Get a load on

| December 12, 2008

In addition to data about specific loads, the bigger matching websites provide critical information about broker credit ratings and average payment speed.

BY MAX KVIDERA
Rigoberto Chavez was working the phones and eyeing the load-board monitor in the small room behind the TV theater at a truck stop east of Seattle. He was hoping for a load paying at least $1.80 a mile, but after several conversations with brokers and a final search of the load board, he settled for a load paying $1.35 a mile to El Paso, Texas.

“There were plenty of loads, but many of them were only paying a dollar a mile,” says Chavez, a 13-year owner-operator from Monrovia, Calif. “That would just cover my diesel.”

Veteran owner-operator Beverly Smith, meanwhile, sat at home in Meherrin, Va., trying unsuccessfully to find a load paying at least $3 a mile. But he wasn’t discouraged. “I received eight calls from brokers this morning, and my trucks are posted on the load board,” he said.

Chavez and Smith represent the full spectrum of owner-operator dependence on load-matching services. Chavez uses load boards about three times per week to cover occasional backhauls, he says. Smith, on the other hand, relies almost exclusively on a single board to find hauls in Maryland, North Carolina and Virginia that will get him back home most nights.

Load-matching services have become an essential tool for many owner-operators in recent years. For operators who don’t have dedicated runs and want to cut down on deadhead miles, online load boards save time by opening a window to hundreds of thousands of hauls through thousands of brokers. The most popular sites provide not just pertinent load data but information that helps owner-operators evaluate new brokers, such as broker credit ratings and average payment speed. Some even help calculate whether a prospective load will be profitable.

“Basically, a load board is an advertising vehicle,” says David Schrader, TransCore senior vice president for freight services. “If you have a load and are looking for capacity, or you’re an owner-operator looking for a load, it’s an efficient vehicle for advertising your availability or your desire for a given business.”

The system’s efficiency can be offset by having to deal with unknown brokers who usually have the upper hand because of their arrangements with shippers. Plus, some shipments posted on load boards may be low-paying or outdated.

“Load matching works in the spot market or with cheap freight, such as hauling wood chips, where the shippers can’t afford to pay more than fuel to haul it,” says David Owen, president of the National Association of Small Trucking Companies. “If a shipper has decent freight, they don’t need load matching or a broker.”

Load boards have been around for about 20 years. In the early days, carriers phoned for load leads and received faxes on what was available. As the Internet developed, load posting proliferated online. Now fewer than 10 percent, such as Smith, still phone load-board call centers during searches.

Some load matching services have come and gone. Today, the industry is dominated by three: Getloaded, Internet Truckstop and TransCore’s 3sixty Freight Match powered by DAT. They account for about 95 percent of the market, says Doug Moscrip, chief operations officer of Internet Truckstop.

Monthly subscriptions start at $20 to $35 for basic unlimited load- and lane-searching services and can run up to $125 or more, depending on specialized needs or optional services, such as detailed credit reports, trip routing and fuel price information. If you don’t use a computer, you can dial a service’s call center, give details of the load you want and receive a call or fax with loads that match your request. All the leading load posting companies provide similar services, Schrader says. One feature of TransCore’s 3sixty is 1,200 monitors in truck stops displaying load information.

Other than listing loads, a load board’s primary service to owner-operators is providing access to brokers’ credit data. While load boards don’t guarantee that you will get paid, they do provide tools for checking a broker’s background. All the services provide a form of credit rating, whether from a rating service or internally generated. Other resources for checking brokers’ creditworthiness include the Gold Book of Transportation Brokers. NASTC provides members its Best Brokers List of those with excellent credit ratings and a prompt payment history.

You don’t even need a load-matching service to dig into a broker’s history, says David Dwinell, owner of Loadtraining.com. “Truckers should check fmcsa.dot.gov, plug in the MC number and find out the complete history” of any broker, he says. “If you’re going to truck without information, you’re doomed.”

The importance of broker credit information is underappreciated among some owner-operators. According to the Overdrive Owner-Operator Market Behavior Report, nearly 60 percent of owner-operators perform no background checks before they deal with a broker.

“It’s important to understand the credit score and how quickly brokers pay,” Schrader says. “Cash flow is king with small businesses. If it’s going to take you 60 days to get paid, that could be a problem.”

Check a broker’s references and go online to a message board to ask other operators for their experiences with that broker or freight holder, says Bryan Jones, president of Getloaded. “If it’s your first time dealing with a broker, get a feel for his company, find out who the principals are to make sure you’re working with a legitimate operation that runs an ethical operation,” he says. “It may not take that much time, because we provide credit scores and days-to-pay scores. If you don’t feel comfortable after checking those things out, you should stop right there.”

An important feature of any service is security, says Moscrip, whose service screens both brokers and carriers for scams and other illegal activities. A few brokers run a scam, fold their business when detected and then start a new one, he says. “We reject probably one out of seven applications we get among brokers and truckers,” he says.

If you’re going to use a load-matching service, start early. “Use load boards to look at the market well in advance of accepting freight,” Dwinell says. “The biggest issue with truckers is they know up to a week in advance when they’re going to be empty. A trucker should post the availability of his truck as far in advance as possible. Before you leave home, you should post.”

That’s especially true if you’re going to be in a market that’s new to you, Schrader says. “Are you operating in an area or lane where you are one of a hundred carriers?” he says. “If so, you’re less likely to get a good rate. But if you’re in an area with a lot of freight and little competition, you’ll do better. It’s supply and demand.”

