Find Customers Who Need Your Truck

Your ability to find customers who need trucks will put you on the right path to success. Establishing your own direct customers is the best way to guarantee a dependable cash flow. When you provide a direct customer with dedicated reliable trucking services they will be more apt to pay you on time and keep you loaded with their product. Both of which help make an excellent business relationship for years to come.

The most effective way I found my customers is by keeping my eyes and ears open when making pickups and deliveries. Look at the product on the docks or at the locations and gather all the information you can. Look for company names and address on boxes, product or anywhere else. Ask questions of the shipper or receiver like…

  1. Do you get that product every week?
  2. Does the same truck bring it or pick it up each week?
  3. Could you use a reliable dedicated truck?
  4. Who can I talk to?

Ask the drivers making pickups and deliveries questions to like…

  1. Do you haul this load every week?
  2. Did you get it from a broker?
  3. Do they have other loads every week?

You will be surprised at how much information you can gain just by politely talking to people at the shippers and receivers. It is important to point out to be respectful, polite and above all cautious. If they don’t want to discuss it with you thank them for their time and if you think an apology is in order to keep the peace then by all means apologize! Don’t be offended if a shipper or receiver doesn’t want to discuss their product shipments because they are most likely an employee that is not responsible for locating trucks. That is why you politely ask “who can I talk to?” If a driver doesn’t want to discuss his load it’s most likely because he owns his truck, he’s feeling threatened and wants to protect his relationship with his customer. Very understandable of a fellow truck owner. A sincere apology, congratulating them for acquiring such a valued customer and asking them for advice from their success would be the best response. They still may not talk to you but you have taken the high road and defused the situation.

Potential customers that need trucks are located everywhere. I have been known to stop as soon as I notice a business with trucks that are pulling the same trailer that I am pulling or that I am considering pulling (dry van, refer, step deck, dry bulk, etc.). There is nothing wrong with stopping, introducing yourself and meeting a potential new customer face to face. Business parks and business districts are a treasure-trove of potential new customers. Search them out and introduce yourself to as many businesses who will allow you the opportunity. In fact I have enjoyed more successful negotiations when I meet the customer in person even when walking in unannounced. They are able to read my body language, look into my eyes and see my confidence and commitment to their success. That is more valuable than anything you could put in a written contract or express over the phone. If at all possible meet with your potential and existing customers as often as possible. The rewards of a successful business relationship are increased immeasurably!

Take full advantage of customers who need your truck by learning how to get your own Operating Authority.

How to get an FMCSA Operating Authority

Letter of Authority

Deciding to get your own FMCSA operating authority and DOT number is a big step. Most use agents to help them get started. Unfortunately they cost a lot of money. I’m going to share with you all the different regulating agencies and how to contact them. By doing so, I’m giving you the ability to get set up with all of them so you can avoid paying an agent more than necessary. What better way to start your business than by saving money and learning compliancy requirements at the same time! Here are the basic Federal requirements (there are more and I’ll discuss them soon).

1. FMCSA Operating Authority “MC” “FF” or “MX” number

2. Department of Transportation (DOT) number

3. Commercial Insurance

4. *Unified Carrier Registration (UCR)

5. *International Fuel Tax Agreement (IFTA)

6. *International Registration Plan (IRP)

7. BOC-3

* These 3 are frequently done at the same time at your state or jurisdiction office. In most cases you can apply, pay and receive all of them in person and on the same day. It is wise to verify in advance what types of payments your state or jurisdiction will accept as they are all different.

FMCSA Operating Authority “MC” number

The FMCSA website states…

“In general, companies that do the following are required to have interstate Operating Authority (MC number) in addition to a DOT number:

Operate as for-hire carriers (for a fee or other compensation)”

Since the one time fee is only $300.00, I recommend every “For-Hire” carrier to not take any chances or run the risk of operating without having their MC (Motor Carrier) number. It is a fairly simple process and can be done through the SaferSys website (an FMCSA website).

Department of Transportation (DOT) number

I have never seen a truck or met a truck owner that wasn’t required to have a USDOT number. The FMCSA’s website states…

“You are required to obtain a USDOT number if you have a vehicle that:

Is used in transporting material found by the Secretary of Transportation to be hazardous and transported in a quantity requiring placarding (whether interstate or intrastate).

OR

Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more, whichever is greater”

and goes on to state…

“AND is involved in Interstate commerce:

Trade, traffic, or transportation in the United States—

Between a place in a State and a place outside of such State (including a place outside of the United States);

Between two places in a State through another State or a place outside of the United States; or

Between two places in a State as part of trade, traffic, or transportation originating or terminating outside the State or the United States.

You are required by FMCSA to obtain USDOT Number and comply with the Federal Regulations.”

