Let’s continue on our course to “Finding Good Paying Freight.” Even though we are in the middle of the lowest freight rate period in decades, this doesn’t mean you can’t find decent, revenue-producing freight.
 
As the trucking industry is emerging from the recession, you not only have to look at the revenue on the round, it is necessary to look at it by the month and quarter. Your objective is to have revenue which exceeds your Break-Even Point (BEP) at the end of a month. In order to accomplish this, you look at the revenue results of a month of loads. While each load may not be a positive cash flow producer (exceeds your BEP), at the end of the month the combination of all the revenue from all the loads hauled in that month exceed your BEP. To succeed in this business model you need to be running in a specific freight lane with at least two dedicated runs that pay above your BEP.  This is so you can afford to run other legs of the freight lane at less than your BEP, with the net result being a profitable month. This can only be done by developing specific freight lanes with definitive loads pre-planned in advance. 
Example: The area in which you are domiciled is historically a very low outbound freight area.
1.      Inbound Freight. First locate good paying freight that is coming into your domiciled area on a regular and consistent basis.
2.      Transition Freight. Locate freight that originates within 250 to 300 miles of your domicile. This freight needs to be headed toward the origin of your good paying freight. As transition freight, it needs to pay close to, or exceed, the amount of your BEP.
3.      Outbound Freight. This is the freight out of your low freight availability area. This freight needs to get you to your Transition Freight origin location. This outbound freight will probably pay below your break-even point. The idea here is to have some revenue coming in that offsets your costs in getting your equipment to the Transition Freight location.
 
What we want to do is a reverse search of what is normally done. Instead of searching for quality paying freight from an area where it’s most likely not going to be found, we’re looking where the good paying freight is already located. Getting your equipment to the good loads necessitates stair-stepping your loads and revenue in an upwards fashion on outbound and transition freight. Keep in mind you may have to find two, three, or even more transition freight locations to make the system work. Simply put, find your good paying freight and then work your way to it, one step at a time. This is done carefully and diligently, understanding that the final goal is the total revenue produced by all loads hauled over a month or a quarter. Here is where your profit lies.
 
In the next installment, we’ll discuss what to do when you have one or two trucks and need freight, but don’t have the hauling capacity the broker or shipper needs.
 
 
Timothy D. Brady is
•     A 20 + year trucking industry veteran
•     The Trucking Business Expert on Sirius/XM Road Dog Trucking Radio
•     Heard in podcasts on http://AmericanRigRadio.com 
•     Author of best-selling trucking business books and columnist for top trucking industry publications.
Join Brady in the Trucking Business Community at www.truckersu.com for a continuing business learning experience. Be a part of the solution.
Contact him at tbrady@writeuptheroad.com or call (731) 749-8567.