Manual for a downturn: How to keep your operation above water.

| May 27, 2009

But when you’re using sound business practices and still having trouble making ends meet, it can be wise to seek a new work arrangement.

Explore seasonal and local opportunities
Opportunities other than typical long-haul can often pay off big for independents, says Chris Brady of Commercial Motor Vehicle Consulting.

“Look at a commodity that is available at a particular time of the year, because you know that a shipper will pay extra,” Brady says. “It’s almost like hauling some particular vegetables or fruit out of an area at a particular time.”

Seasonal spikes in demand in certain areas can be wellsprings of good rates. Kurt Brown, running on his own authority out of Knoxville, Tenn., was banking on a side kit for one of his flatbeds to pull him out of the abysmal rates he saw on load boards in February for flatbed commodities. “Nursery season is upon us,” he says, which means a likely high volume of loads coming out of McMinnville in east central Tennessee.

Preston Greer, president of McMinnville-based specialized nursery freight broker Greer Transportation, says to keep in mind that the downturn affected seasonal businesses, too. “The nursery business follows the building industry,” he says of his own.

Consider other brokers
“If you’ve been using just one broker, expand out to several,” advises Brady. Utilizing Internet load boards such as Internet Truckstop and provides high-volume, efficient ways to get loads.

For owner-operators dealing with brokers, Spencer stresses “not only checking to see whether a broker is properly registered with FMCSA and has a bond on file, but making sure you check their credit rating.” Rating services like Redbook and RTS Credit take reports from carriers about freight brokerages, producing an overall rating.

Even though rates have deteriorated, freight broker Greer notes that the shrinking economy has improved his own appreciation of the needs of his owner-operator clients. “I’ve had to adjust my business to help guys get to where they can get a load back to be profitable,” Greer says.

Market yourself directly
The cost of changing carriers is high, but the cost of changing business segments is higher, especially when it means spending $30,000 to $50,000 for a specialized trailer. Sometimes a better choice, particularly for independents, is to step up self-promotion to current and potential shippers and brokers.

OOIDA’s Spencer notes a drawback. “Oftentimes, when freight is really terrible, it isn’t especially productive for small carriers to call shippers direct that they haven’t done business with before – the theory being, ‘I’m going to avoid the middleman.’ Even if you offer the shipper a lower rate, they still don’t use you because they’re unsure of the level of service.”

An operator’s best marketing approach today, Spencer says, might be “to develop a relationship with a shipper that they’re already servicing in one way or another – either because they’re leased through a carrier or they got that load through a broker … The shipper actually sees that you are the service provider.”

Show commitment to your customer

St. Pete Beach, Fla., owner-operator Joe Cicciaro relies on an account he’s had for four years, hauling Texas beef to Florida and delivering tomatoes in season to San Antonio. In late summer and fall, he’ll spend five to six months hauling produce from California into Texas.

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