Trucking Companies

As:

Providers of Intermodal Business to other Truckers

Trucking companies are defined here as carriers properly registered (where required) with a base of operations. They have administrative and sales capability, proper legal filings and appropriate insurance. Such carriers use owned trailers or container equipment, or that of railroads or other owners in intermodal service.

These carriers may need intermodal truckers for their operations, using them as:

- Drayage trucks where they are over capacity

-Cartage agents where they need representation

-Leased owners, for long-term commitment

-Leased owners for trip-lease type operations

Drayage Trucks:

Here the Trucking Company as a customer is hiring the services of a drayage motor carrier in the same way as an industrial customer or Shipper Agent would execute an order. Charges are possibly at that same rate level. The intermodal trucker is not the Trucking Company's Agent. This Trucker is looking for a drayman with all legalities in place (registration, permits, placards…) and tractor power and drivers. They will hire such drayman to take and accomplish intermodal load orders.

If there are reasons the drayman should give rate concessions, the Trucker will assuredly bring them up during initial discussion. Pricing probably will start the conversation. If not in an acceptable range the drayman is better off ending the discussion prior to the Trucking Company walking his site. This Trucker will often look for discounted rates reflecting balanced loads "up front", steep reductions in price for the potential of balance, prior to actual experience.

The drayage carrier should offer the concept of balanced rates dependent on actual move experience. The Dray offering would follow these guidelines:

The location at which loads are to be picked up:

Rates can be adjusted if the equipment is not restricted to the Trucking customer ownership, and the drayage trucker has empties in the area routinely, or can use emptied equipment for other intermodal moves. In such a case the drayage carrier possibly has been paid for a return in his head haul, and could provide a decent discount for a backhaul.

If the equipment is owned by or restricted (by interchange) to the Trucking customer, the best case rate would be using those units emptying out in the area, then adjusting the rate for dead head miles. This will be a hard sell without traffic lanes and significant volume that fit the drayman’s needs as well as the Truckers.

Where loads are to be delivered:

On deliveries by the drayman there is potential for rate eduction. An offer can be made on an "if come" basis to reflect Trucking customer pickups made with a unit previously used for delivery.

If the destination is high volume, and can have its trailer use mixed with the intermodal carrier's other base of business, there may be cross haul benefits. Otherwise, if the Trucking customer has no objection, the unit can be used to bring back someone else's freight. This latter should be specifically defined in the agreement.

Pickup of trailers or containers not owned by the Trucker at rail ramps or yards is best done under the Trucking customer's Agreement with the leaseholder or railroad. This restrictive method of receipt is not a necessary part of the process but protects the drayman, and properly allocates per diem. The drayman's insurance gross receipts reporting should deduct such amounts, as coverage is the Trucker’s. This routine could be arranged at the time the actual order is accepted. If the intermodal unit is picked up under the drayage agent's Agreement the personal and equipment liabilities are much different than if the Trucking customer takes this responsibility.

The Trucking customer will authenticate the drayage trucker's insurance coverage. It is probable, and preferable, that the drayman’s Safety record be verified at the same time.

Trucking Companies will use draymen only as long as it fits their operations. As they build volume they will have more incentive to change the draymen out for Agents, or put their own personnel on site. A business risk. A drayage carrier will have built the Trucking Company’s local reputation as a reliable carrier and will lose that business. If the proportion becomes significant, and the drayman's personnel leave to go with the new operation at time of the change, the loss might be ruinous.

Cartage Agents:

Such truckers are signed on with an Agreement form. They become the Trucking Company in the area served. They will answer the telephone as the Trucking customer. Their trucks will be placarded with Trucking Company door signs. All administrative costs and duties are normally assumed by the Trucking Company or paid separately. The Trucker provides insurance. The Cartage Agent becomes a "truck".

It is a comfort if the Trucking Company will Agree with its Cartage Agent to not actively compete by delivering freight with its own equipment, or remove him except for cause. Cause, of course, may be competitive necessity, or greed. Generally, Cartage Agencies are to the best interest of the Trucking Company that uses them, and best left to grow and contribute to that carriers overall revenue

There are numerous reasons for a Trucking company to hire a Cartage agent to enter a market. The most obvious are:

The carrier may want presence in a particular area where they have, or

desire, business.

A person controlling freight business and trucks, tractor power, may

approach them with the idea of becoming their Agent.

An owner of more than one tractor may want to grow his business in a

geographic area that is interesting to the Trucker.

Finally, the Trucker’s present Agent may be less than effective.

The individual wanting to become Cartage Agent should know where the tractors he will use will be coming from. Usually the source is owner-operators, often multiple-owners, or this person may be the multiple-owner. He must know how to acquire motive power, hold it, and grow and replace owner operators as necessary. He will need to convince the Safety department of the Trucking Company of this skill, and their Operating department of his ability to run a “franchise” for them.

The Trucking company will supply the drayman cartage agent with forms, systems (and possibly computer hardware and telephone lines) to integrate this new business into the formers business methods with the least disruption to the Trucker. There will probably be charges for this. The drayman’s tractors will have Trucker placards, cab cards (if any) and any state or federal tax or identification stickers.