The FMCSA concludes with…

“Apart from federal regulations, some states require commercial motor vehicle registrants to obtain a USDOT Number. These states include:

Alabama, Alaska, Arizona, Colorado, Connecticut, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, New Jersey, New York, Nebraska, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, Wyoming”

Obtaining a USDOT number is free. The FMCSA made it convenient to apply for a USDOT number at the same time you apply for a MC number by using the SaferSys website. You will be required to complete and submit the MCS -150 form which defines your business to the USDOT before they will issue you a USDOT number.

Commercial Insurance

Once you have applied for your FMCSA operating authority you will need commercial insurance before your MC number is ready to be used legally. Your insurance company is required to notify the FMCSA once you have purchased your insurance. This process of the insurance company notifying the FMCSA of your policy and the FMCSA updating your MC number with the insurance does take time. Your insurance agent and/or company will be able to provide you with the coverage requirements from the FMCSA.

Unified Carrier Registration (UCR)

The Unified Carrier Registration (UCR) is a registration based on the number of vehicles (trucks) you operate. You can complete your UCR either through the UCR website or many times through your state you operate from. UCR is paid annually.

International Fuel Tax Agreement (IFTA)

IFTA accounts are free and depending on your state or jurisdiction you may or may not pay for the IFTA stickers that are required for each truck in your fleet. I normally start my IFTA account and receive my stickers on the same day I pay for and receive my IRP plates (which I will discuss next). Renewal each year is typically done either on a state or jurisdiction website or by mail. Filing your IFTA taxes is a quarterly requirement.

International Registration Plan (IRP)

The International Registration Plan (IRP) is the registration and license plates for all your vehicles. It is an apportioned registration. Meaning you will pay a portion of each states registration fee based on the percentage of miles you operate in each state or jurisdiction. When you apply for your first IRP you will be required to use “estimated miles.” This does not mean you get to estimate your miles. The estimated miles are provided to you by your state or jurisdiction. In most cases it will be your responsibility to put the correct estimated miles for each state or jurisdiction in the correct field. If it is not correct the IRP official (in most cases) will not fix the mistakes but rather give it back to you and have you fix them. That means going back to the end of the line. I failed to get the correct estimated mileage one time and it took me 3 hours to get back to the IRP official so I could pay my bill and complete my registration.

BOC-3

The BOC-3 is one of the most overlooked requirements by the FMCSA. The reason is simple. There is not a “check and balance” or verification process before being allowed to operate using your new authority. The purpose of the BOC-3 is to provide the FMCSA with a list of agents from the states or jurisdictions you operate in that will receive legal documents. The FMCSA describes it’s purpose this way…

“A process agent is a representative upon whom court papers may be served in any proceeding brought against a motor carrier, broker, or freight forwarder. Every motor carrier (of property or passengers) shall make a designation for each State in which it is authorized to operate and for each State traversed during such operations.”

Now I don’t normally recommend using an agent for much of anything. However, in this case it is best. Otherwise you will need to locate representatives for every state or jurisdiction and continually verify that the representative is still in business. Personally, I have enough to do without calling 50+ representatives every week or 2 to verify they are still in business. Through an agent, a BOC-3 will cost you a 1 time fee of normally no more than $50.00. A list of agents is provided by the FMCSA on their website.

Deciding to get your own FMCSA operating authority and DOT number is a big step. Most use agents to help them get started. Unfortunately they cost a lot of money. I’m going to share with you all the different regulating agencies and how to contact them. By doing so, I’m giving you the ability to get set up with all of them so you can avoid paying an agent more than necessary. What better way to start your business than by saving money and learning compliancy requirements at the same time! Here are the basic Federal requirements (there are more and I’ll discuss them soon).

1. FMCSA Operating Authority “MC” “FF” or “MX” number

2. Department of Transportation (DOT) number

3. Commercial Insurance

4. *Unified Carrier Registration (UCR)

5. *International Fuel Tax Agreement (IFTA)

6. *International Registration Plan (IRP)

7. BOC-3

* These 3 are frequently done at the same time at your state or jurisdiction office. In most cases you can apply, pay and receive all of them in person and on the same day. It is wise to verify in advance what types of payments your state or jurisdiction will accept as they are all different.

FMCSA Operating Authority “MC” number

The FMCSA website states…

“In general, companies that do the following are required to have interstate Operating Authority (MC number) in addition to a DOT number:

Operate as for-hire carriers (for a fee or other compensation)”

Since the one time fee is only $300.00, I recommend every “For-Hire” carrier to not take any chances or run the risk of operating without having their MC (Motor Carrier) number. It is a fairly simple process and can be done through the SaferSys website (an FMCSA website).

