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Does Van Dusen v. Swift Transportation affect Contractors in Car Hauling?

Header image by photographer: Joe Ravi, license CC-BY-SA 3.0

After a decade-long class action lawsuit, the large trucking company Swift has settled out of court regarding an owner-operator misclassification lawsuit, Van Dusen v. Swift Transportation.

Swift, one of the largest trucking companies in the United States, will pay out $100 million to 19,000 truck drivers in a settlement. Most of its operations are dry van, but Swift also participates minimally in the car hauler trucking niche.

The Background: Misclassification of “contractors” has been happening across the country in many industries, especially as the gig economy has taken off in recent years. Lawsuits have been cropping up everywhere, but the trucking industry seems to be leading the conversation due to its unique operations. In Van Dusen v. Swift, a group of 19,000 truckers claimed that Swift was working them as employees without the benefits and taxes awarded to employees, and? with all the liabilities of contractors.

This is yet another lawsuit fought in the last decade regarding employment and federal classification in trucking. Due to the dynamics of the trucking industry where there are huge trucking companies with thousands of employees, numerous small businesses (known as owner operators) and a constantly changing volume of freight, misclassification is common.

Contractor, Owner Operator or Employee?

For instance, in car hauling, a new car hauling business can start up with a single Owner Operator who is the owner and driver. For him to fill his trailer with cars to haul, he needs to find a dispatcher, a broker or a load board. For ease, he might get a “dispatcher” at Company A to avoid a brokerage fee. This dispatcher might hire him as a 1099 “contractor.” This Owner Operator has started his own business and has an authority – he is not a W-2 employee. But if Company A needs him to haul for them 40 hours a week. Additionally, he is not allowed to pick up loads from other companies while in this contract, and/or he is not allowed to turn down loads from Company A. This places undue restrictions on his employment, and categorizes him as an employee instead of a contractor.

Contractors can cost less to employ than an employee, because they pay their own employee taxes and benefits – being that they are their own business. But as they are their own business, they are entitled to certain freedoms, from dress code to hours worked. The Department of Labor has a detailed list and some fun infographics on what differentiates an employee from a contractor.

Does this matter for car hauling?

Super Dispatch has written in the past about a recent trucking Supreme Court case affecting us in the car hauling industry. This case will have a slightly larger impact.

Not only does Swift specifically operate in car hauling, but other car hauling giants face similar court cases – some are already in litigation.

While all of these court cases may not be directly linked to each other (arbitration, leasing issues, job misclassification) they are all a sign of the changing landscape in the American economy and trucking more specifically.

Does New Prime vs. Oliveira mean anything for car hauling?

(header image by Joe Ravi, license CC-BY-SA 3.0)

Last week, the Supreme Court ruled in favor of owner operator contract truckers in the case New Prime vs. Oliveira. Though it was a company that hauled generalized freight, this could have ramifications in car hauling.

This matter is nuanced, so bear with me on the details – they are important. While it does sort of have to do with the misclassification of employees as independent contractors, no real decisions were made about misclassification. It was all about a little something called “arbitration.”

The Background: Oliveira was an independent contractor working for the Missouri freight company, New Prime. Over the course of his contract, he believed that New Prime was unfairly taking advantage of his independent operator status by using him as an employee, but deducting too many costs from his paycheck. He eventually quit.

The Original lawsuit: Then, in classic American fashion, Oliveira decided to sue New Prime for misclassification of employment. New Prime, also in classic American fashion, tried to force the suit out of the courts through the required Arbitration clause of Oliveira’s contract.

That’s what this Supreme Court case was actually about: Arbitration.Oliveira vs. New Prime and how it affects car hauling eBOL-Marked-Damages

“Arbitration” is a type of legal mediation written into some contracts (usually consumer, like when you buy a car) that states if you have any trouble with your product, you can not sue the company, you must open a dispute through a mediator. This is a fast alternative to a legal court, which allows a mediator to settle a dispute, instead of a judge. The only problem is, arbitration is final; no appealing to a higher court if you don’t like the outcome.

A second problem is that in many arbitration contracts, the signatory does not get to choose the mediator. It’s kind of like entering a competition where all the judges are picked by your top competitor. How would you ever win?

So what – you might say. Oliveira signed the contract with the arbitration clause, so who cares? It’s his fault for signing away his right to a lawsuit.

