mostly for compliance and insurance.

I haven't decided that I am going forward with this idea. I still need to work some details out about payment, a fair percentage and whether there would be a sufficient amount of revenue produced to warrant the extra time. I would also need to find out whether this is a service which would be wanted by those with their authority. I would also not want too many people with whom to work. I would want to limit the number of carriers or owners that I would work.

 

That is a good point about the billing, Rosty. I did have a thought about a central billing program. It would probably be better if each carrier did their own billing. I don't think that billing will be a problem. I would be representing several carriers when I speak with a shipper or broker. There are some brokers who have decent paying loads. Part of the service would be to negotiate better rates for the carrier, regardless of whether I am dealing with a broker or shipper. In talking with shippers they seem to want to work with brokers mainly due to the capacity the broker can produce. They really don't like dealing with brokers. A broker can find 10 trucks whereas a single truck carrier could only provide one and not consistently. A shipper must have assured capacity or his business suffers. By having several smaller carriers running similar or the same lanes, the shipper could be assured of a certain level of capacity. I am not saying that I would only work with shippers. In fact, I would probably need to work with brokers, at least until I could be assured of the capacity and reliability of a particular carrier. It would be my reputation on the line as well as the carrier. I want to make sure that those with whom I associate will follow through. Most shippers are not as concerned about the number of carriers as they are of the capacity. They would essentially still be dealing with one person, as they would with a broker. They would only be mailing a check to different names and addresses.

As far as using credit or debit cards are concerned, those would be used as a matter of convenience. Most people have a credit or debit card. Everything could be handled by computer without having to leave the office. When the owner books the load, I send him the rate confirmation and he gives me his credit card or other payment information. The entire transaction is complete in minutes. A comcheck or similar method of payment could be handled almost as quickly as a credit card.

I would want to approach this slowly and not take on too many new people at the same time. It could also be set up where there would be no long term agreements. Either party could walk away at any time.

 

I think 5-10% would be worth it.

Just having someone else on the phone could more then make up for it. I'm sure brokers can tell when you're a single truck operation.

 

10%? :shock: That is over 10k a year. Most dispatch services charge 2-3% depending on the rate. The last two dispatch services I have tried to use were a big JOKE. They were a lot more clueless than me and found and supposedly negotiated loads for LESS than what I found myself. :lol: I would gladly pay Mike to dispatch me :lol: However,I wouldn't want to give a big chunk of my percentage upfront until I see how he works. A good dispatch service should be able to book loads at least a day or two ahead of time and be prebooking outbound loads with higher rates than what the owner can negotiate or find. Since Mike pulls a step I don't know how well he will be able to find reefer loads. :lol: None-the-less I think it will be a great idea or better yet take it one step further: Start a brokerage. 8)

 

Its a good idea but you need a steady flow of newcomers

Once the fishing guide shows you where the fish are......you don't need him anymore

 

Some would want to continue to use G-man even after they had discovered new, good paying freight for the convenience of freeing up their time to drive.

 

Allan, you think that 5-10% would be a reasonable rate? That is pretty much what I was thinking.

DD60, you think that 5-10% would be too high? However, you also state that most dispatch services charge 2-3% but are a joke. You pretty much get what you pay for in this business. I don't see how it would be worth my time for 2-3%. It just takes too much time to locate, negotiate rates and book loads. There are a lot of loads available and takes time to search out those with the best rates and going to areas where you want to go. I am not sure it would be worth it for less than 5-10%. Besides, if you could save time it would be worth paying someone to do the grunt work. A truck doesn't make money until it moves. If I am driving and looking for loads, I can spend at least 1/2 a day or more just looking for a good load. I try to plan ahead, but it is hard to make a lot of phone calls, check loads and negotiate the best rates while driving down the highway. It is usually best to park the truck, check the computer and make calls while sitting somewhere. I prefer to book my own loads in advance, but some of my best rates have come with short notice. If I had not been able to take the call, I would have lost the load.

A good thing about the service is that it is open ended. You can book one load and if not satisfied then you can walk away. The only way I would want to do it is to have payment at the time of completion of booking the load. Unfortunately, many owner operators don't pay their bills in a timely fashion. I think it is mainly due to not getting home as often as they need. Once the load has been booked, my job as a dispatcher would be complete other than a possible follow through to make sure everything went as agreed. It would require additional time and paperwork for me to get into a monthly billing cycle. I think a pay as you go is much more appealing. If you try it and don't like it then you can always go back to the way you were doing things.

It takes a while to learn how each of us works. I would need to get to know each person, where they like to run and their minimum rate that they want to haul. I would then work on loads that paid above that rate. The higher the rate over your minimum would be good for everyone. We are in for some difficult times. Some of the better paying loads will not stay around long. Sometimes it is a matter of being available or in the right place at the right time. I don't think this is a service for everyone. If you enjoy looking for loads yourself, then it may not be for you. The fee would be deductible as a business expense. If it saves you 1/2 day per week looking for loads, then it may be worth it. I think the average small carrier or owner spends more than 1/2 day looking for good loads. I have been thinking about getting my broker authority for a few years. That may be something to think about later. It would be a different relationship. A dispatcher works for the carrier. A broker works for the shipper.



I am not really worried about a carrier finding out where I find loads. It is difficult to find a single source who can keep you moving. Besides, there is still the negotiating part. For instance, I have one broker whom I have hauled loads for $3/mile who has called me with loads which pay less than $1.50/mile. I won't book loads for my own trucks for less than a certain figure. If you use a cell phone, you can use up a lot of your minutes talking to brokers about cheap loads. My personal experience is that each load must be negotiated. I think that if I do a good job that it would be worth it to the carrier to keep the relationship. There is a certain amount of attrition with any business. Some will go out of business. Some may get tired of the paperwork and decide to lease to a carrier and others my sell everything and become a company driver. There will always be those who look at paying a dispatch service $10,000 rather than looking at the $100,000+ they are making. They worry about the money they pay the dispatch service rather than the extra $20,000 they made due to the efforts of the dispatch service. This is not a service for everyone. I think the service could more than pay for itself.

 

Mike,2-3% would be the amount starting out. Notice that I said 10% was too high. Than again it depends on how the dispatch service keeps my truck moving and at what rate to make above and beyond the dispatching fees. Dispatch-for-hire in Atlanta charges 500.00 a month which amounts to about 6%. They are a BIG joke. After the first 2 weeks and some phone calls I decided not to use them.