Department of Transportation (DOT) number

I have never seen a truck or met a truck owner that wasn’t required to have a USDOT number. The FMCSA’s website states…

“You are required to obtain a USDOT number if you have a vehicle that:

Is used in transporting material found by the Secretary of Transportation to be hazardous and transported in a quantity requiring placarding (whether interstate or intrastate).

OR

Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more, whichever is greater”

and goes on to state…

“AND is involved in Interstate commerce:

Trade, traffic, or transportation in the United States—

Between a place in a State and a place outside of such State (including a place outside of the United States);

Between two places in a State through another State or a place outside of the United States; or

Between two places in a State as part of trade, traffic, or transportation originating or terminating outside the State or the United States.

You are required by FMCSA to obtain USDOT Number and comply with the Federal Regulations.”

The FMCSA concludes with…

“Apart from federal regulations, some states require commercial motor vehicle registrants to obtain a USDOT Number. These states include:

Alabama, Alaska, Arizona, Colorado, Connecticut, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, New Jersey, New York, Nebraska, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, Wyoming”

Obtaining a USDOT number is free. The FMCSA made it convenient to apply for a USDOT number at the same time you apply for a MC number by using the SaferSys website. You will be required to complete and submit the MCS -150 form which defines your business to the USDOT before they will issue you a USDOT number.

Commercial Insurance

Once you have applied for your FMCSA operating authority you will need commercial insurance before your MC number is ready to be used legally. Your insurance company is required to notify the FMCSA once you have purchased your insurance. This process of the insurance company notifying the FMCSA of your policy and the FMCSA updating your MC number with the insurance does take time. Your insurance agent and/or company will be able to provide you with the coverage requirements from the FMCSA.

Unified Carrier Registration (UCR)

The Unified Carrier Registration (UCR) is a registration based on the number of vehicles (trucks) you operate. You can complete your UCR either through the UCR website or many times through your state you operate from. UCR is paid annually.

International Fuel Tax Agreement (IFTA)

IFTA accounts are free and depending on your state or jurisdiction you may or may not pay for the IFTA stickers that are required for each truck in your fleet. I normally start my IFTA account and receive my stickers on the same day I pay for and receive my IRP plates (which I will discuss next). Renewal each year is typically done either on a state or jurisdiction website or by mail. Filing your IFTA taxes is a quarterly requirement.

International Registration Plan (IRP)

The International Registration Plan (IRP) is the registration and license plates for all your vehicles. It is an apportioned registration. Meaning you will pay a portion of each states registration fee based on the percentage of miles you operate in each state or jurisdiction. When you apply for your first IRP you will be required to use “estimated miles.” This does not mean you get to estimate your miles. The estimated miles are provided to you by your state or jurisdiction. In most cases it will be your responsibility to put the correct estimated miles for each state or jurisdiction in the correct field. If it is not correct the IRP official (in most cases) will not fix the mistakes but rather give it back to you and have you fix them. That means going back to the end of the line. I failed to get the correct estimated mileage one time and it took me 3 hours to get back to the IRP official so I could pay my bill and complete my registration.

BOC-3

The BOC-3 is one of the most overlooked requirements by the FMCSA. The reason is simple. There is not a “check and balance” or verification process before being allowed to operate using your new authority. The purpose of the BOC-3 is to provide the FMCSA with a list of agents from the states or jurisdictions you operate in that will receive legal documents. The FMCSA describes it’s purpose this way…

“A process agent is a representative upon whom court papers may be served in any proceeding brought against a motor carrier, broker, or freight forwarder. Every motor carrier (of property or passengers) shall make a designation for each State in which it is authorized to operate and for each State traversed during such operations.”

Now I don’t normally recommend using an agent for much of anything. However, in this case it is best. Otherwise you will need to locate representatives for every state or jurisdiction and continually verify that the representative is still in business. Personally, I have enough to do without calling 50+ representatives every week or 2 to verify they are still in business. Through an agent, a BOC-3 will cost you a 1 time fee of normally no more than $50.00. A list of agents is provided by the FMCSA on their website.

Aside from the cost of your insurance and IRP, the entire cost to you should not exceed around $400.00. Many agents charge thousands of dollars. Since I’m always looking to save money and improve my profits, it only makes sense for me to spend a little time educating myself, complete the applications or filings, and saving money at the same time. If you want to learn more check out the category Business of Trucking.

Aside from the cost of your insurance and IRP, the entire cost to you should not exceed around $400.00. Many agents charge thousands of dollars. Since I’m always looking to save money and improve my profits, it only makes sense for me to spend a little time educating myself, complete the applications or filings, and saving money at the same time. If you want to learn more check out the category Business of Trucking.

How IFTA Works

IFTA rates available from the International Fuel Tax Association, Inc.

One of the most frequently asked questions I get is “So how does IFTA work anyway?” Once truck owners understand IFTA they all change their fuel purchasing ways. In doing so they lower their fuel cost and improve their profits.

