How to Become an O/O: Should you specialize?

frieght pixFor the past seven years, Rusty Wade has specialized as a commercial moving operator, following more than 30 years hauling general freight, first as a company driver and then as an independent.
 Wade says he knows which he prefers. “Going down the road with general freight, I might be making $0.95 to $1 a mile plus a fuel surcharge if I’m lucky,” he says. Speaking in November, though, he was under a commercial load that “was $1.80 a mile out of Florida, one of the worst places to get a load. I’ll get a load out of my destination that will book at about $2.20 a mile.”
Wade, who’s been an owner-operator since 1999, has found a lucrative niche transporting loads such as trade show displays, museum pieces and a stainless steel kitchen for a new restaurant in his Pigasus LLC moving van-like trailer outfitted with furniture wraps and a urethane-sealed floor.

In a good economy, Kevin Koorenny would prefer to specialize, but in this recessionary market, the Redlands, Calif., owner-operator is hauling general freight if the rates are high enough. A specialty customer has reduced shipments, and Koorenny has cut his rate to keep the business. “Things are so iffy and scary that I can’t lock myself in,” says Koorenny, who carries $250,000 in specialized cargo insurance. “If you specialize right now, it’s not good. Before, it was good to specialize.”

Chris Harrington, an ATBS business consultant, says this is a tough time for a novice operator to jump into specialty work that requires experience, such as heavy and oversize hauling. Some specialty operations have been reduced as customers have cut back because of the poor economy.

When conditions return to normal and you want to specialize, Harrington recommends a self-assessment. One major question: Are you willing to do the work involved in a specialty? “You can make more money in flatbed, more in reefer and more in tanker work than you can in dry van, because in dry van you usually don’t have to do much — it’s often no-touch,” he says.

You also should determine a specialty’s freight cycles, Harrington says. Flatbeds are generally busier from May to September as construction heats up, while reefers and dry van activity might peak in the fourth quarter to meet holiday retail business.

With a flatbed, you face strapping, tarping and securing loads in all kinds of weather. It’s physically demanding, and you risk injury if you slip or fall from your trailer or get blown off. “In our industry, we talk probably once a month with someone who fell off a load and broke something,” Harrington says.

In refrigerated work, you might get involved in hands-on activity, especially if you are hauling mixed frozen and refrigerated loads. If you desire to haul produce, you might face driving in different regions as seasonal harvests change. You might be able to temper that by leasing on to a large carrier that has contracts to haul items such as frozen meat or camera film to offset slow seasons in certain areas, Harrington says.

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With a tanker outfit, drivers will have to invest a few thousand dollars in a “wet kit,” “wetline kit” or hydraulic kit to lift, drain, dump and rinse out equipment.

Industrial movers, such as Wade, sometimes are a “pad wrap division” of household movers. They specialize in moving products such as computers and televisions, expensive items like artwork and trade show equipment.

The pay is higher, though you are required to have more costly insurance to cover cargo value, and you may be better off having your own specialized trailer with a temperature or humidity-controlled environment. The pace is frequently more leisurely, though you may be forced to wait until the show is over to pack up and move on.

Depending on the carrier, you will have to have a few years of on-road experience.

While general freight is typically at the bottom of the pay scale, the work imposes fewer demands on the operator. That may be ideal for the contractor who just wants to drive without having to do much loading and unloading. “It’s fewer headaches and easier work for operators who might want to avoid a challenge,” Harrington says.

For Wade, the rewards of specializing go beyond money. When hauling general freight, he often encountered surly warehouse clerks and places where restroom facilities were off-limits to drivers. Now, he says, he often works with shippers who are happy to see him. “One even brings me a cup of coffee when it’s time to unload,” he says.

Kevin Koorenny tries to haul specialized loads with a preferred customer but turns to hauling general freight if the rates are high enough. Kevin Koorenny tries to haul specialized loads with a preferred customer but turns to hauling general freight if the rates are high enough.

Analyzing the pros and cons of specialized and general freight is key to your business’ success

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