Do Car Haulers Need a CDL?

Do I need a CDL with just a truck and flatbed trailer?

What are the CDL weight requirements for a car hauler?

Do I have to have CDL to haul 3 cars?

What is the maximum weight I can haul with a topkick and 40ft trailer?

I’m new to car hauling where do I start?

Hi, I’m new to car hauling-I’m looking to get a 1 or 2 car hauler to start, any suggestions?

These are some common questions that we get in the support window here at Super Dispatch. Because we have some former car haulers in our team, we decided to do a little overview of CDL steps and requirements.

A Commercial Driver’s License is a similar process to getting your regular driver’s license. You have to register within a certain state (where you reside,) you must prove your knowledge on a written permit test, hold a Commercial Driver Learner Permit for a period of time, and then perform a physical driving test.

Can I start hauling cars in ____ trailer without a CDL?

Depending on what kind of car hauling you do, you do not need a CDL to haul cars. Commercial Driver’s Licenses are designed to train commercial employees to drive heavy, oblong vehicles. Yes, there are trailers – like 2 and 3 car wedges – that are below the CDL weight requirement rules.

Rarely can we answer a weight requirement related question for someone – all vehicles and trailers have different GVWR and GCWR. No one but your truck and trailer will have these answers.

I often think that what people are really asking is “Should I start hauling cars without a CDL?”

This of course, we can’t answer either.

Do I need a Class A CDL to haul ____ truck and trailer?

While CDLs come in many classifications, Car Haulers need not worry about any classes or endorsements outside of a Class A CDL. Class A is the heaviest class of CDL, and thus the best fit for car haulers:

Class A CDL: Any combination of vehicles with a Gross Combination Weight Rating (GCWR) of 26,001 or more pounds, provided the Gross Vehicle Weight Rating (GVWR) of the vehicle(s) being towed is in excess of 10,000 pounds.

With a Class A certification, you can haul cars in a 50ft wedge all the way up to a 7 or 9 car trailer. If you aren’t sure what kind of trailer you will drive, or you aim to eventually be an O_O, this class is a must.

In Missouri (where Super Dispatch is based) obtaining a Commercial Driver’s License of any class at the DMV costs around $100 once it’s all said and done. Of course, actually paying for the license is the cheapest part of this process.

Can you get your cdl without going to truck driving school?

By this point in the CDL process, you might have noticed something: truck driving school is expensive. Whether it’s a single class, a semester or a community college – it can cost around $3,000.

This CDL thing is a huge barrier to entry!

The short answer is yes, in most states you can take both the CDL permit test and the physical driving test without paying for a trucking school. Most states will not require you to prove any sort of formal education.

Consider though, that going into any test completely blind is a bad idea.

There are some low cost options for the written and physical tests. Tom Stec, Super Dispatch customer and owner of Fury Transport LLC. in New Jersey studied for the written CDL permit test for free. To prepare for the written test, he simply read the New Jersey CDL Manual “cover to cover.”

“I prefer to read but others have watched YouTube videos and that worked better for them. There are even Apps for your phone that are in quiz format. Some people praise those because they don’t like reading,” he said.

Stec got lucky, because he was able to practice the physical driving test with his truck-driver father with his large trailer.

There are also companies and schools where you can schedule “practice tests” using your own equipment (or theirs) for a few hundred dollars. This allows you to get into a testing situation without paying thousands for multiple classes.

Most experienced car haulers scoff at the idea of classes; you can’t learn in a class, only in the field.

Do you need to test in the same vehicle that you will drive in?

Different people will say different things. The Missouri Highway Patrol (the department that runs Missouri CDL tests) says that you only need to prove your knowledge in a truck of the right classification. This means you could plan to car haul, but take a class or pass the test using a dry van. Remember though, a Ford F450 with the right trailer might be a Class A, but it won’t have air brakes, 5th wheel or a manual transmission. So you might walk out with a Class A CDL with air brake, 5th wheel and manual restrictions.

According to some of our customers, there is not much of a difference between car hauling trailers and traditional dry van.

“There’s no difference,” Tom Stec said. “We need a Class A (truck and trailer with air brake) You need additional endorsements for Tanker(hazmat),Passenger(bus), and doubles/triple trailers. We don’t need any of these additional endorsements but it looks good on your resume when applying for driving jobs!”

Prior to CDL Permit Test, you should:

  1. Obtain a valid federal MER MCSA-5875 form and Medical Examiner’s Certificate Form, (MEC) MCSA- 5876.
  2. Fill out a CDL application form specific to your state
  3. Study your state’s CDL Manual
  4. Take the CDL written permit test at a DMV

After acquiring your permit:

  1. Determine what kind of tractor / trailer combo you plan to pull
  2. Find a CDL trainer or a car hauling mentor
  3. Practice during the required time period in between your Permit and CDL test
  4. Learn every function and button about your truck / tractor / trailer

To prepare for your CDL:

  1. Get a mentor or trainer, or go to a CDL school to practice physical driving
  2. Practice:
    • Pre-trip inspection
    • Basic vehicle control
    • Road driving

CDL Super Dispatch mobile Any tips for passing driving test?

