Thinking of getting into Hotshot Trucking?
Is NOW the best time to start? What you should know and be prepared for
Thinking of getting into hotshot trucking? Hotshot Trucking has been drawing new participants at a record pace. They continue to pour in, even while the market is suffering historically from low rates and freight availability. The industry is flooded with drivers. Some markets much worse than others, Non-CDL especially. Anyone with a truck and a trailer has entered the fray.
One key fact that I uncovered preparing for this article is very sobering. In my capacity building my Network, Groups and working with some of the best insurance companies, agents, and our own Insurance partners, I asked what the average retention rate for new entrants after one year. The answer is that only between 10-20% of New MCs make it past the first year.
Do you have a chance to make it? Of course you do. It is all about the individual factors that I will outline next. The one thing I have seen over and over. Those that want to give it a shot are not deterred and will ignore the dire warnings of others.
Thinking of Getting Into Hotshot? Is The Timing Right?
First let’s talk about timing; this is not the best time. Those that are already running will continue but new infrastructure and facilities will wait for spring. The Holidays, November, December and January are historically slow. This year seems to be worse.
Thinking of Getting Into Hotshot Trucking? Another big factor affecting business today, weather. The Historic snows, ice, floods, Hurricanes, and wildfires out west. They disrupt manufacturing, shipping, and freight.
So long story, short, Business sucks currently and there are a lot of drivers working that live from load to load. There is much more competition. The increased competition and lack of freight drives the rates down lower because Brokers know that they will find someone to take the cheap freight. Just today, we bid on a load and the broker we were working with was lowballed by TQL at half of the $2 mile rate we bid. It is on the board right now at a $1 a mile because they know some fool will take it. TQL and other brokers are half the problem.
Getting Loads
So, you get your MC Authority, insurance, equipment, everything you need to get rolling – where do you get your loads? The brokers have gotten strict about new MC’s and have increased the minimum MC age requirements anywhere from 3 months to a year. Average is 9 months old. Why you ask – well there was a Supreme Court case involving C.H. Robinson ruling that brokers were liable for damages incurred from drivers that they booked loads with for damages, cargo, etc. Here is a recap: Miller’s case argued that the brokerage had a duty to select a competent contractor and alleged that C.H. Robinson knew or should have known about the carrier’s past safety violations. You can read about it here:
This lawsuit has literally changed the landscape of Trucking.
Then there are Broker Databases, FMCSA and Carrier 411 that more and more are using them. If you don’t know about Carrier 411, you should. They know about you: Carrier 411 has significantly impacted the trucking industry by providing a centralized platform for brokers to access and evaluate carrier safety data, compliance information, and past performance through “Freight Guard” reports.
This essentially allows them to quickly vet potential carriers and identify potential risks, which has led to increased due diligence in carrier selection but also raised concerns about potential bias and “blacklisting” of carriers. They can look up everything about you, your history, your Safer score, interactions with other Brokers, your inspections, your credit history, everything about you. Sometimes not having inspections can hurt as bad as a bad one.
Uptick In Scam & Double Brokering
Another factor that I consider to be a big game changer is the recent onslaught of double brokering, scams, and organized overseas Dispatcher companies and brokers. They can employ entire call centers for next to nothing. Can’t you tell by all the calls, texts, and emails? They take loads off the market even without having a driver for them by using your MC that you supplied to them. They have no idea about the lay of the land, HOS. ELDS Securement, and are hurting our industry.
Let me touch upon another key factor that will determine the success of your business, LOCATION, LOCATION, LOCATION! If you are in one of the overworked regions, Texas, Oklahoma, and many more, you are having to work hard to get a load out to a better area. There are just way too many drivers, and it has been that way for a couple of years.
You need to learn which markets are the best. To stay away from the Colorado, New Mexico, El Paso, Arizona, and pretty much anywhere west of DFW or OKC. You book loads to areas that will have a better chance of finding a load out.
Getting Into Hotshot Trucking: Are You Cut Out For The Business?
