Taming the beast

| December 12, 2008

If you’re leased to a large carrier, you’ve likely done business with the government on the carrier’s authority. If you’re an independent, odds are you’ve run a brokered load from a Defense Logistics Agency depot or a piece of equipment to or from a fort or training center.

With some exceptions, government freight runs like any other freight. Hours-of-service regulations apply. The usual weight regulations are in effect. You’re often dealing with the same brokers. And, contrary to truck-stop myths, you’ll probably never see black-suited agents swoop down on unsuspecting cops who’ve dared pull over a truck en route to Fort Benning, Ga.

But there are differences in earning potential and entry hurdles, especially for military freight. For some, especially owner-operators with their own authority, significant profit in the military hauling sector has been out of reach in recent years. Leased owner-operators have fared best, as most of the business is scooped up by big carriers that can more easily meet the Department of Defense’s carrier registration requirements and offer rates that generally are lower than those for commercial freight.

Better rates for specialty haulers and teams pulling arms, ammunition and explosives are sometimes seen, but an independent would do well to have his own paper pushers and a truckload of patience to get top dollar.

All federal agencies have hauling opportunities, says Clark Hall, Landstar System’s vice president for government affairs. As a U.S. Army colonel, Hall was chief of staff at the Military Traffic Management Command, now the Surface Deployment and Distribution Command, or SDDC.

For instance, some Landstar owner-operators haul equipment for the U.S. Forest Service in emergency firefighting operations out West, Hall says. “They don’t call very often, but when they do, they really need us.”

The Pentagon, however, is the “big gorilla,” Hall says, and its rates run a wide gamut. Competition for general military freight, classified as FAK (freight of all kinds), is fierce among approved carriers and brokers, but some owner-operators take particular pride in dealing with the military. “Independent truckers are among the most patriotic of Americans out there today,” Hall says.

An independent owner-operator can contract directly under the present system. Joe Whitten of Hartselle, Ala., started his months-long approval process in 2001, during his free time from his factory job, after unsuccessfully trying to find loads in the private sector. The process was “very difficult,” Whitten says, but if the direct connecting opportunity wasn’t open, “it would just have been impossible for me to be in business now.”

After you’ve obtained your own operating authority, the first step in carrier approval is getting a Standard Carrier Alpha Code from the National Motor Freight Traffic Association (website). After that, you should get set up in the PowerTrack program with U.S. Bank, allowing for electronic payments within three days of each shipment.

Next is filling out the registration form. “Our process time is less than two days,” says Anthony Mayo, an SDDC traffic manager.

If a carrier is approved, it must meet a performance bond requirement, which is “definitely the biggest hurdle for a small operator,” says Paul Read, president of Allegheny Surety in Pittsburgh. The bond’s value depends on how many states you want to run Pentagon freight in. For the lower 48 it’s $100,000 for small operations; larger carriers and brokers pay significantly higher amounts for their drivers and clients to run in a smaller number of states.

The cost of the bond’s premium depends entirely on the owner-operator business. An independent owner-operator’s best chance at getting a multi-year bond is to have good credit and a stable business that’s been established for years, Read says. “A national outfit, a big operation, looking for a multiyear bond – they’re going to get it. With a lot of these smaller companies, the surety company is often not certain that these guys will even be around a year from now.”

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