End of week update

Well, it’s been a hectic week, but I’m up and running. Everything has gone smooth and I’m ready to get on the road. Just a few finishing touches on the truck and getting some personal affairs in order and I will be ready to roll!

I’ll post some more details later! I’m going to give the rig a nice wash today!

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Got my truck!

Well, I know I said I was going to update this again sooner, but I was busy. Got my new truck I was able to get it this morning. So I’ve been busy getting it ready. First things first, I had to get my stuff all moved in.

I’ve been moving everything into the truck and it’s been great so far. I’m just very excited to get started and I hope my authority comes in soon. I got the factoring all situated as you saw my last blog post, so that is all set. After that I should be ready to go. I’m going to sign up for the load boards and start calling some Brokers to hopefully get setup ahead of time.

Other than that, it’s all going good. I’m all set up financially now. Almost good to do.

Someone emailed me and asked a question, Which loadboard am I going to use?

Well, the answer is DAT. I like their interface the best, and most brokers are on the major load boards so it doesn’t really matter which one you choose. If I think it’s worth it in the future, I may truck truckstop or 123 loadboard. But hopefully I won’t have to. The goal is to get my own customers or build a solid relationship with some brokers.

I’m off to work on moving into the truck for now! Check back tomorrow!

Cashflow = Check!

Many new truckers use factoring to get their business off the ground. You may not have heard of it before, but it is pretty prominent in the business world. In fact, it is actually pretty popular in the trucking industry. I plan on using a factoring company to fund my trucking company in the beginning. I’ll start with a little background knowledge in case you don’t know what it is.

What is factoring

Factoring is the act of selling your invoices to a factoring company in exchange for instant funding (minus their fee). For example, say I bill a customer for a load that I hauled. After I send the invoice out, they will usually, pay in 30-60 days, though sometimes it can be even longer! This is difficult when starting out because trucking isn’t cheap. Factoring helps in this situation.

As soon as I deliver the load, I will send the signed bill of lading, load confirmation, and any other supporting documents to the factoring company. They will then determine if the load is factorable. If it is, they will send me the money within 24 hours in exchange for the invoice.

The fee that I was able to secure is 4% for non-recourse factoring. This basically means that I am not responsible if the customer does not end up paying the invoice later on down the road.

The 4% fee means that they keep 4% of the invoice total in exchange for factoring the load. If you still don’t follow, you can read some more about freight factoring here:

More about my factoring agreement

Like I said before, I went for nonrecourse factoring. It’s easier, and being a new company, it’s ideal. If a customer doesn’t pay, I don’t have to worry about it. The fee is a bit higher, but it’s well worth it in my opinion.

The company that I went with also offers “spot factoring”. This simply means that I am not bound by contract to factor a specific amount or all of my receivables. Again, the fee is a little higher for this, but it’s more flexible and better suited for my situation. They also have an online system and even an app that allow me to quickly and easily upload the documents. The process is streamlined and I can get my money quicker.

Hopefully I only need to factor for the first three months or so. The biggest problem that small trucking companies and owner operators have is cashflow. Many get into the trap of factoring their freight bills forever, and losing alot of money in the process.

That’s it for now about my factoring situation. I’ll hopefully be deciding on a truck this weekend. I may post once more before the end of the week, but if not, I’ll be updating when the truck is sorted out. Hopefully some pics too!

Got my authority, what’s next?

Well I’ve got some great news! My authority came in yesterday. I’ve been busy getting everything together, so I haven’t been able to update. Now I’m the the waiting period. My information is published in the FMCSA register for 14 days, and if no one objects to me having authority (I don’t think anyone will!) then I’ll be good to go. I also need to take care of my form MCS-90. This is sort of an insurance form that sounds confusing, but it’s not too bad. I used this form MCS-90 guide to help me do it.

That means I have to hustle to find a truck, and I have been. I’ve narrowed it down to two peterbilts, and I am going to take a look at one of them for a second time tomorrow. After that, I’ll make a decision by the weekend. Hopefully it only takes a week or two to actually get the truck, and that should work out well. After that, it’s off to the races.

So what else is required?

I need to do a few more things before I’m actually up and running. They are:

  • Get a trailer!
  • Figure out the financials (factoring company)
  • Get setup on the loadboards
  • Call a few brokers and see if they’ll set me up ahead of time so I’m ready to go.

I’ll go over them all.

Getting a trailer

This shouldn’t be too difficult. There is a dealer in town that has about a dozen used reefer trailers available. most of them are in the condition and price range that I am looking for, so I have plenty of selection. I’m planning on paying cash for it, because the bank gave me a better financing rate on the truck than they would have on the trailer. It only made sense.