Are you even cut out for this business? It is not for everyone. More times than I can remember, I have seen good men start out thinking that this was for them. They invest huge amounts of money, buy trucks, trailers, and pay insurance. Insurance down payment can be $3-$5k. They go through and register their LLC, MC, get all the equipment ready to roll. I hear them say all the time that I love to drive. Sure, we all do until we don’t.
It is not so romantic when you are driving through Houston traffic in pouring rain, or up and down mountain passes, with 20k on your ass. Brokers calling you wanting to know where you are, when you are going to be there? Driving 11 hours straight, day after day, for weeks on end. Sleeping in your truck backseat in freezing weather or 100+ degrees.
Then there is the load securement. Getting out in pouring rain to strap, chain, or tarp a load. Having loads that are dangerous, and you must get out every 50 miles to check your load. Some loads you pull; some pull you. It is hard, It is brutal. Being away from your family for weeks, eating crap at truck stops. Sitting in the same seat, showering at Loves or Pilots. You really need to think about it and get the full picture.
What is needed to be successful?
Thinking Of Getting Into Hotshot Trucking? Finding the right loads. Loads that make you money. Don’t take loads to dead zones, know the lanes that you will have a chance of finding a load out. That takes experience. A good dispatcher or Lease on partner can help you.
Make sure that the load is what is listed, many brokers and shippers will mislead, lie, or be mistaken. Once you have that load on your truck, it is hard to give it back. Getting out of service can be very expensive, and hurt you CSA score, and Brokers will not want to use you.
Check the load dimensions, vet your load, what is the commodity? Weight, Height, width.? Will it be affected by wind, causing your MPG to cause you to lose money? It happens all the time and takes experience to know what types of loads you should take and avoid.
Understand the geography and routes. Before you bid on a load or accept a load from a dispatcher, you need to check the weather conditions. You want to look at a several-day forecast in the direction of your drop-off location. If you are headed west, to or through Colorado, Utah, Arizona, or points north of that, will I need chains or appropriate clothing? Be prepared in case you are snowed in. Know the mountainous areas all over the United States, West Virginia, east and northeast. Even Oklahoma, Arkansas, and Missouri have some steep grade mountains.
Be prepared for tolls on any route but some in the East and Northeast can be very expensive. Some Parkways are the only way and you can drop a chunk of change on them.
Thinking of Getting Into Hotshot Trucking? Be prepared for the inevitable, the breakdowns on the road. They are a fact of life in our business. They can set you back thousands of dollars. Have a plan, what and how to handle. Worst case scenario is that you have a load onboard and you breakdown, you must deliver that load or risk getting a Carrier 411 Freight guard. This could destroy your business and your investment.
You call one of the Mobile Mechanics who I refer to as Road Pirates, they can charge you whatever they want, triple the cost of parts, charge a mobile service fee, and much more. What if it can’t be repaired on the side of the road or needs parts from a dealer and has to be towed? Yesterday one of my friends was quoted $1500 for towing. I have paid $1000 for a truck and trailer out in the middle of Arizona. Nothing you can do about it. Just remember to communicate with your receiver, Broker, dispatcher, and tell the truth. We all know that this happens to everyone sooner or later.
Getting Into Hotshot Trucking: Can You Still Make Money?
Can you still make a living in this business? Sure, thousands do. Just be prepared, learn the business, work hard, work long, and most of all, keep your expenses down. Build up a nest egg for hard times and the breakdowns.
Thinking of Getting Into Hotshot Trucking? The best advice is to remind you that when you are not making money, you are out for whatever reason, INSURANCE PAYMENTS have to be paid, they keep coming. Be financially sound, leverage your credit cards, pay your insurance by the year if you can. Work smart, get an auxiliary tank and use Greenlane fuel card to save hundreds every month.
I hope I have helped to get you to think, my advice is not to jump in unless you have some experience, know what you are getting into. Understand that although the money sounds good, you hear drivers are making $5k a week, but are they making money? Don’t let the dollar signs blind you to the journey. The saying in Hotshot trucking is the way to make a million dollars, is to start out with two million dollars. Real talk.