In the day of the original “bingo card” registration, which no longer exists, truck owners had to buy just enough fuel to drive in each state. Since then the International Fuel Tax Agreement (IFTA) was created. IFTA completely eliminated the need to buy fuel in every state. In fact, doing so all but guarantees you are paying far more for your fuel than necessary.

IFTA fuel taxes are collected in all states and jurisdictions that have a state or jurisdiction fuel tax. Oregon does not have fuel taxes but they do issue IFTA accounts. All carriers who operate an apportioned IRP are required to have an IFTA account and a list of states or jurisdictions they operate in. At the end of each quarter you will file your quarterly IFTA fuel taxes. Here is where the value of understanding IFTA turns into lower fuel cost. You owe each state it’s fuel tax based on how many gallons you used while driving in their state. Not how much you bought! What that means is when you buy fuel at the lowest cost BEFORE taxes you will almost always be due a refund at the end of the quarter. Here is how that works using 2nd quarter 2015 IFTA fuel tax rates.

Illinois Pump Price $3.399

Missouri Pump Price $3.259

Most truck owners will buy Missouri because it costs less at the pump.

2015 2nd Qt. IFTA Fuel Taxes

Illinois .4270

Missouri .1700

Your truck averages 5mpg

You drive 50 miles in Illinois and 50 miles in Missouri

You owe each state a IFTA fuel tax on 10 gallons of fuel

Buying fuel in Missouri

You buy 20 gallons of fuel in Missouri for $3.259 a gallon

Actual fuel cost without tax is $3.089

You have an IFTA tax credit of $1.70 from Missouri

You owe Illinois an IFTA tax of $4.27

You owe a IFTA tax Payment of $2.57

Instead, Buy fuel in Illinois

You buy 20 gallons of fuel in Illinois for $3.399 a gallon

Actual fuel cost without tax is $2.972

You have an IFTA tax credit of $4.27 from Illinois

You owe Missouri an IFTA tax of $1.70

You have a tax credit and Refund of $2.57

In this example the answer for “How Does IFTA Work” means purchasing fuel in Illinois is a 3 month investment that lowers your fuel cost by almost $.12 a gallon! If your truck averages 5 mpg, you are increasing your profits by $.025 per mile. If you drive 175,000 miles in a year, that is a total savings of $4,375.00! Yes, understanding IFTA can save you thousands of dollars every year for each and every truck you own! Learn more ways to save money and increase profits in my After Market Truck Parts post.

Planning for a Negative Economy

Planing for negative economic swings is a must for all truck owners. There are plenty of warning signs that have been detailed recently by several economists and business publications such as lombardiletter.com, Fortune.com, Bloomberg and Fox Business that indicate our economy is beginning to slow. That means less freight transportation opportunities for non-essential items. Products such as: building materials, boats, RV’s, new vehicles, electronics, plastic products, books, general house hold goods and the list of products that will all be negatively impacted is endless. Avoiding transporting these types of products and choosing a more economy resistant product is your best defense against a slow economy or even a recession or depression.

My view of the best freight to haul is based on my business philosophy. I strongly believe in consistent and reliable cash flow. In trucking that means hauling freight that is the most reliable during both good and bad economic times. Currently the economy is booming and my article “Trucking – Never Been Better” outlines some of the best times I’ve enjoyed in Trucking. However, economies are ever changing and the days of our good economy are certain to end. Preparing now for a negative economy ahead of it’s impact on trucking is your best defense from a financial disaster.

Transporting food, especially refrigerated food, is the most consistent freight to transport that is the least impacted by a bad or down economy. Food is the last product that consumers stop purchasing. As such, choosing a customer that supplies refrigerated food products to the most basic supplier of foods to consumers is the most stable freight you can transport. If you have a choice to haul fresh beef to a grocery store warehouse or to haul fresh Caviar to an exclusive retailer you would be more secure hauling the beef. Beef products are purchased by a much larger customer base and are a staple of virtually every home in the United States and around the world.

Nothing is a guarantee. But it does seem obvious to me that transporting fresh food products that are a staple in almost every home refrigerator in American is the most resistant to economy swings. Thus they are the very best product to haul to enjoy a successful and profitable trucking business.

Drug & Alcohol Clearinghouse

What Every Truck Owner Needs to Know

The latest FMCSA burden on truck owners is the new Drug & Alcohol Clearinghouse. In an already over regulated industry this new requirement adds yet another hurdle to overcome to be compliant when operating your own FMCSA Operating Authority. All who have an FMCSA Operating Authority are required to participate in the FMCSA Drug & Alcohol Clearinghouse. The FMCSA even went out of their way to single out Independent Owner Operators such as myself.

