Did you know that trucking accounts for over over 80% of the United States freight revenue? Truckers transport billions of tons of freight every year, and the amount of yearly freight continues growing. As an owner-operator, you often have many different loads available for transport, but you need to know how to pick the highest paying loads to have a profitable operation.
Although you may be aware of the different ways you can find loads, you might not know what to look for in picking the best freight for your business. Finding the right freight is critical for your success as an owner-operator.
Different brokers and shippers have a great deal of freight available, but if you’re transporting freight that doesn’t turn much of a profit, you’re wasting your time. Successful owner-operators consider many different important factors when picking the right load. You need to begin scrutinizing shipper’s loads to maximize your revenue and expand your business.
In addition to picking lucrative loads, you also need to choose freight that accommodates your needs and preferences. Just because a load is profitable doesn’t necessarily mean it will be good for your business long term.
Fortunately, Xpress Technologies created this list of several different considerations you should contemplate when signing up for new loads. Regardless of what method you’re using to find freight, such as load boards, freight brokers, or contacting shippers directly, you should consider the following factors when picking loads:
The overall price of the load may seem like an obvious consideration to take into account, but you need to be sure to evaluate different factors when finding loads that pay well:
Rate per mile (RPM): You need to consider the RPM when transporting freight. Research and learn the average RPM on the lanes you’re running. Many load boards include an average RPM feature, so compare the different rates and pick lucrative loads.
If you’re in direct contact with a shipper, you may be able to negotiate a higher rate based on the lane’s average RPM.
Also, make sure to be on the lookout for rates that are above market price. For example, if the average RPM on a lane is $3.00 and the RPM offered by a shipper is $7.00, it may have unreasonable requirements and could even be a scam or fraudulent listing.
Net Profit: In addition to the RPM, you should also consider the total amount that you’re netting from transporting the load. You need to calculate the total amount from the number of miles you’re traveling and the RPM.
Additionally, make sure to factor in expenses and operating costs, such as fuel, miles on your truck, food, and other expenses. Your overall operating costs play a substantial role in whether transporting a load is worth it for your business. Some loads offer such low rates that you may not even profit because of your operating costs.
Freight Lane Comfort
In addition to taking your overall profit into account, you should also consider the lanes that you’ll be driving in. A particular lane may offer a high RPM, but it could be challenging to travel. You may also need to navigate through harsh conditions that can raise your truck’s operating costs. Some of the highest paying freight lanes are also dangerous, such as ice road trucking. You need to consider your safety and driving abilities when deciding what loads to transport.
You may have difficulty transporting freight in certain climates if your truck is ill-equipped to handle certain road conditions. For example, if you primarily transport freight in warmer climates, you might find it challenging to haul freight in colder climates during the winter months. You may also struggle crossing mountainous terrain if you primarily transport freight on flatter routes.
You should also think about how well you know the lanes you’ll be driving when transporting freight. Being unaware of your routes can lead to increased travel time, making your transit less efficient and more costly.
Transporting freight with a high RPM often means driving through uncomfortable lanes. Always research the routes in which you will transport freight before signing up for a load to ensure you and your truck are successful and equipped for the journey.
The Size of the Shipper
If you are working with a broker, the size of the shipper you’re working for may not be as much of a factor. Since brokers interact directly with the shipper, they make sure you have all the necessary load information. Brokers give you peace of mind when working with shippers, regardless of size.
If you are not working with a broker however, you need to consider which shippers to work with. The overall size of the company often determines the profitability of loads and your relationship with the company. Working for small and large companies both have pros and cons that you should consider.
When working with a smaller shipper, you can usually count on having a better relationship than you would when working with a larger shipper. If you’re performing your job well by communicating and providing your client with on-time service, the company’s key decision-makers will most likely notice. When you’re able to form a positive work relationship with a shipper, you’ll be able to transport their profitable freight in the future. Additionally, they’re more likely to care about your satisfaction in working with their company, so they’ll treat you well to ensure that you continue working with them.
When you work with smaller shippers, you’ll also have an easier time developing a local client base. If you do a great job transporting freight for a local company, you’ll likely receive referrals and can increase your clientele.
Although there are many advantages to working with smaller companies, there are many benefits to working with a larger company. When working with larger shippers, you’ll gain access to different kinds of freight, some of which may be more profitable than others. Smaller shippers might only offer select freight, so you’re limited to transporting whatever is available. Additionally, larger shippers can offer more consistent loads than smaller shippers because they’ll have a great deal more freight that needs to be transported regularly.
