Overlooked niches

Max Kvidera | August 01, 2010
Leo Wilkins specializes in hauling medium-duty truck bodies and highway construction safety equipment.

Advanced handling. Extra-heavy labor. Elaborate LTL logistics. Special hauls often require moreof an owner-operator than ordinary loads, but the financial rewards compensate well.

Dale Wiederholt used to haul what most truckers would consider ideal loads. His small Wisconsin-based fleet would pick up blanket-wrapped furniture from manufacturers in Southern California and deliver to warehouses from Colorado to the East Coast.

“We billed it on a percentage of the invoice,” he says. “We could make more money in one load going east than a lot of guys could make in a round trip.”

About four years ago, Chinese companies began shipping containers of similar furniture at a much cheaper cost to the United States. Within a year, the U.S. manufacturers were going out of business, and Wiederholt’s sweet hauls had turned sour.

Such niche hauls typically survive economic downturns, in part because they’re often built on a close relationship between shippers or brokers and carriers. Wiederholt’s, for example, lasted 15 years. In many cases, the hauls are less-than-truckload (LTL), made up of several smaller pickups. As a result, the logistics of assembling them frequently requires physical labor in all kinds of weather. Often, they’re tightly scheduled, or may require waiting out a tardy shipper.

“If it were easy, everyone would do it,” says Joe Rajkovacz, director of regulatory affairs at the Owner-Operator Independent Drivers Association and a former LTL hauler. For all the drawbacks, “the financial rewards are second to none” and the business is more consistent, he says. While many carriers either don’t want these hauls or don’t know about them, the operators who concentrate on them say they would do nothing else.


Where the loads are

To work in a leased niche operation, first identify the carriers. “The sweet spots are the smaller mid-size carriers of 25 to 150 trucks that specialize in a particular market,” Rajkovacz says. “If the large fleets stay away from it, that’s where you want to go.”

Joel McGinley, executive consultant at Internet Truckstop, says 60 percent of the hauls that live the longest on the Internet load board are loads of 40,000 pounds and more or that require specialized equipment such as a reefer or stepdeck. “They tend to pay decent, but the equipment just isn’t there to haul that freight,” he says. “You can get 10 to 25 percent more.”

David Schrader, senior vice president for freight services at TransCore, says all types of flatbed work have been in need of highly qualified drivers lately. “This should persist throughout the summer, and much lost capacity needs to be restored in this segment. The other type of loads would be regional short haul [200-350 miles]. Rates are high on this segment of traffic, even in markets like on the East Coast or parts of Texas that have overall freight deficits.”

Hauling agricultural equipment generally pays well and lasts most of the year, depending on the region. Same for anything that needs a specialized trailer or tanker. “There are so few of them that you can’t build your network around them unless you specialize in that area,” McGinley says.

Another source of good-paying loads that go begging for drivers is seasonal produce out of California, Texas, Arizona and Florida. During the prime summer months, that freight requires thousands of trucks.


Sweetener transporter

Wiederholt found out about his current run literally by accident. As a volunteer fireman in Hazel Green, Wis., he helped clean up after a collision between a tractor-trailer and a tanker truck. Afterward, he went to the paper mill that produced the material being hauled by the tanker to deliver news of the accident. When Wiederholt asked if the plant needed trucking help, he won the job. That was about eight years ago, and he’s been hauling from the plant ever since.

Today, Wiederholt Transportation operates eight tractors and 10 tankers. Most of the loads contain lignin, a liquid byproduct from wood pulp processing. Wiederholt tankers haul it 325 miles from northern Wisconsin to northern Illinois. Since lignin is a food grade product, the hatch on the tanker has to be secured and opened correctly, with tamper-detection seals applied at the mill.

“This works for me because of my location, because the road to the paper mill and plant pass by my front door,” Wiederholt says. “You also have to be in communication with the shipper and processor. Sometimes orders from the processor can change two or three times a day.”

Wiederholt says he’s paid by the load ton at a rate that’s comparable to what hauling general freight pays. Although he’s not getting rich with this specialized haul, he appreciates the consistency. “And we don’t have to work Saturday and Sunday,” he says.


Safety gear hauler

Leo Wilkins uses his 2006 stepdeck trailer to transport medium-duty truck chassis and safety equipment used in highway construction. While the truck hauling has waned, the safety gear transporting business takes most of his time, especially during warm weather.

Hauling petroleum is often overlooked by small independents, but it’s a profitable specialty for Michael Goldstein.