An owner-operator (an employer who employs himself or herself as a CDL driver, typically a single-driver operation) is subject to the requirements pertaining to employers as well as those pertaining to drivers. Under the Clearinghouse final rule, an employer who employs himself or herself as a CDL driver must designate a consortium/third-party administrator (C/TPA) to comply with the employer’s Clearinghouse reporting requirements (§ 382.705(b)(6)).

Unlike the ELD mandate, there is not a way to avoid this compliance obstacle. You must participate in the Clearinghouse or face the certain consequences that are sure to follow if you do not. To avoid those consequences I strongly suggest creating your FMCSA Drug & Alcohol Clearinghouse account as soon as possible. In doing so you can continue to operate compliantly and not have a target on you for an FMCSA audit. Here is how to get it done.

The first step is to create an FMCSA Drug & Alcohol Clearinghouse account.

Authorized users must register to request access to information in the Clearinghouse. You will need to sign in with a login.gov account to begin your Clearinghouse registration.

On the surface that seems simple enough. However, when you examine the details a little closer you’ll discover that you can’t use your FMCSA login PIN or your USDOT login PIN. In order to create a FMCSA Drug & Alcohol Clearinghouse account you must first have a login.gov account. Once you have created your login.gov account you will be able to continue. As a truck owner with an FMCSA Operating Authority you will create an “Employer Admin” account. If you are an Independent Owner Operator there will be an option to select specifically for Independent Owner Operators. As an Independent Owner Operator, once you have successfully created your Employer Admin account you will want to register as a Driver as well.

The next is to select you Drug & Alcohol Consortium.

Designate Your C/TPA (required)
As an owner-operator, you are required to work with at least one consortia/third-party administration (C/TPA) to manage your drug and alcohol testing program. You will need to designate your C/TPA(s) in the Clearinghouse before they can conduct queries and/or report violations on your behalf.

Once you have created your account as an Employer Admin, you will need to select your Drug & Alcohol Consortium provider from the FMCSA Drug & Alcohol Clearinghouse participating consortiums. This is where you can run into issues. If your Drug & Alcohol Consortium is not listed, they are NOT an approved Drug & Alcohol Consortium. You must contact your Drug & Alcohol Consortium and ask them to register with the FMCSA Drug & Alcohol Clearinghouse or you will need to choose another Drug & Alcohol Consortium provider who is approved by the FMCSA Drug & Alcohol Clearinghouse and compliant.

Lastly, you will be required to purchase a “Query Plan.”

All employers of CDL drivers must purchase a query plan in the Clearinghouse. This query plan enables employers, and their consortia/third-party administrators (C/TPAs), to conduct queries of driver Clearinghouse records.

Registered employers must log into their Clearinghouse accounts to purchase their query plan. Query plans may be purchased from the FMCSA Clearinghouse only.

For Independent Owner Operators, I recommend purchasing the “Flat per query rate ($1.25), for limited and full queries.” It is by far the most affordable and does exactly what you need without over paying.

There are a multitude of other compliancy rules and regulations you must comply with when having your own FMCSA Operating Authority. To learn more about them read my post How to get an FMCSA Operating Authority.

Avoid the FMCSA ELD Mandate

Avoid an ELD at all cost! Straight from the FMCSA.

Like most everyone else who owns a truck, I have no desire to use an FMCSA mandated ELD. I was surprised to discover that not everyone will be required to use an ELD. There are a few exceptions to the ELD mandate. For over the road truck owners, there is only 1 possible exemption to avoid the FMCSA ELD mandate.

I began my research by reading the FMCSA’s 4910-EX-P. More commonly known as the FMCSA’s “Final Rule” for ELD’s. As a truck owner, what caught my attention more than any other was the following paragraph.

FMCSA also includes an exception for to those drivers operating CMVs older than model year 2000, as identified by the vehicle identification number (VIN) of the CMV. Comments have indicated and FMCSA’s research has confirmed that pre-2000 model year trucks may not allow the ELD to connect easily to the engine. While the Agency has confirmed that there are ways of equipping older vehicles to use an ELD consistent with today’s rule technical specifications, these are not always cost beneficial or practical. Further, the Agency lacks confidence that the technology will be available to address this entire segment of the market (pre-2000 model years) at a reasonable cost.

“CMV” is an abbreviation for “Commercial Motor Vehicle.” The FMCSA realized the challenges for pre-2000 model year trucks to meet the ELD mandate. While that in itself didn’t surprise me, what did is that the FMCSA is not requiring the costly retrofitting of ELD’s to pre-2000 model year trucks.

