Direct Contract Freight or Spot Freight?

Discussion in 'Ask An Owner Operator' started by truckingrookie82, Feb 19, 2016.

How much of your freight is spot or direct?

  1. 100% Spot - 0% Direct

    47.4%
  2. 75% Spot - 25% Direct

    5.3%
  3. 50% Spot - 50% Direct

    10.5%
  4. 25% Spot - 75% Direct

    26.3%
  5. 0% Spot - 100% Direct

    10.5%
  1. truckingrookie82

    truckingrookie82 Bobtail Member

    4
    1
    Feb 19, 2016
    Atlanta, GA
    0
    Hey guys,

    I've been a silent reader for a while but finally have my first question -- I hope you can help me out :)

    I got my own authority in October and have so far only been working with a handful of brokers in the spot market... mainly through the DAT. I met a few drivers who told me that they are getting better deals when they work directly with shippers.... but so far I thought that's mainly for the big carrier companies. Can we owner ops compete with them? Before I go down that path, I would love to get a sense how much of your freight is direct from shippers and how much is day-to-day in the spot market.

    Also, it would be really helpful if you could share some of the reasons why you prefer direct freight vs spot..or vice versa (and which one gets you more $$$). I love the idea of knowing how much money I can expect to earn in every given month, but am afraid to commit to a shipper that turns out to be unreliable :oops:... so any thoughts you have will be very much appreciated!

    Thank you!!!!!!!!

    Carol
     
    Last edited: Feb 19, 2016
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  3. Oscar the KW

    Oscar the KW Going Tarpless

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    May 19, 2011
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    A one truck operation should NEVER try to compete with large carriers. You can't compete with them on their level, you have one truck and they have hundreds or thousands. Where they can't compete with YOU is service.

    Get your own customers, yes the little one truck operations like you, me, and many others on here can do that, its not just for the big guys.
     
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  4. o/otony

    o/otony Light Load Member

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    49
    Dec 25, 2012
    0
    all mine is direct from shipper, i have never dealt with a broker.
     
  5. jn1427

    jn1427 Light Load Member

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    Dec 8, 2014
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    Flipflops has some great advice on here concerning this very thing and he tells you how to get your own shippers.
     
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  6. truckingrookie82

    truckingrookie82 Bobtail Member

    4
    1
    Feb 19, 2016
    Atlanta, GA
    0
    Thank you so much! This has been super helpful!!!!

    What exactly makes it so hard for us to compete with the large carriers? I understand that they have many more trucks than we do and can therefore take on larger contracts. But what about price? Are we able to compete with them on price, because we have less overhead? Or do they beat us on price because they buy fuel, insurance, trailers etc. in bulk?
     
  7. scottlav46

    scottlav46 Road Train Member

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    Jun 18, 2015
    Escanaba, MI
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    It's pretty basic, really. You have one truck to make your money. You need to net a buck a mile (or whatever) to earn your living, so your per-mile rate has to reflect that. The big company (and these are just random, illustrative numbers) has 1000 trucks netting a dime a mile. Or whatever. Economies of scale. What you said, too. Bulk buying. It all plays in. Oscars advice above is spot on, forget about competing with price and focus on service. Make it your every waking thought.
     
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  8. Oscar the KW

    Oscar the KW Going Tarpless

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    May 19, 2011
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    You cannot compete with them on price, they can run a small percentage of their fleet at break even, or even at a loss. But they then can run the larger percentage of their fleet at a profit and overall for the miles driven for the entire fleet they can still make money. A small 1 truck carrier cannot do that, you run at a loss or break even for a day and you cannot make that up like they can.

    Big carriers need volume to survive, we don't. Large shippers need large carriers, as they have a large volume of freight to move, and the large carriers have the trucks to move it. So trying to go after the same freight that a large carrier is pulling is typically pointless. What you want to go after is the small shippers, these people are most often shopping for service, not price.
     
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  9. Old Man

    Old Man Road Train Member

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    13,469
    Apr 3, 2009
    Oklahoma City, OK
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    Most of the big boys have 3 trailers for every truck. You can't afford to spot trailers at all your customers.
     
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  10. truckingrookie82

    truckingrookie82 Bobtail Member

    4
    1
    Feb 19, 2016
    Atlanta, GA
    0
    Thanks so much - this was really helpful advice!
     
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  11. stayinback

    stayinback Road Train Member

    3,911
    8,255
    Jan 24, 2014
    chicago,il
    0
    Very Good advice from the folks above Carol..........

    Concentrate on a niche, A particular Lane traffic point..(aka your outbound/inbound moves)

    SERVICE is your #1 tool..DON"T EVER FORGET THAT! Service your customer(s) No matter what
    If you want success..Excuses will not work, Zero excuses, And top notch service.

    And Lastly..Don't let anyone in the industry try bringing you down with negativity....probably the number 1 worst thing in the business..Others want you to suffer....Sad, But very true.
     
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