Freight Guru Podcast Ep.1
The current state of the Spot Market in Q1 2021
The goal of the Freight Guru Podcast is to educate and inform the trucking community. We want to grow industry knowledge by trying out new techniques and sharing our successes and failures with the broader community.
Today we are focused on the five major markets of Florida, Washington, Ohio, New York, and Texas. After following our advice, you should be able to answer, “If I have a truck in any of these states, where should I be moving that truck?” The way we are going to help you answer that is by making sure you focus on round trip profits.
Moving freight out of Florida is rarely profitable. As a result of this, you need to be mindful of your destination. That is so you can turn a profit by going somewhere with higher rates.
Each company’s cost per mile is different. For us, we lease trucks because it offers more stable expenses. The reason being is if a truck breaks-down, you do not end with a large bill out of the blue. Leasing also makes it possible to continually run a new fleet, which is better for drivers.
We highly recommend leasing from Ryder or Penske and have a full-service lease, which allows us to have stable costs that are easier to plan around. We also recommend having ties to multiple leasing companies because it gives you leverage in your negotiations.
Our recommendation for a load board is DAT. They are an online load board. In today’s day and age, FTL is almost entirely digital. That is in contrast with last and first mile operations.
We use a trucking method called The Triangle, which we believe is the key to successful trucking in the United States. The Chicago Bulls successfully used the triangular strategy in the 90s. You want to set it up such that you have a backhaul market leg and a very lucrative leg. You want to work your drivers on the same consistent lanes to optimize The Triangle.
Familiarity is necessary for compliance, and compliance is essential for survival. We believe compliance is by far the most vital trucking principle. Having drivers run the same routes means they will not be unprepared. They will be able to anticipate parking, roads, and bridges.
Many brokers do a poor job of correctly utilizing their relationships with the trucking company they just vetted and spent 45 minutes onboarding. Trucking is a very fragmented industry, and we are here to make it more efficient by educating the trucking company on maximizing their assets, drivers, and routes.
On top of this, we seek to improve the efficiency and operations of small carriers. To do this, we want to help them use analytics to grow profits. That also helps with answering questions that are important to know. Could you tell me right now what your last month’s cost per mile is, loaded, empty, your average rate per mile?
The only time moving out of Florida is profitable is in May, during produce season, and in February during Valentines. The goal is to go to a head haul market from Florida. Ending in the midwest is ideal. Moving out of Florida is usually done at a loss. Using DAT, you can filter by state, zone, and rate.
When choosing clients, you want to make sure that they are both creditworthy & have a bond on file with the FMCSA. If you work for someone with bad credit and no bond: you risk not getting paid. You can not just think of trucking as moving things from A to B. You will need to consider the human component. Your relationships with customers, drivers, and regulators like DOT & highway patrol are essential.
For small carriers, you should be looking for experienced truck drivers, as getting insurance will be one of the most challenging tasks of your yearly fixed costs. New truckers should be team drivers to make sure that they build the correct experience.
On other podcasts, we will show live booking of freight.
Going from Florida, we recommend zones Z4, Z5, & Z6. We have an attached DAT zone chart for your review. Moving triangularly between those zones will make good money and build familiarity with the routes. If you have a customer that wants a load delivered to a low demand area, you will have to charge a premium.
Minimizing deadhead mileage minimizes risk and reduces costs. Ideally, you will specialize within a 2,000-mile radius within The Triangle.
SONAR® from Freight Waves® is an excellent source for data analytics and real-time updates. We recommend using it for daily market research.
We are still under the effect of pent-up demand from covid. A result of this is that the outbound tinder index is much higher than it has been in past years. That might mean that we see a notable bust in 2022 as things normalize, but you have much more capacity, as seen with the crash from 2018 to 2019.
Even though rates are high in the midwest, you need to be careful and make sure you work with reliable people. You have to do your due diligence.
Thank you for reading, and make sure to check out the full podcast available on our website!