For all of us who already operate a pre-2000 model year truck, it will be in our best interests to keep our trucks on the road for as long as we possibly can. When the time comes, I plan to have my 1999 9900i International completely reconditioned. Everything including removing, stripping and painting the frame rails, replacing all wiring, gutting, customizing and detailing the interior, rebuild the entire drive line, a fresh paint job and anything else that needs done. While that all sounds expensive, it is far more affordable than a new truck that sells for around $150,000.00. Plus you can still depreciate rebuilding your truck over a 3 year period just as if you would by purchasing a truck.

I plan to keep my truck on the road for many years to come. In doing so, I will avoid the FMCSA ELD mandate until the FMCSA changes the rules again or until I buy a newer truck. Read more on how I keep my pre-2000 truck on the road in my other posts After Market Truck Parts and Junk Yard Truck Parts.

Use Your Military License to get a CDL

Last minute adjustments before rolling out the gate.

The benefit of using your CDL equivalent military license and a letter from your commander to obtain a skills test (driving test) waiver for your CDL provides an excellent opportunity to start a new career in the professional trucking industry. What if you don’t have a military equivalent CDL license? You still qualify for a wide variety of programs allowing you to also begin a professional trucking career in as little as 2 months. Some carriers have been approved to offer GI Bill benefits such as Crete Carrier Corp. So if you are a veteran and looking for a new career, trucking is an excellent industry to consider.

While I’m no fan of all the burdensome high cost regulations that are coming from the FMCSA these days, I do applaud them for creating the standards for all states to grant the skills test (driving test) waiver for military members and veterans. Moreover I appreciate all the states for accepting and creating this program for qualified military veterans returning to their civilian lives.

While obtaining your CDL is not as easy as it used to be, the process is fairly simple. First obtain the pre-formatted letter from your commander and store it in a safe place with your military license. A blank copy can be obtained from the FMCSA website. Next is a DOT physical from a Certified Medical Examiner (MEs) listed on FMCSA’s National Registry. You can search for a Certified Medical Examiner at the FMCSA’s website. After you receive your physical and you know you’re ready for the written test it’s time to go to your closest drivers license office that offers CDL exams. It should be noted that some states do not offer the CDL exams at all their locations. Then present your military license, Commanders letter and DOT physical results to the drivers license office and take your written exam.

If being a professional truck driver is something you are considering don’t miss the opportunity to use your military license to get a CDL. If you would like to read more on the specific details (and tons of extra stuff that won’t effect you) check out the full details at the FMCSA Military Skills Test Waiver page.

Meeting Potential New Customers

I received an email from a reader who asked some great questions for meeting potential new customers. He wrote…

“I have had my authority now for about 6 months and have been solely using brokers.  As you have already stated, the profit margins are very low and I feel the need to acquire my own direct customers in order to be more profitable and build up my company.  I am currently re-working my business model and after that I will make out my business plan as per your articles. The way you have described the processes greatly reduce my apprehensions.  Couple questions I do have are: What are some tips or the best ways to go about doing research on a prospective company, especially concerning what they are used to paying to ship out? Also, who determines shipping origination? For example, does a shipper control which carriers to use or would a receiver determine which carriers it prefers its shippers to use? I would need to know that to determine who to contact.”

First is determining the rates. As I mentioned in my Carrier Rate Agreement or Carrier Contract post, it is important to secure long term customers. I never concern myself with how much my customers are paying another carrier. All I focus on is ensuring I am successfully providing my customers with a rate that is profitable for both of us to succeed. This has enabled me to secure long term and successful business relationships.  However, in order to negotiate I had to at least have an idea what the rates were in the lanes I planned to be working within. What has worked best for me is using a combination of 2 different resources.

The first is brokers. As a rule, when I’m trying to learn rates for a new lane, I call 5 brokers and inquire about available loads they have posted. It is also important to note that different days of the week will sometimes have different rates. This is most common in the fresh food industries such as meat, dairy and produce. The best rates for produce tend to be on Monday and Tuesday with delivery before the upcoming weekend. Likewise, the best rates for meat and dairy are normally found on Thursdays and Fridays for Monday delivery. So plan to do your rate research more than once and change up what days you check it on. Locating free load boards is easy but I will share the ones I rely on the most when researching rates.

Pick A Truck Load – Dry van, Flat bed, Reefer and misc.

LandStar – Dry van, Flat bed, Oversize, LTL, and misc.

Car Hauler Dispatch – Cars, Trucks, Boats and Camper/Cargo trailers.

Once you have the rate quotes from the brokers, simply add 20% to their rates they are quoting you and that is the rate they are quoting to their customer. Then take the average of all the quotes you were able to acquire and you now have a solid rate for that lane. IMPORTANT – You’re not done yet! In order to be profitable in the trucking industry you need to know what the rate will be going back to your customer. Except for specialty loads that only transport product in one direction, we all need loads that get us as close to our customer as possible when we return. So do your rate research with brokers for returning loads as well. In most cases you will rely on those brokers for loads. So take their rates at face value (what they quote is what you will get). When doing the return research, be mindful of how many loads are available. For example, there are very few dry van loads out of south Florida. So you need to plan accordingly if you are taking dry van loads to south Florida.