Receiving Orders can be accomplished by telephone on a casual basis, but should be formalized by fax or electronically to assure the same knowledge is in the hands of the drayman as is possessed by the Trucker. This paperwork supports the invoice.

The format is generally fixed, repetitive as to style for all moves. Where the Trucker sets up a computer-to-computer link to the drayman, the latter must make sure all data is integrated into its system, be it manual or automated. When the Cartage Agent sends its truck with business outside of its locale, the Trucker should be advised at once if only to assure planning for backhaul of the Agent’s truck when empty or bobtail.

Dispatch is usually taken care of by the Cartage Agent within a framework laid down by the Trucker’s dispatch order. Equipment interchanged to the Agent, which the Trucker owns, or controls is generally used, even to the extent of using the Trucker’s line haul drivers if in position. The potential of this type move (using Trucker manpower) should be recognized in the original Agreement and compensation arranged for the Agent, otherwise such instances may be considered infringements on the contract. If When Trucking Company equipment moves become dominant, the drayman should plan on dealing as a broker, finding another patron, or becoming independent.

Reporting Success to the Trucker is imperative, reporting failure is even more important. The drayman should recognize that it is not he who has missed the delivery or pickup schedule, but the Trucking Company. Where possible this reporting should be coupled to payment for the move, providing a reason to advise the Trucker quickly.

Control of tractor power varies significantly among assorted types of Agreements. The drayman’s tractors may leave its control once under Trucker dispatch, and return when the Trucking Company provides freight to return to the Agent’s domain. This type operation offers danger to the drayman’s existence as a carrier, particularly if the trucks are owner-operators. The drayman is better off keeping tractors under its control, interchanging loads to other Trucking Company agents if delivery is beyond range.

Control of Trucking Company owned and interchanged containers and trailers should be considered as if the drayman were dealing with a railroad or steamship company, noting certain differences. There will, probably, be a need to report routinely as to location, identification and condition. Maintenance and repair matters should be at the direction of the Trucking Company; the interchange in its name makes the Trucker responsible on non-owned equipment as well as it's own.

Billing ought to be done by the Trucking Company as shippers and receivers are its customers. Payment to the Agent can be as immediate as “next week”, and is with many of the better operated companies. Speed of payment from reputable companies will depend on how well the Agent fits the Trucker’s needs as to information and proof’s of pickup and delivery. Two weeks from execution date should be maximum.

Leasing Owner-Operators for Long Term Commitment

Contracting for Owner-Operator use allows administrative services to be supplied by the Trucking Company as well as actual dispatch control. This includes Placards, Safety orientation, cab cards if any, state stickers, etc.

It is not unusual for a Trucking Company to contract with owner operators or multiple owners; assign them a niche business, and let them run that commerce. The Trucking company oversees the moves as the leased operators turn in paperwork or as work is assigned, or both. In most cases the drivers establish rapport with the receiver or shipper and the move becomes an integral part of the industry’s supply line with little or no control by the Trucker.

It is more common for the Trucker to contract for trucks and drivers and fold them into their system as a “permanent” part of their Operation. Direction comes from Trucking Dispatch, payment from Trucking Administration. These are the Owner Operators as described in previous Sections.

Leasing Owners and Tractors for Trip (or Short Term) Lease:

There remains a cadre of free spirited owner-operators that sign-on with no carrier or company for a long term. Their focus is on bobtail tractors to haul intermodal trailers and containers. The fact that this class of driver exists makes it attractive to Trucking companies with intermodal interchange agreements.

These folks simply want to drive and make enough money to survive. They do not want the responsibility of permit registration, nor owning trailers (or do not have the money or credit to own them). They are first cousins to those of their breed who do have trailers, and wander foot lose and fancy free from broker to broker, “gypsies”.

This group has the most tenuous of existences. Brokers and others who contract for their services misuse them with the greatest regularity. As a result they are often most untrusting and difficult to deal with.

The Trucker or his broker supplies everything to trip-lease operators other than tractor and driver. Temporary permits, and placards, are provided. While the tractor will probably have minimal insurance, the Trucker will provide the liability and property damage that his customers require. If the truck has worked for the Trucker before, there may well be an advance for fuel and to make the driver comfortable that he will, in fact, be paid, at least that much.

Given the lack of structure in their business many of these Operators are the most technologically advanced of independent truckers. Often they will have in-cab fax machines, scanners and laptop computers. These aid in proving delivery, sending copies of billing and international paperwork and filing permit applications while in transit.

Upon delivery, the truck will use a prestamped envelope (which a wise Trucker has provided) to mail in receipts, bills of lading, fuel receipts, log copies, etc. Ostensively this is to fulfill the contract; actually it is to make sure the Trucker has proof that the work was done. When the paperwork is received the truck should receive payment.

Given the complexity of intermodal interchange agreements, varying ownership of equipment, and the international nature of much of the business, use of trip-lease operators is not a recommended choice. Short term, 30-day, leases are appropriate only if the Trucker has some kind of handle or leash on the truck driver/owner. Reporting in is not their greatest strength, particularly if prepaid with adequate advance.

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