A trucker for 37 years and an owner-operator since 1983, Wilkins has specialized in hauling trucks and motor home chassis for most of his career. When he started as an owner-operator, he transported trucks for General Motors out of Pontiac, Mich., making up to $4 a mile. When that business dried up about four years ago, he leased to a carrier hauling trucks. He picked up his own authority two years ago and began hauling used trucks for dealers from auctions or other locations. One of those contacts led him to hauling the safety equipment, such as traffic cones and electronic directional signal trailers.

Wilkins says his loads require much more work than the average freight. He knows how to stack multiple trucks, deftly using ramps, wood blocks and chains. If an exhaust stack is too high to fit under overpasses, he might have to remove it.

He estimates he’s found 60 loads in the past six months through word of mouth. By picking up trucks for dealers at auctions, he saves them the expense of hiring a driver and avoiding the risk of something happening to the truck on the road.

“I charge more, but my customer says he doesn’t worry about me because I know what I’m doing,” Wilkins says. “I stay in contact with the shipper and receiver, so they know where I am and when they can expect me to arrive.”

Wilkins earns $2.50 a mile for hauling the safety equipment and $2-$3 a mile for transporting trucks.

“You’ve got to build a good work reputation,” Wilkins says. “You can charge a little more when you do that. I look at it this way: If I haul a load 1,000 miles that pays me $2,000 instead of one that pays $1,000, and I have to work a couple hours on one end and a couple hours on the other end, that’s $250 an hour.”


Petroleum transporter

Hauling petroleum was supposed to be a short-term job for Michael Goldstein. At first he was intimidated by dealing with a flammable, hazardous material. But after undergoing training, he found he liked the work.

He’s been hauling since 1999 and an owner-operator since 2005. As a leased contractor, Goldstein hauls gasoline, diesel and aviation fuel in California for MG Liquid Logistics Transport, which owns two trucks and has four leased operators. He doesn’t have a set schedule, but he’s home every night.

“Brokers will typically start calling us around 8 o’clock in the morning,” he says. “A lot of it depends on the market. If the price is going down 2 cents, they’ll hold out until the price changes and then the calls start coming in.”

Goldstein owns a daycab with a 20-foot tank permanently mounted, and he pulls a 28-foot tanker in addition. The truck tank holds 4,100 gallons of gasoline and 3,900 gallons of diesel, while the tanker holds 4,900 gallons of gas and 3,900 gallons of diesel.

His drives 250 to 350 miles on a typical day. He delivers to fuel stations, commercial facilities, trucking companies and farms in the Central Valley. Deliveries to stations in upscale residential areas are during the day, while hauls to car washes are made after hours.

“A lot of people contacting me on my Facebook page have no idea you can be an owner-operator in the petroleum industry,” says Goldstein. He earns 86 percent of gross revenue, usually clearing $60,000 to $65,000 a year. The typical petroleum trucker is a company driver, and those on hourly pay make $19 to $22 an hour, he estimates.

Nonetheless, Goldstein says the turnover is high. Many potential drivers wash out before completing training because it’s detailed and demands physical intensity. “It’s not for everyone,” he says.


Produce, cheese and sausage specialist

DuWayne Marshall specializes in LTL in both directions of his roundtrip from Wisconsin to California. Heading west he hauls mostly cheese and sausage, typically making six to 14 stops, the majority in California. After unloading, he begins his pickups of produce in the state and in Arizona for the return path.

DuWayne Marshall’s niche is hauling cheese and sausage west and backhauling California and Arizona produce.

“I have a broker who [arranges] loads for me going to California,” Marshall says. “The produce coming back is all my own deal. I have my own receiver [a chain of five grocery stores in Wisconsin] and a few brokers I use to fill in the empty spots. I literally go shopping for this guy.”

On one recent trip, Marshall started in Los Angeles, headed north to Salinas and Watsonville, drove to other produce areas near Fresno, turned south to Coachella and finally to Yuma, Ariz. “I started loading Wednesday at noon and made my final pickup at midnight Friday in Yuma. This time of year you’re picking up peaches, nectarines, strawberries and cherries. I had 1,029 miles of pickups,” he says. “The load paid $7,480 coming home.”

Other operators do similar LTL pickups of California wine. They stop for several cases at a time, Marshall says.

His strong earnings – $86,000 last year – allow him to drive a 2010 Kenworth T660 and a 2008 reefer with a sliding spread axle.

