QuestionQUESTION: I've been an 48 state owner/operator for over 2yrs. I'm recently getting my own authority,but before I leave the company I'm leased to, how do I set something up with customers and where would I look? I live in southern ca and would like to run to northern ca and back. Thank you for your time.
ANSWER: David, building up a customer base can be very time consuming even for a dedicated sales person. I'm assuming you will be driving so that will limit your time with decision makers at the shippers that may have the freight you want to handle. Having said that however you will want to use any contacts or knowledge you already have and start asking for leads and referrals. Keep networking. Ask other drivers who may have leads for you to follow up on. With the internet today you can usually research any company before you approach them so you will have an idea of what they ship. There are also guides to manufacturers by state that can usually be found in any library or on-line.
http://www.thomasnet.com/ is one source but there are others.
In the meantime you will probably need to rely on brokers or load boards to keep you loaded both directions. Even thogh brokers will take a piece of the action they eliminate the need to have a sales force and the administration of billing the customer. Just be sure to find 1 or 2 reputable brokers to deal with that will pay you promptly. It will take a mix of sources but as long as you deliver as promised you should have no problem finding loads.
Best of luck.
Jim.
---------- FOLLOW-UP ----------
QUESTION: Hi,Jim thanks again for your expertise. I used your information and found a shipper who will talk with me about lanes and rates,however how will I know my rates compare with other companies,I don't want to under bid and certainly don't want to over bid. Any tips or advice that will be helpful in this meeting would be greatly appreciated thanks again.
AnswerDavid, Pricing is part Science and part Art.
Step 1 is know your costs in detail.
Step 2 is market intelligence which is not always easy to come by.
You can always ask the customer what they are paying and some will tell while others want you to bid blind thinking they will get a lower rate. If your costs are similar to anyone else competing for the business your bids will be in the same ballpark if not identical. You can't really ask a broker since you are in the process of cutting out the middle man, but you can use similar runs that you have handled as an owner operator if you know what the paid. In the truckload market long haul lanes are usually quote in dollars and cents per mile plus an appropriate fuel surcharge, while short local moves are generally flat rated either including all fuel or plus a surcharge. Also you need to find out the customers expectations regarding response time, on time delivery, capacity to cover the loads he tenders, etc. For benchmarking rates there are several subscription websites that claim to offer average rates charged by lane. I have used www.truckloadrate.com. It's $30/month but might be good to get a start. Some obscure lanes may have only one sample so you have to use the data only as a guide.
In your first meeting I would try to avoid committing to a specific rate but use it as a fact finding meeting. Tell them you want to fully understand the exact requirements so you can provide the best possible price. Ask about a fuel surcharge if they have a preferred scale they want you to use. If you are forced into quoting on the spot and you know your costs you can offer up a minimal profit rate and ask to be given the chance to run a test load or two. This does two things. It lets you see first hand if there are any hidden surprises such as long delays at delivery, etc. It also gets your foot in the door and if you like the freight you can come back and offer to set the rate for a longer period. As you build rapport with the shipper they will often reveal more about what they don't like about their current carriers and maybe even the price you need to match to get more business. It's all about building relationships.
Hope this helps a little. Good luck.
