It is no secret that when I set out to run on my own authority, I did so without a single customer in my back pocket and ran like most do in that situation, by hauling spot freight off of a load board. Though some operators I know in the OTR markets are satisfied running in this manner, I knew it was not a way to build lasting success in the fiercely competitive market that is local and short haul SoCal freight. The drastic seasonal distance between the peaks and valleys in both truck-to-load volume and seasonal rate fluctuations, quickly led me to believe that if I was going to build a fleet from my one truck operation, that I would need to find a way to secure consistency and proper balance in my freight mixture.
The key to finding the “sweet spot” in my freight balance formula came during a conversation with fellow Team Run Smart Pro Henry Albert years ago, just a couple months after starting my own authority, while sitting down at “The Press Box” after one of the show days at The Great American Truck Show in Dallas. He advised me to not put all my “freight eggs” in one basket and make sure I rank my customers as A, B, and C according to what they each bring to my “freight table”. Everyone’s lists will differ according to what their preferences in freight are, but since my start as an independent carrier and throughout building a small fleet, I have grouped my customers accordingly:
- A Customers: Direct freight customers make up a mere 5% of what we haul, but usually have slightly better rates than our B & C customers. They carry the added trouble of having to arrange our own appointment times in most cases, but we have some great direct customers that are pretty easy to schedule with.
- B Customers: Making up approximately 75% of my overall freight mix, this category is where I place consistent brokered freight that does not hit the load board. These are relationships that usually started out as load board freight and turned into weekly or monthly hauls by virtue of proven reliability and communication and are all offered to me exclusively. All of these loads provide a good year-round, non-fluctuating haul rate. Many of these brokers are also willing to work with their shippers and receivers to tailor these appointment times to out needs, since they know it will be the same carrier each time.
- C Customers: Making up the remaining 20% of the mix are what would be considered true spot freight. These are offered on loadboards such as DAT, Truckstop, Convoy, Uber Freight and many others like them. Though I now have direct account managers that I contact at specific brokerages when I see one that fits the bill of what we need, these loads act as pure filler loads for the void left when A & B customers get put into the schedule each week.
You may never meet a bigger believer than me when it comes to preaching that relationships and communication are probably the two most valuable things to have when building a business in this industry. This is not to say that I haven’t been undercut on rates before and that everything I negotiate goes like clockwork. I have built multi-year relationships with the freight I currently haul, only after having gone through some that did not stand the test of time. Though some may prefer their percentages to be on opposite ends of the spectrum, this is where I have found myself comfortable and has proven to be a viable mix for years now in my operation. Percentages can also change within your own individual mix, as mine were not always laid out in this manner and have shifted slightly from one customer type to another depending on my fleet needs. The important part is to know where your mix needs to be and make sure not to neglect any of the three categories and possibly upset the balance.