You’ll also fare better if you know your cost per mile. Rising fuel costs make it harder to pinpoint your break-even point, but knowing what you need will help prevent signing up for a losing load. “Know what your costs are and what the going rate is in that lane,” Schrader says. “If you don’t, you could price yourself out of the market, or you could be leaving money on the table.”

In dealing with brokers, don’t be bashful about negotiating. Always make a counter offer of 15 to 20 percent higher than what the broker proposes, says Dwinell, who advises owner-operators to become brokers themselves. “When freight rates next year are double what they are now, counter with 30 percent more and tell the broker to take the counter to the shipper,” he says.

Smith knows the rate he needs before he calls on a load and makes a counter offer if he doesn’t hear the rate he wants. “Some brokers say I’m foolish asking for that rate, and I say they are foolish to ask me to haul for that rate,” he says.

Smith and Chavez say they are more successful when they deal with brokers they know. If you have established a relationship with a broker, you’re more likely to get a fair rate.

“I call them, or they call me,” Chavez says. “I want to negotiate with people I know.”


Loadless in Seattle
Connelly Whitehead of Miami had been in North Bend, Wash., just east of Seattle, for five days, searching for a load to Texas or Florida at $1.30 a mile. He figured it was his longest wait for freight since leasing to Landstar more than three years ago.

Whitehead used his laptop to keep checking the proprietary Landstar board and made about 10 calls per day chasing down loads. He called brokers about hauls advertising less than $1.30 in hopes he could negotiate a higher rate.

“Some of the loads were posted at $1 a mile,” he says. “I have to buy fuel at $5 a gallon. At a dollar a mile, I’ll be financing their load and getting nothing.”

Whitehead says he always gets paid working through Landstar, but occasionally the amount he receives is different from the terms the broker promised. When he picks up the load from the customer, the rate usually is not on the paperwork. “When I make delivery and get the final settlement,” he says, “that’s when I find out how true the broker-agent was with me.”

An owner-operator for 10 years, Whitehead usually works with about five brokers with whom he’s developed good relationships. Some brokers, he says, like to play games with operators to ensure they have carriers available.

One gambit among agents who want to “hold” your truck, Whitehead says, is to post a “ghost” load that doesn’t exist. When a trucker calls, the broker says the load will be ready later that night. The delaying tactic continues until the load is ready for pickup.

Knowing how to read a load board helps, Whitehead says. “I’ve used some of these agents, but only if they say the load is ready.”

Whitehead ended up spending two more days to land a satisfactory load, but he believed the week’s wait was worth it. He delivered materials for a trade show exhibit to downtown Los Angeles, paying $3.67 per mile. “It was one of the better paying loads I’ve had in a while,” he says.


Don’t let a broker break you
Many owner-operators believe they’ve been stiffed by at least one broker. To help protect yourself in dealings with brokers, follow these tips from the Owner-Operator Independent Drivers Association:

  • Check at least three references. These should be carriers that have hauled for this broker consistently for at least one year.

  • Don’t move until you have a signed rate confirmation. Make sure it covers any additional charges you may incur, such as lumper fees or detention time. Include a surcharge to compensate for rapidly changing fuel costs.
  • Use caution when asked to sign a broker/carrier agreement. Avoid it if possible. Under no circumstance is the broker acting as your agent, nor are you acting as the broker’s agent. If the broker/carrier agreement does not say this, write it in, initial it and date the change.
  • Make sure all information is correct on the paperwork you receive pertaining to the load. You need the correct broker name, correct bond information and so on.
  • Never wait for payment past your agreed-upon payment date. The Federal Motor Carrier Safety Administration requires a broker surety bond of only $10,000, which does not take long to exhaust if the broker has several clients.
  • Anytime there is a change while you are en route that concerns your pay, get an amended confirmation before proceeding.
  • When hauling government loads, make sure you call ahead for delivery time verification.
  • Take steps to ensure the broker is paying you the rate that was agreed upon. Get it in writing.

Load-board roulette
Your success using load boards may depend on the time of year, where you’re operating and national economic conditions.

Freight matching is seasonal, says Doug Moscrip of Internet Truckstop. Traffic generally reaches a high point in late spring and summer, slows down and then surges in the fall. During the winter, freight movement slows down, reaching a low point after Christmas, he says. David Schrader of TransCore says daily volume on his site varies from 250,000 hauls in the winter to more than 500,000 in the summer.

Load volume has picked up since 2007. Moscrip estimates his site has four times the loads listed this summer compared with a year ago. “Last year, we lost quite a few truckers,” he says. “Now trucks are at a premium.”

Bryan Jones of Getloaded says freight volume has almost doubled in recent months, although he suspects that some shippers are putting out only a small share of their loads to test rates in the market.

Among truckers, some markets have a reputation for low-paying loads. Western cities such as Denver and Phoenix, for example, commonly are cited as places with too many carriers and not enough hauls.

Finding profitable loads also becomes more elusive in a slowing economy where fuel prices are climbing. “Any time you’re operating in a spot market with fuel as volatile as it is, you’re subject to being trapped hauling somebody’s load and not making any money at it,” says David Owen of the National Association of Small Trucking Companies.


Resources
Getloaded.com
www.getloaded.com
(888) 565-3921

InternetTruckstop
www.truckstop.com
(800) 203-2540

TransCore 3sixty
3sixty.transcore.com
(800) 551-8847

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