Yes, but this wasn’t technically (legally) voluntary. There are two kinds of arbitration: voluntary and forced.

Voluntary arbitration can be beneficial, like in an amicable divorce (if there were such a thing.) Whereas forced arbitration, like the clause of Oliveira’s contract, can potentially be problematic if one party (New Prime) created the forced arbitration contract.

The United States happens to be an arbitration-friendly country, and the US also happens to have a law called the Federal Arbitration Act (FAA), which makes it easier for companies (especially employers) to ensure that courts enforce the forced arbitration sections of their contracts.

BUT the FAA has one caveat. It stipulates that employers MUST EXCLUDE “contracts of employment of…workers engaged in…interstate commerce.”

New Prime argued that because Oliveira was an independent contractor and not an employee, he was not “in contract of employment” and thus did not qualify for the exemption.

Are you with me so far?

So this Supreme Court decision was about whether or not Oliveira had to go through arbitration – or if he was allowed to sue New Prime.

“So this Supreme Court decision was about whether or not Oliveira had to go through arbitration – or if he was allowed to sue New Prime.”

And the Supreme Court decided unanimously that Oliveira’s arbitration clause was not binding, because he obviously was in a contract of employment that included interstate commerce, according to the Federal Arbitration Act.

Oliveira’s next move will likely be to begin his lawsuit against New Prime for underpaying and misclassifying him as an owner operator. If his claims are to be believed, it’s possible he could win. Of course, it will be months or years before that decision is ever made.

What does this mean for trucking – especially car hauling?

Arbitration clauses exist in car hauling as well. Some of the largest employers of owner operators in car hauling have arbitration in their contracts. This can affect any lawsuit that drivers may have against their employers in the future.

Also generally, this is seen as a win for contract workers. Oliveira is a very narrow ruling, so it’s unlikely that it will set a precedent (because it’s unlikely that anything else will be brought to the court involving both arbitration and independent contractors) but it’s a win nonetheless.

Are there lawsuits in car hauling that this ruling is going to affect right now?

None that we know of. If you know of any ongoing lawsuits that this might affect, let us know in the comments! Or tell us what you think of the ruling, or if you have an arbitration clause as an owner operator.

Paper vs. Paperless: How technology is improving car hauling

A few weeks ago I was on the ground at Manheim Kansas City, talking with some car haulers about the industry. It struck me when Dan of DHI said:

“I think we get away from talking to our customers, more now. They say “here you go, here’s the load – it’s all on your app.” And we don’t talk no more. We used to talk all the time. I mean this load here… I’ve had to work to get it loaded, and I don’t even know the customer.

Dan doesn’t use Super Dispatch, but this is a sentiment I have heard more than once. I have also heard the opposite expressed: our customers have said that people still run the computers, and nothing will take away from the relationships you have today.

These arguments are just an extension of the question: is technology any good for car hauling?

We think it is. And here’s why:

It helps you move fasterSuper Dispatch and other technology helps car hauling. Get the free app

Car haulers are constantly out of time – not enough time to load, to haul, to finish paperwork. A car hauler can only load or drive so fast, but shortening paperwork is possible.

Haulers save hours on paperwork after switching from paper to Super Dispatch. Sometimes they save time by simply not training their drivers to fill out endless paperwork.

“Just since I’ve taken on Super Dispatch I’ve been able to go from 1 truck to 3 trucks. Just based on eliminating paperwork,” Jamie Glass of Glass Hauling said. “If I had to train a guy on a 3 part carbon copy bill of lading, you’re talking at least 15 pieces of paper at least for 3 cars. Then double that coming home. That’s 30 pieces of paper to keep track of, for one driver.”

With Super Dispatch, car inspections can be done in minutes. These car inspections include time stamped photos, marked damages, completed BOLs, and customer signatures. Once finished, that completed inspection and invoice can be emailed to your dispatcher, broker or customer immediately. That means no end-of-day faxing, mailing or emailing. When the cars are unloaded – your paperwork is already done.

“Just since I’ve taken on Super Dispatch I’ve been able to go from 1 truck to 3 trucks. Just based on eliminating paperwork.”

It helps you stay organized

Auto transport requires finding loads, creating trips, dispatching loads, loading cars, inspecting cars, completing legal work, invoicing customers, paying taxes, and paying yourself or your employees. Actual driving might define the job of a car hauler, but it is the part of the job that requires the least energy and thought.