The other way I learn the rates is directly from the potential customer. I will always do my research using the brokers before meeting potential new customers. Then when meeting potential customers I compare the 2 rates. Sometimes the potential customer will surprise you and the rate they quote you will be higher than what your research revealed. The reason is because they know direct carriers are far more reliable than a broker and are willing to pay additional for it. It doesn’t happen often, but it has happened to me on 2 different occasions.

Most certainly customers do have preferred carriers they use. I have made it a personal requirement of mine to be that preferred carrier for all my customers. The rewards for doing so include more loads, faster pay, better rates (over time), the best lanes and above all success for both my customers and myself. Read my post Trucking Customers – Vital for Truck Owners to see my best tips to becoming your customers preferred carrier.

Sometimes when meeting potential new customers they will tell you that their customer coordinates the shipping. This is common with volume buyers such as Walmart, Costco, Tyson, Goodyear, GE and more than I could ever list. In these cases, the potential customer will most likely not provide you with the receivers contact information. Don’t be offended. They are typically bound by the contract not to give out the information. Simply give your contact information and politely let them know that if they ever do need a carrier you’d be happy to provide them a quote. There are instances the potential customer will provide you with the receivers contact information. When that happens make sure to contact the receiver because chances are high that since you were given the information the shipper isn’t getting enough trucks to ship the product on.

Before meeting potential new customers, read my post Make a Business Plan. It details many lessons I learned when I was meeting potential new customers.

Thank you for the email. I hope to hear from you again soon. Above all, Good luck!

Trucking Customers – Vital for Truck Owners

What is trucking? Getting your customers (trucking customers that is) product to market so they can succeed and in turn make you successful. Welcome the responsibility your customer has entrusted you with… their success! That responsibility should never be taken lightly.  If you do it could jeopardize your own business. More importantly, realize the wonderful opportunity that responsibility offers you and the unlimited potential for your business’s success.  In any business customer satisfaction is always paramount. In trucking that means reliability and reliability begins with dedication to your customers.

1. Always be early for pickup and delivery. Never plan to be just in time (unless you are doing “just in time” service for your customer). That provides you with at least the possibility to overcome a flat tire, dirty fuel filter, DOT inspection, etc. and still pickup or deliver on time.

2. Set yourself apart and be the one carrier your customer can count on during the holidays. Holidays are the hardest time for customers to find reliable dependable carriers. If you separate yourself above your competition for the holidays your customer is more likely to give you their business during the slow season. They will want to keep you because you are there when they need you the most.

Be thankful for their business and never miss an opportunity to show your thankfulness like…

1. Be kind, wear a smile and always say “please” and “thank you.” No one likes working with someone with an attitude or a chip on their shoulder. Just like Grandma used to say “you reap what you sow.”

2. Give gift certificates. Not only to the person responsible for giving you their business but also the employees loading your trailer. It is a very inexpensive way to show the forklift operators you appreciate them and what they do. In return they will be more inclined to take additional care when loading your trailer.

3. Be understanding. Just like trucking has unexpected chaos our customers businesses do too. If you are not willing to be understanding, patient and cooperative do you think your customer will be understanding, patient and cooperative the next time your pickup or delivery is late due to a break down?

Treat all your customers as valued business partners. Always remember that a customer is who you send your invoice to and expect payment from. That includes brokers. Brokers are not the enemy and sometimes come in very handy when the need arises.

Locating potential new customers is not as hard as you think. With only 1 truck to offer my customers I have successfully negotiated contracts with and hauled for a variety of companies. To name just a few of the companies I have enjoyed successful business relationship with – Perdue Farms, Odom’s Tennessee Pride Sausage, Performance Food Group, Letica Corp., JL Gonzalez, Redline, Omni Meats, Saputo Cheese, Atlas Cold Storage, Gulf Stream Coach and many more. The key to all the successful contracts and business relationships I have enjoyed began with locating them. I’ll share with you how I found my customers in an upcoming post “Find Customers Who Need a Truck.”

How to be Profitable Owning a Truck

Standing in front of my 2007 Peterbilt.

David sent me a message that is all to common for new truck owners. His concern is how to be profitable owning a truck.

“How did you manage to make a profit? It seems as though I find loads but they are so underpaid that it feels I’m only making money to cover the fuel. I would appreciate any input you have!”

In order to answer David’s concern of how to be profitable owning a truck, “How did you manage to make a profit,” I am going to make a few assumptions.

