Five-Point Checklist for Aspiring Expediters
You're considering becoming an expediter to be your own boss, set your own schedule, see the country. Or, perhaps, you even dream of owning your own fleet of trucks in the future. Whatever your ambitions, the expedite business is just that -- a business -- and that involves both risks and rewards.
So, as you evaluate expedited trucking as a business opportunity, we've put together this 5-point checklist to help you look at the business with your "eyes wide open." This way, if you decide to move forward, you'll put yourself in the best position to reduce risks and maximize your potential rewards.
1. Lifestyle Considerations
Expedited trucking can be highly profitable, if you're smart about how you run your business. But there are also challenges, such as the periodic long wait times between loads. For some folks, that's no big deal. But if you don't plan and prepare financially for those downtimes, you'll be caught off guard by the uneven cash flow, which will put your business at risk.
You also need to consider that you'll be away from home for weeks at a time. And if you plan to operate as a team driver, you'll have to be comfortable with working in close spaces with a partner for long periods of time.
Is this a lifestyle you're willing to adapt to for the potential financial rewards? How can you know for sure?
Consider "test driving" the expediter life by driving for a fleet owner first. This real-world experience will be valuable in assessing whether you can succeed in the business before you make a major long-term investment in a truck. To find prospective fleet owners to drive for, consult with trucking carriers and network with other drivers to get connected with fleet owners who are looking for drivers.
2. Vehicle Selection
What type of expediting interests you the most?
If you're considering becoming an expedite owner-operator but not ready to take the plunge and invest six figures in a new straight truck, a lower risk option is an expedite van. You can get into a fully equipped van for under $70,000. And if it's rated under 10,001 gross vehicle weight, you can avoid many of the Department of Transportation (DOT) regulations, such as hours of service requirements, which add a lot of complexity and cost to your business.
But, with a van, your loads are limited to freight that can fit into a van -- such as auto parts, overnight packages, or medical supplies and equipment -- typically for shorter distance routes.
If you're looking for greater flexibility and a wider range of loads you can accept, then consider a paying the money for a Class-7 expediter straight truck with a sleeper. The first step in truck selection is to work with truck dealers that specialize in the expedite market. (To search expedite truck dealers and trucks online, Click Here.) This is because they have a finger on the pulse of the industry and have honed their truck specifications over the years to strike the optimal balance among key points, such as truck price, performance, fuel economy, longevity, and comfort.
A used expediter straight truck is another option to consider. The lower price of a used truck can help a new expediter get into the business sooner. However, the resale market for quality low-mileage used trucks is still tight. So, the challenge is finding an available used truck that will fit your budget and be reliable for your business. If you decide to go the used truck route, make sure it's equipped with a heavy-duty powertrain, complies with your carrier's requirements, and has been well maintained to minimize unpleasant surprises.
3. Solo vs. Team
More potential loads, higher pay rates, less impact from hours of service rules -- these are just a few advantages of team driving compared to going solo. But team driving isn't for anyone. And savvy solo expediters can still do very well for themselves financially.
How can you tell which is better for you? Keep these points in mind:
- Are you o.k. with sharing decision-making responsibilities (on which loads you accept and other business decisions) or do you prefer making your own decisions? This is the most critical question because if you don't like the idea of sharing decision-making, then a team setup is definitely not for you.
- Can you sleep well in a moving vehicle? An advantage for solo drivers is that they get to sleep in a non-moving vehicle. But experienced teams know how to help each other get quality sleep while the truck is still on the road. The key is for the driver to be considerate of the sleeping partner by operating the truck in a smooth manner, avoiding rapid acceleration, hard braking and rough lane changes.
- Are you comfortable with working with a partner for long stretches of time or do you prefer alone time and having your own space? Keep in mind that you're operating in very tight quarters with your partner for several weeks at a time. So, if you're planning to operate as a team, make sure you're a good fit. The expedite lifestyle can put a lot of stress on your team relationship, especially if you're not compatible in terms of personalities and goals.
4. Carrier Selection
If you're considering becoming an owner-operator, what should you consider in a trucking carrier to lease onto? Keep these 3 "C's" in mind.
Think about the carriers you're evaluating. What's the sense you get about their company culture? Is it an environment in which you think your business could thrive? Do you feel that you would be treated with honesty and respect? A carrier's reputation precedes them, so talk with other drivers to get candid feedback about their experiences with a carrier.
Who are the carrier's primary customers? Is the carrier locked into one industry, where its success (and yours) would be tied to the health of that market? Or does the carrier serve a wider range of industries? The answers to these questions will let you know if the company is going to be around for the long haul.
You want to know how you're going to get paid and when. Does the carrier pay by flat rate per loaded mile or percentage of revenue on each load?
It's not that one pay plan is inherently better than the other; it's that you want to at least understand how you're going to get paid so you can run numbers that compare the pay plans based on the specifics of your situation. This way, you can determine which plan would be most advantageous to you.
5. Contract Considerations
What should you know before you sign the lease contract with a carrier?
The first key is to know what to expect in a solid lease agreement. Refer to the Federal Motor Carrier Safety Administration (FMCSA) regulation part 376.12 on "Written Lease Agreements." This will give you an excellent overview of what must be (and cannot be) included in the contract for it to be compliant.
Then, as you review a carrier's contract, look for chargebacks, which are fees taken out of your pay to cover administrative fees, applicable insurance, and other charges. Your compensation package might look great at first glance. But unexpected, burdensome chargebacks could quickly eat away your profits. So, know what to expect with chargebacks and compare with other carriers before signing.
Also, the contract should outline precisely how much responsibility you have in terms of cargo claims and what the deductible will be. For expediters, deductibles typically range from $1,000 to $2,500.
Before you execute the contract, have an expert -- whether an attorney or someone at OOIDA -- review it for you to ensure there are no potential pitfalls that could put your financial future in jeopardy. (OOIDA offers a free service to its members to review owner-operator lease agreements. Click Here to learn more.)
The Bottom Line
Is the expedite life -- and business -- right for you? Use these 5 points to help you evaluate the potential risks and rewards, so you can make the best decision for you and your family.blog comments powered by Disqus