Technology like Super Dispatch allows Owner Operators and fleet managers alike to save time and energy by organizing their business for them.

Without all the paperwork, and the drivers trying to find a fax machine after a load, I save at least an hour a day not worrying about paperwork,” Tiko, owner of the fleet Cars Inc. said. He also estimates that Cars Inc. saves an hour per day per worker because of Super Dispatch’s streamlined electronic BOL and invoices.

“Without all the paperwork, and the drivers trying to find a fax machine after a load, I save at least an hour a day not worrying about paperwork.”

Also, all activity is logged in Super Dispatch. If your driver can’t remember sending the invoice, check the load activity log. If a dispatcher needs to change a pick-up or delivery location, all changes are immediate and notify your driver. This internal organization means that car haulers who use Super Dispatch appear more organized to their clients.

“I use Super Dispatch to process loads for small individual brokers… and they’re all thrilled every time I do that because they have the photographs with damages marked, the invoicing details and so forth,” Owner Operator Chris Routh, of Blue Moon Transit said.

It helps you understand your business

Super Dispatch has reporting features like Accounts Receivable, Accounts Payable and Company Revenue, so you know exactly where your money is at all times. Fleet managers can calculate driver pay with Driver Pay Reports. Rather than hunting down invoices and BOLs, Super Dispatch keeps everything in one place, easily searchable.

“A lot of these guys are not computer savvy…they lose a lot of money because they lose track of who owes them and who doesn’t owe them.”

“A lot of these guys are not computer savvy…they lose a lot of money,” Reg Bravo, Owner Operator of X2 Transportation said. “I talk to these guys all the time. They lose a lot of money because they lose track of who owes them, who doesn’t owe them.”

A few years ago, technology put you ahead of the game in car hauling. But now, technology is the new normal. Without it, car haulers bleed money every day.

We often say here, that successful car haulers use Super Dispatch. Start a free trial on Super Dispatch’s website to see how much you can improve your business.

BacklotCars reaches faster car transport times enabled by our Shipper API

Like Super Dispatch, BacklotCars set out to disrupt a long-standing part of the automotive industry. With Super Dispatch focused on modernizing automotive logistics, BacklotCars is focused on modernizing automotive wholesale.

Four years ago, founders Justin Davis and Josh Parsons were working at Manheim Auctions. They saw a broken system – limited access to inventory, capital and inefficient transport.

Justin and Josh created BacklotCars, as an alternative to brick and mortar auctions. BacklotCars is connecting dealers across the United States and quickly becoming the easiest way for stores to both source, sell, transport and finance wholesale inventory. Both Super Dispatch and BacklotCars continue to disrupt long-standing industries.

Justin and Josh created BacklotCars, as an alternative to brick and mortar auctions.

How BacklotCars is different

“Originally, most dealers would go to local auctions to buy and sell cars. What we did was turn it into an online marketplace, without the physical location,” Sean, the Director of Transportation said to Super Dispatch. “This allows them to purchase inventory outside of their particular region. So for example, if I’m in Kansas City, I’m not limited to the local auction. I can purchase cars across the country.”

As BacklotCars opens up new trade opportunities for dealers, transportation becomes important. That’s where Super Dispatch comes in.

BacklotCars runs auto transport different than traditional load boards and auctions because of the technology it utilizes. Now auto dealers across the country can transact without stepping foot on an auction floor, or worrying about transporting their purchases.

As BacklotCars opens up new trade opportunities for dealers, transportation becomes important. That’s where Super Dispatch comes in.

Changing the game of auto transport

Before Super Dispatch, employees at BacklotCars would have to manually enter everything into spreadsheets. Sean had to type VIN numbers, condition reports, instructions, delivery and pick up information into their backend system and then post vehicles as loads on the Central Dispatch load board. A single morning’s worth of car sales could take a business day to type and post online for car transportation companies to find.

Before Super Dispatch, employees at BacklotCars would have to manually enter everything into spreadsheets.

“If we sold 50 cars a day, we would manually enter them on the load board or send them over to our partners using spreadsheets,” Sean said. “Which as you can imagine, is very time consuming. So sometimes the car that sold at 8 am wouldn’t get posted and shipped out maybe for a day.”