There are many financial benefits to working with larger shippers, but you’re unlikely to build relationships with those shippers. Larger companies work with many carriers, meaning that they do not rely on you and can replace your services quickly if you stop working with them. You are also far less likely to receive referrals when working with a larger shipper. If you’re working with a broker, you’ll be less dependent on these shipper-to-shipper referrals as your broker will be able to connect you with whatever company may need your services.
There are benefits to working with small and large shippers, so consider your preferences when deciding which loads to transport.
Ever wonder how brokers deal with so many shippers and juggle all their different behaviors? Well, it requires a lot of time and research. Doing research into shipper behavior is especially important if you’re not working with a broker, since you won’t have backup if you have any problems with the shipper. What’s the shippers’ reputation? Do other trucking companies enjoy working with them? Look up carrier reviews of the shipper on a website such as Truckers Report and Trucking Truth. You also need to check their credit score. Many different load boards feature credit scores, so be sure to work with shippers with great scores.
Find out how quickly the shippers pay their carriers. Shippers might pay quickly, but you also need to know whether they’re running an efficient operation. If they’re known for being late when loading freight, you may have difficulty meeting your own deadlines when transporting mixed freight. As an owner-operator, time is always of the essence, so you need to have the ability to calculate when you’ll reach every dropoff point. You should always plan and understand the costs associated with being held up at a facility. If the shipper you’re working with delays you, it could cost you money.
If you’re stalled by a shipper, you should also be aware of whether they will pay for detention and whether their employees will handle the loading or not. If you’re working with a high quality broker, this information will be readily available to you; you’ll know before accepting a load whether the shipper will pay certain accessorial fees since good brokers are upfront and will consistently provide this information.
Knowing how shippers behave plays a critical role in selecting loads. If you’re using a freight broker to facilitate the transaction between you and the shipper, ask the freight broker about the shipper’s behavior. If the shipper offers a great rate but regularly delays drivers, the money might not be worth your trouble.
Type of Freight
Finally, the overall type of freight will always be important when deciding what loads to transport. You need to choose freight that you feel comfortable transporting and make sure that you’re certified to transport it.
Some items can be easily damaged during transit if you don’t have the right equipment, meaning that some shippers may reject the damaged load or underpay you. It’s important to use technologies that support specific operating conditions. For example, if you’re transporting perishables, refrigerated trucks have technology that monitors the temperature of the trailer. Many different perishable food items can experience damage during transport, including fruits, vegetables, dairy products, eggs, meat, poultry, and seafood. If you’re transporting perishable goods, these technologies can help your truck carry the freight without damaging the items or letting them spoil and they’ll provide an audit trail that you’ve maintained any required operating conditions for the freight (e.g. temperature control).
You also need to consider whether you’re allowed to transport the load’s weight legally. The available load might exceed your truck’s maximum legal capacity. You should investigate whether you’ll need a special permit for transporting the load’s weight. Additionally, heavy loads will use up more fuel, adding more to your operating costs. When picking up a heavy load, make sure to check whether you can legally transport it and whether it’s financially worth it.
Additionally, you might need a special permit for the freight itself. Some of the highest paying truckloads involve transporting hazardous materials. The Department of Transportation has labeled different classes of hazardous material, including:
Explosives (Class 1)
Gasses (Class 2)
Flammable liquids (Class 3)
Flammable solids (Class 4)
Organic peroxides and oxidizers (Class 5)
Etiologic materials and poisons (Class 6)
Radioactive materials (Class 7)
Corrosives (Class 8)
Miscellaneous substances (Class 10)
If the available freight falls under any of those classifications, you’ll need to receive a Hazardous Material Endorsement. You can apply for a HAZMAT Endorsement on the Transportation Security Administration (TSA) website.
Learn More About the Types of Loads You Should Take
Finding dedicated, good-paying loads is critical for your trucking business, but you should also consider the freight lanes you’ll drive through, the shippers you work with, and the type of freight you’ll be transporting. If you want to learn more about the types of loads you should transport and what types of freight pay most, contact our Carrier Xperience Team at 1-800-DRIVERX. Our Carrier Xperience team will help support you as your knowledgeable freight resource to drive your business to success.
Here at Xpress Technologies (XT), we care about your success as a carrier and a small business owner. We’ve leveraged experience for over 35 years to supply owner-operators with reliable and affordable services. With our top-in-class XT ELD (previously called the Haulynx ELD), we can provide you with a career-changing load board and ELD services. If you’re ready to discover what sets Xpress Technologies apart from other trucking services, contact our Carrier Xperience Team today.
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