However, his specialty requires hard work. Occasionally, Marshall says, he has to load and unload with a pallet jack. Sometimes he has to stack products by hand to make everything fit in the trailer. Even with the reefer running, it’s hot in the summer with the trailer door open. The main reward is the superior pay.

Whether it’s the physical labor, multiple stops or trailer investment, Marshall believes his niche doesn’t appeal to big carriers or most operators. “I can’t compete with the big guys – I don’t have 5,000 trailers that I can drop,” he says. “I have to have something where I’m making money. It has to be something the big boys can’t or won’t do.”


Plant transporter

Bobby Lohmeier has been trucking for 35 years, 33 as an owner-operator. Transporting meat and cheese from Wisconsin to the West Coast and hauling house plants back to the Midwest, Lohmeier earns $2.20 to $2.40 a mile. He’s been running this business on his own since 2002.

“It’s high-paced and hard work, but I get paid very well for it,” he says. In addition to his rig, Lohmeier’s Strollin’ West business leases seven other contractors working in LTL.

He’s usually required to load and unload boxes of plants and individual plants in packing sleeves. On a typical run back to the Midwest, he’ll make between 10 and 15 stops.

“I have what I have because of the service I give,” Lohmeier says. “Most people try to get work on price, and that’s a problem with this industry.”

Part of his service is meeting deadlines. He runs a 2009 Volvo and 2008 reefer to help ensure he’s on time. “I keep newer equipment, because when you have specialized stuff, breakdowns are unacceptable,” he says. “Everything I do is time-sensitive. If you don’t deliver freight on time or have some specialty, you’re just another [trucker] out here.” n


For these opportunities: Go West

Joe Rajkovacz of the Owner-Operator Independent Drivers Association notes two potentially lucrative niches, but they’re clearly not for everyone.

OVERWEIGHT EXCEPTIONS. Operators used to hauling overweight loads might be able to tap into a niche in Great Plains and Rocky Mountain states. Many of these states are grandfathered in under federal size and weight rules, according to the Federal Highway Administration. For example, operators pulling a spread axle trailer can legally carry more than the 80,000-pound limit on interstate highways and other specified highways.

“If you’re pulling a spread axle trailer, say from Fargo, N.D., to Seattle, and you add an extra tag axle to your trailer, you can legally pull 92,000 pounds,” Rajkovacz says. “A lot of states you can run up and down the [road] with 86,000 pounds.”

PORT PAYOFF. A budding niche is permit loads bound for West Coast ports, such as Los Angeles and Long Beach. These loads often consist of heavy equipment for export or, more likely, for port use.

Haulers of these loads must meet stringent regulations imposed by the clean air-conscious California ports, including emissions restrictions. Rajkovacz recalls one operator who called to ask if his 1997 Kenworth truck was legal to enter the Port of Long Beach because he wanted to take on a permit load paying $12,000 that was posted on a load board. “I had to tell him he couldn’t go into the port [because of the age of his truck]. The permits would have cost about $1,800.”

Rajkovacz says the restrictions will create shortages of trucks that can serve those markets. He says rates are rising for loads designated for the ports because of a small pool of trucks that can qualify for the permits.

“You can’t simply drop the load and have it repowered the last five miles,” Rajkovacz says. “The permit covers going the entire distance to the port property with a specific truck and trailer pulling it.”


Regional rates differ

Where you haul can make a difference to your bottom line. Joel McGinley of Internet Truckstop says rates on loads leaving Midwest locations such as Illinois, Indiana, Missouri and Kentucky are likely to produce better rates.

Also, hauling to a specific market may pay better as well. Following is a comparison showing the spread of recent rates to specific cities from major shipping points, provided by David Schrader of TransCore:

• Miami to Jacksonville, Fla. – $1.33/mile. Miami to Atlanta – $1.03 for vans.

• Philadelphia to Norfolk, Va. – $2.04/mile. Philadelphia to Raleigh, N.C. – $1.28/mile.

• Atlanta to the Ohio River region – more than $2/mile for reefers. Atlanta to Chicago – $1.57/mile. 

(All rates include fuel and are without any accessorials, based on TransCore’s Truckload Rate Index – spot market.)

  • Marishka

    While I respect what all of you do, I find it hard to agree with the plant load hauler….to have your drivers run so hard that they have to do what you refer to as “creative logging” is not only wrong but illegal…..not to mention that the co-driver was not the holder of a CDL. How do you get by with that for so long?