As I discussed in the previous post, being a smaller motor carrier can be to your advantage in the ‘Beating the Large Carriers’ game, as you adjust to changes more quickly than your larger counterparts. The industry is changing: fuel costs won’t be going down any time soon, consumers are noticing how much energy is used bringing the products they purchase to market, and the adjustments shippers and receivers are making in how they do business means a hauler needs to be on top of the market he serves.

If you are going to beat out the larger carriers, you’ve got to know the nine rules of the game.

• Rule # 1: Large carriers set and quote their hauling rates to the customer. Market forces may dictate price, but individual customers do not. You must do the same.
• Rule # 2: Market forces include what it costs you to do business, along with what supply and demand is for the items hauled.
• Rule # 3: Letting shippers or brokers set your hauling rates will not bring you the level of revenue needed to operate and grow your company.
• Rule # 4: You must know the market you serve in order to succeed.
• Rule # 5: To set your rates you must know your costs; your one, three, five and ten year growth goals, and the capital required to reach each goal.
• Rule # 6: Knowing what your customers need is important; knowing what they want is paramount, providing them both is success.
• Rule # 7: Understanding that all hauling segments have economic variables, knowing the economic cycle of the market you serve is a must.
• Rule # 8: There will always be someone who will haul a load cheaper than you are willing or able to haul it.
• Rule # 9: The best paying loads come from diligent planning, knowing the correct rate for the services provided, distance traveled, and time required; and knowing when and how to say “No” to loads which don’t meet your revenue criteria.

Beating the large carriers for the best paying tonnage means you don’t compete on price. If you provide top quality, go-out-of-your-way service, that “Can Do” approach will make it impossible for someone trying to compete with a lower price to succeed in taking your customer.  Choose your shippers wisely. Always look for the value-conscious, not the 'price and discount' shipper. A discount shipper will always go looking for a lower price every time you increase rates. A value-conscious shipper will give you an opportunity to show him why the rates need to be increased, and if justified, will stick with you. This means simply showing your shippers what it’s costing you to do business, and what you need to grow and capitalize your business to better serve them in the future. You should always have the facts and figures in hand, ready to demonstrate why a rate increase is necessary.

For every trucking company going out of business, there are shippers now needing new haulers to fill their transportation needs. This is a time of boundless opportunity for those who have laid the groundwork to be a smaller, leaner, more nimble motor carrier.

Good loads and safe roads, everyone.

Timothy Brady
©2009