“When doing the road test, before you start driving you have to do a walk around inspection. You have to explain every single thing in detail and you can’t assume the instructor knows what you’re talking about. Picture instructor as a person who is new to trucking and you are explaining everything to them for the first time,” Stec said. “My road test instructor said that I did a better job at explaining everything than the instructors do at the CDL schools.”

Understanding the car hauling industry

So you want to be a car hauler.

You have looked at different parts of the trucking industry, you might even have your CDL. But you have settled on hauling cars: maybe because it’s profitable or because car hauling has the least red tape. It is a hard niche to get established in. But it is worth it, if you can hack it.

Industry overview:

Physically hauling cars is not the only job option in this industry. There are a variety of occupations in car hauling. Super Dispatch’s customers cover the entire industry, which is broken into three categories: shipper, broker, and carrier.

The supply of cars that need moving comes from “Shippers” and the car-movers are “Carriers.” Between these two are “Brokers.”

The Shipper:

A shipper’s primary job involves cars, but not the transport aspect. OEMs like Jeep, Mercedes, Audi are considered shippers, but dealerships and auto auctions like Manheim and Adesa are as well. While car dealerships and OEMs are huge shipping customers, “shipper” also applies to individuals shipping personal vehicles (like military families or college students.)

The Broker:

Brokers are the middle-men between shippers and carriers. Because shippers are not in auto-hauling, finding carriers is a challenge for them. Often this means shippers hand over load offers to brokers instead, who then find carriers for a “finder’s fee.” This is usually a percentage of the load price. These fees are why carriers hate brokers; they see brokerages as a necessary and expensive evil to find loads. “Brokers make car haulers broke” is one of the least colorful phrases a new car hauler will find in this industry.

There are absolutely dishonest brokerages that prey on unsuspecting carriers. But brokers need relationships just like carriers do; if a broker messes up a good relationship, his entire business is in the toilet.

Regardless, it’s common for OO’s to start out by booking any load for themselves on load boards until they find three or four trusted brokers.

Even with good brokers in the game, the goal for many carriers is to avoid them entirely. This requires a lot of planning and work, but it can be done.

Big car hauling brokers: A1 Auto Transport, Metrogistics, United Road, Montway.

The Carrier

If you’re here, you know who a carrier is and what he does. But you might not know that not all car-carrying is created equal! There are about three job options for drivers:

Company drivers –

Company drivers are employees, usually of larger companies with anywhere from 10 – 500 trucks. You may have heard of big companies like Swift. Companies like Swift employ a majority of drivers in the industry. This form of employment is ideal for new drivers; the pay and benefits are okay but the work is consistent and drivers are not liable for damages. Sometimes, these companies will pay for CDL schooling and driving practice in exchange for work contracts or payment programs.

Fleets: Jack Cooper, United Road

Sub-ContractorsSuper Dispatch Car Hauler Transportation Management System Business

Contract work is a step above fleet driving in terms of freedom, but it is not necessarily the same thing as owning your own trucking company.

A common situation today is a driver leases his truck from a huge company like A1 Auto Transport and Ready Logistics. That same company will employ him as a “contract” or “sub-contract” worker (1099 IRS form.) Technically, this driver should be able to refuse load offers without any troubles from his leasing company. He also should be able to run loads from any other company or load board (within reason.) This is another way car haulers lose money.

On paper, 1099 workers get paid a higher dollar per mile than W-2 employees, but they get none of the benefits awarded to company drivers. This means that after expenses (gas, maintenance, health insurance, liability insurance, trailer lease payment, self-employment tax) the pay-per-mile decreases significantly. In many cases, 1099 contract workers end up with significantly lower take home pay than an employee driver.

This is profitable for huge companies to make rental money off of their equipment (much like a landlord with a rental property) while also getting drivers to move freight without paying employment taxes, health insurance or liability insurance.

Much like other professions, contract truck driving rarely benefits new and inexperienced workers. This type of work is only meant for an expert driver who can effectively run a business.

Common contracting companies: Accelerated Services

Owner Operators

Having your own authority is the driving life to which many car haulers aspire. You act as a dispatcher and a driver, find your own loads and drive wherever you choose. You choose what rates to accept on whichever load boards you want and what freight to haul.

How is being an owner operator different from contract work? Mostly, there is no 1099 contract with a company. This is the ultimate goal for drivers because it requires you to be a 100% independent business. Many companies will call their contractors “owner operators.” Though it might be technically true, owner operators and contractors have small but important differences. In this industry, owning your truck outright or leasing it from a company that is different than your load contract is the primary difference between OO’s and Contractors.

Owner Operators: Alpha Elite Transport, EM Logistics / Exotic Cars Midwest, Dailey Transport  are just a few of the Owner Operators that use Super Dispatch’s car hauling dispatch software to run their small businesses

Anything we forgot? Let us know in the comments!