Financials

I’m in the process of figuring out the financials. I should be set up with a factoring company by the end of today, I’m going to write more about it later. If you don’t know what factoring is, check out that article. It’s a pretty interesting service.

loadboards

I’ll need help finding freight! That’s where the loadboards come in play. I’m going to start with DAT, just because I like their user interface. The other big one is truckstop, but most brokers are on both. I’ll evaluate later on if I think it’s worth it so sign up for both.

Brokers

The best situation would be to have some good relationships with brokers that have high paying freight for me to haul. Most of the good stuff never makes it to the loadboards. Some are hesitant to work with new carriers, but I have a few connections and relationships that I am going to reach out to. Ideally I’d like to get to the point where I don’t even need a loadboard subscription!

That’s it for now. I’m off to work more on securing the right factoring company. Check later for that story.

Why did I choose reefer trucking?

Why did I choose reefer trucking?

So I had someone ask me at a truck stop once, why reefer? Well I’m sure that some of your guys are wondering too.

Well the best part of hauling refrigerated is the money. It’s the highest paying trucking out of the three big ones. Those three big ones are Dry van, flatbed, and Reefer of course. The runs are usually shorter too, which is what I like. Something different every few days is a nice adventure.

I’ve found that the refrigerated freight shippers are also a bit nicer than dry van. Flatbed shippers are the all time best though. They understand the process of tarping and what you have to go through as a flatbed driver.

Speaking of shippers, if you’ve got a load of produce on your truck, they will unload you quick. Forget about it with dry van. They may make you site all day if you are a few minutes late for your appointment. Not the case when you have a truckload of bananas that will go bad.

The downfall though, is the cost of getting up and running. Since I’m going owner operator (in the process), I’ve got to buy my own trailer in addition to my truck. And reefer trailers are not cheap. The one’s I’m looking at are around $35,000-$40,000. Forget about a new one, those are almost $50k!reefer

Insurance also costs more because the freight is more prone to damage (i.e. spoilage). I also have to factor in the extra cost of reefer fuel, though that isn’t a huge difference. But what is different, is the maintenance of the actual reefer unit itself. You’ve really gotta take care of it, because if it goes bad while you’ve got a load your hauling, it can mean disaster. That’s what insurance is for, but you’ve gotta factor that you will probably lose that customer. If it’s a broker they may not ever offer your any freight again.

Thanks for reading a little bit about my reefer trucking insight!

What about the rig?

So the million dollar question. What kinda truck am I gonna buy? Well, if anyone knows me well, they already know. I’m looking at a Peterbilt 379 of course. Not a specific one yet, but that’s the model I want.

It’s a classic. Looks great going down the road. Nothing better than it. I’ve narrowed it down to about three of them, and I am shopping in the $70,000 range so I have some choices. The three I am looking at are all located within 400 miles of me, so it’s not too bad if I decide to purchase one. I should be able to pick up whichever one I buy over the course of the weekend.

Either way, I’m getting antsy. And I want to make sure I have a truck ready to go as soon as I get my authority.

Here’s a pic of a 379 in case you didn’t know. (Not one of the one’s I’m looking at, just a photo from the internet).

 

 

pete-truck
Peterbilt 379 I found on the web. God they are good looking rigs!!!

 

What is MC authority?

Howdy! So the first step to becoming an owner operator is to get your MC authority. What is that you may ask? Good questions. MC stands for Motor Carrier. That is me, the trucker. The government agency that oversees truck drivers and carriers is the FMCSA. Now that’s a big acronym. It stands for Federal Motor Carrier Safety Administration.

MC Authority is your permission to haul freight for others (your shippers) for profit. This is to ensure that you are complying with all laws and regulations. It’s actually pretty easy to register. It’s all done online nowadays through the FMCSA website. The fees aren’t too bad either. $300 to become a registered carrier.

I’ve heard that the application isn’t too difficult, and actually isn’t too long. Regardless, I made sure to set aside a couple hours to do it. I was pleasantly surprised though. It actually only took me about a half hour to do it! I can imagine it was much harder in the old days when you had to fill out the paperwork by hand. Yuck.

Anyway, now I just need to wait. In a few weeks I’ll get a letter telling me that I have been “approved”. I say that in quotes, because it doesn’t mean all is done. After that happens, My name and information gets published in a register on the FMCSA website. This is for 14 days I believe, and the reason for this is to make records public so anyone that may have an issue with me getting MC authority can speak up. This is due to many scammers and shady folks going around causing trouble, then just registering another MC # and doing it over and over again. This way, people can recognize your name and possible submit an objection to getting your authority.

So that’s that. I actually applied about 16 days ago now, so I should get the letter any day. For now, thanks for reading!