1. There is a truck payment

2. There are no or few direct customers

3. “Agents” or “Professionals” are being used for some or all compliance

For me, initially profit did not come easy. In fact, in the very beginning it didn’t come at all. In my first week of owning my first truck I suffered a major set back. My truck blew out the front rear end. To make matters worse, the mechanic discovered that the previous owner had custom machined gears made and put them in both rear ends. So I had a decision to make. Give up or fight back. I have a “Never Fail” mentality so giving up wasn’t and isn’t part of my vocabulary. So I took the harder path of fighting my way back from financial disaster. My key decisions that helped me overcome my setback and succeed were as follows.

1. Do the hardest and most demanding loads because they pay the best

2. Run the maximum amount of miles I possibly could

3. Improve my equipment to lower my operating costs

4. Stay as tight fisted with my money as possible

While all those sound easy they can be very difficult to implement and stay committed to. I’ll take them one at a time.

Do the hardest and most demanding loads because they pay the best. For me this meant going back to LTL. To me LTL is some of the most aggravating freight there is especially with a refer. Fighting traffic to get all the pickups and deliveries completed on time, the unsavory atmosphere with most refrigerated freight shippers and receivers, the never ending “Wait” for the product and baby sitting the refer just to name a few. I point this out because I knew how much I hated it but it is what I knew had to be done to meet my self inflicted demand of “Never Fail.” So reached out to a broker I knew who specialized in refer LTL and I verified with my direct produce customer that he could buy produce and load me out of California. You know what, it worked too! To learn how to locate direct customers and find out more about customers in general read my posts “Trucking Customers – Vital for truck owners,” “Meeting Potential New Customers” and “Finding Customers that Need Trucks.”

Run the maximum amount of miles I possibly could. Along with recognizing the need to return to LTL freight I knew I had to maximizes my cash flow and profits. That meant keeping the left door closed and running as many miles as I possibly could. I knew what lane that meant I had to run. I gave up my modest Illinois to Florida and began LTL pickups in Indiana, Illinois and Iowa and delivering to cities throughout southern California. Then I chased produce up and down the coast with pickups and delivered it to Chicago. Yep, it worked as well!

Improve my equipment to lower my operating costs. This one takes the longest. My finances dictated what I could do and when I could do it. Bottom line is “Preventative” maintenance is vital. When you know something is going to need repairing, fix it on your terms not the truck or trailers terms! In doing so it won’t cost you as much money, down time or lost revenue. So even if you need to borrow or use plastic, always do preventative maintenance! When you can, make modifications to your equipment to lower your operating costs. If you look closely at the pictures there are a lot more changes than just the paint job to my 1999 International. I have a great post detailing many of the successful modifications and another post on how to save money on parts.

Stay as tight fisted with my money as possible. I have been accused of being a “tight wad” more times than I can count. I proudly ware it as a badge of honor! That may seem to contradict what I said about preventative maintenance when in actuality it goes hand in hand. Paying for something that cost a lot on your own terms is being frugal to the max. You are ensuring that even though it does cost a lot today, it is a small percent of the cost if you waited for it to be a disaster. Even though I wasn’t aware of my rear end issue, if I had, I could have gotten it fixed on my terms and not caused my financial crisis. So I learned two lessons from my first weeks owning a truck. First and most important, always have a financial back up plan and do better preventative maintenance.

As to my 3 assumptions to answer David’s question.

There is a truck payment. If you discover that your truck payment is simply unrealistic you do have an option. Purchase a truck that will be within your budget and sell your current truck. While that may sound harsh, it is the best and most financially sound option available to you. You can learn more about my truck choices and what I recommend in my posts “Choosing the Right Truck” and “Avoid the FMCSA ELD Mandate.”

There are no or few direct customers. Read the section above “Do the hardest and most demanding loads because they pay the best.”

Agents” or “Professionals” are being used for some or all compliance. In most all cases I have very little use for “Agents” or “Professionals” for most day to day compliance issues and in many other cases. I do my own IRP, IFTA, UCR, Canadian eManifest (yes, I go to Canada), MCS-150, Weight and Distance, Highway Use Tax, New York Highway Use Tax, Oregon Mileage Tax and everything I have failed to remember while typing. The reasons are simple. Once you do these for yourself you will become efficient (fast) at them, have a better understanding of your business and save in most cases thousands of dollars. All are a plus for you as a truck owner. If you’d like to learn more on how easy and low cost it is to get your own authority read my post “How to get an FMCSA Operating Authority.”

Last, choose an easy to use software to help you manage your money. I designed TruckBytes and continue to use it today with my own trucking company.

I hope my experiences and lessons have helped you know How to be Profitable Owning a Truck. If you have questions or would like for me to expand on anything I discussed in this post please let me know! I’m happy to accommodate.