Tune in for our next “New To Car Hauling” articles:

  • Car Hauling Certifications and Driving School
  • Deciding on a trailer type
  • Trailer insurance quotes
  • Making a car hauling business plan
  • Getting your own authority
  • Deciding on an ELD
  • Maintenance considerations
  • How to find loads

 

Industry Concentration: the forgotten car carrier problem

A lot of power in the hands of a few

Between 17,000 franchised American car dealerships, around 35,000 car carriers and an endless supply of brokers, the auto hauling industry is robust and fragmented.

Though industry fragmentation is a commonly cited problem, industry concentration is just as pervasive. In fact, a lot of the industry is owned by only a few companies.

KAR Auction Services and Cox Automotive are two such companies with a large share of the market.

car hauling industry, concentrated power super dispatch research

Super Dispatch’s map of the biggest players in the car hauling industry

The incredibly successful Manheim Auto Auctions and Central Dispatch are both subsidiaries of COX Automotive. Manheim has over 80 locations across the United States and Central Dispatch is still the industry’s loadboard leader.

Another large portion of the industry is owned by KAR auction services. Two of KAR’s subsidiaries are huge auto auctions IAA Super Dispatch BOL car hauler owner operators and fleets(Insurance Auto Auctions Corp.) and Adesa. KAR also owns a competitive loadboard, CarsArrive Network.

Metrogistics, United Road and to some extent Montway are competing for more industry share akin to KAR and COX. Though the insurance auctions are bought out, these other companies have moved toward expanding their brokerages, creating competing load boards and designing transportation management systems after our own at Super Dispatch. These moves are in order to “capture the market.” The “market” being car carriers.

These companies and subsidiaries could compete or work together in the marketplace to make their services more desirable for carriers. But instead, they double down on creating obstacles and penalties if a carrier decides to use more than one auction, load board, broker or TMS to run their business.

This non-cooperation is the status quo of the industry. It’s meant to disincentivize carriers from using other auctions, load boards, brokers or softwares altogether. In practice, it forces carriers to split more of their time between warring companies just to keep their trucks filled and get paid on time.

“This non-cooperation is the status quo of the industry…it forces carriers to split more of their time between warring companies just to keep their trucks filled and get paid on time.”

We especially see this in our own corner of the industry. Some brokers have flat-out refused to accept any Bill of Lading or invoice processed through Super Dispatch. Whatever the reason, ultimately this routes more business through their own “Broker Apps.

Zero sum game and monopolies

The way Super Dispatch sees it, these brokerages, auto auctions and load boards are setting themselves up for a zero sum game: whatever company catches the most carriers the quickest will monopolize the industry.

What happens when single companies monopolize the load processing software, the brokers, the auto auctions and the load boards? Carriers lose their bargaining power.

Car Hauler BOL App Super DispatchWhy is Super Dispatch different?

Super Dispatch is connecting the auto industry, not further fragmenting and concentrating it. And this is because we are an independent TMS created by carriers, for carriers.

By placing carriers at the center of our company platform, we are changing the industry standard.

We constantly update our software to make it compatible with any broker, load board or auto auction.

We listen to our carriers, always accept feedback, and often implement changes because of their suggestions.

All of the products we plan to make in the future will continue to be independent and as universally compatible as possible.

We want our customers to be the best-equipped they can be in this complex market.

But how can the rest of the industry change?

The changes we are spearheading are what will cause the market to change. Large market forces are hard to overcome. But newer companies across the industry, ours included, have begun to balance power structures in the market. as new technologies help carriers to make more educated business decisions, we think that carriers will be able to better advocate for themselves.

In the near future, there will be a single platform and API that every company (big or small) can use to find trusted brokers, carriers and shippers.

Communication between drivers, dispatchers, brokers and shippers will improve.

Companies will throw away prohibitive business practices and engage in healthy competition, instead of creating monopolies.

In our version of the future, transparency improves everything. Shippers won’t worry about the safety of the cars being shipped, because of real-time updates on their product shipments. Carriers will be adequately paid on time for all load offers, because of automatic payment systems. Brokers won’t play phone tag or make excuses for late cargo, because they will know and communicate well with trusted, safe carriers for every load.

In our version of the future, the industry operates quicker and always in good faith.

As aforementioned, some industry players are already creating this change. More carriers have invested in independent companies, and educated themselves on proper industry business practices.

In May, Super Dispatch found what might have been a sign of industry change: there were over 50,000 cars on Central Dispatch. Ziggy Keller, a founder of IATA and moderator of AutoTransportEverything.com thought that this was a sign that haulers weren’t taking freight with too low of rates.

“Our industry is fragmented and splintered, until we educate each other, until we pay appropriately,” Ziggy said. “When I ask someone to move a car for me, I would never consider 11 cents a mile…. So until you educate carriers to the cost per mile, which we are starting to do, when they can understand their cost per mile, then they can fairly market their own services.”

In addition, some brokers are more transparent about their rates, and create lasting business relationships with their favorite carriers. Rates have begun to meet adequate standards for shipping costs. And as these trends continue, the market will continue to improve for everyone. It is possible to fight against monopolies, and carriers will be able to do so with new tools and industry standards.