How BacklotCars ships cars in wholesale

Before Super Dispatch helped BacklotCars post loads and match carriers, auto transportation could take 10-14 days. With Super Dispatch, 80% of loads dispatched through Backlot are delivered in less than seven days, and 65% are delivered in less than five.

The BacklotCars sales team has successfully leveraged the reduced transport time to appeal to a wider range of customers.

“In sales when they’re promoting, they say ‘Hey, we can get your cars to you in 3-4 days.’ That’s a big promotion for people that are in our buy space,” Sean said.

That’s because Super Dispatch cuts their manual work in half by integrating with BacklotCars backend marketplace technology. Now, they only need to enter information for a car once – in their own system. Once that car is sold, its information is sent to Super Dispatch through the seamless API integration.

Super Dispatch cuts their manual work in half by integrating with BacklotCars backend marketplace technology.

From there, the BacklotCars team organizes the individual vehicles and send load offers to preferred carriers within their network.

“It just auto-posts everything the minute [a car] sells, because it’s already out there…we shoot it straight over to Super Dispatch.”

The connection to the API means that BacklotCars can offer loads to trusted carriers without ever calling them – instead, the carrier gets a text and email with the load information, which they can choose to accept.

If a load can’t be taken by their preferred carrier, they can still avoid the cumbersome load-posting process on Central Dispatch.Super Dispatch API makes it easy to post to Central Dispatch when you need.

The connection to the API means that BacklotCars can offer loads to trusted carriers without ever calling them.

Also, the logistics team can easily determine if a car was damaged in transport by reviewing the electronic Bill of Lading and inspection photos. Plus they can give ETAs to customers when loads are automatically marked as picked up or delivered.

“First thing I do every morning is I track vehicles that are assigned to specific carriers. Let’s say they were supposed to be picked up over the weekend, let’s say there was an issue and it didn’t get picked up, I see that,” Sean says of the Super Dispatch dispatching tool. “So we can communicate that quickly with our customers.”

What’s next for BacklotCars?

Because Sean and Julie no longer spend their entire day posting loads to load boards, they can focus on other things; expanding their transport region, optimizing trade routes and creating carrier contacts.

“On the accounting side we went from about 9 hours of paperwork to about 15 minutes,” Sean said. “As far as the load posting, if we had 50 cars to post, I would post from when I got to work to when I left.”

“I did other things in between, but most of that time I spent posting. Now I don’t post anything. It’s out there already. I’m able to look at new routes, create partnerships with new carriers. Things like that.”

In the next year, Backlot hopes to reduce 80% of their loads to a 5 day turnover time.

Super Dispatch is planning big things for 2019 as well.

Eventually, Super Dispatch will be an end-to-end unified vehicle shipping platform for car haulers, shippers and brokers, which will enable better communication throughout the entire industry.

In the near future, Super Dispatch will become the largest vehicle shipping platform – for brokers, carriers and shippers alike. The largest network of car haulers, shippers brokers will be available in Super Dispatch’s Broker and Carrier TMS. Through tools like our Smart LoadBoard and Carrier Vetting, our platform will automate, digitize and provide visibility into the entire vehicle shipping process, all within one system.

Eventually, Super Dispatch will be an end-to-end unified vehicle shipping platform for car haulers, shippers and brokers, which will enable better communication throughout the entire industry.

 

Conversations at Manheim Kansas City

To stay close to our customers and the car hauling industry in general, Super Dispatch regularly steps out of the office to ask people what they think: about our product, about the industry, or about anything that is topical for the people we create our product for. This week at Manheim Kansas City, we spoke with Dan, Owner Operator of DHI and Ty, CEO/Owner Operator of Cars on the Move:

Who are you and what is your company?

DAN: My name is Dan, from DHI. I own 3 trucks, I’m a fleet owner. I’ve been doing this for 8 years. I got into car hauling because I wanted to be home more. [laughs] I truly did. I did this because I owned an environmental cleanup company for the government. I owned a construction company. I did that for 12 years. I was on the road, Monday – Friday every week, so I looked at stuff and that’s how I got into it. It was supposed to be just me, one truck one trailer, that’s it. Now I got three of them, and I’m looking for a fourth. Ty is number four [laughs.]

What’s the hardest thing about the industry so far?

DAN: [laughs] I can’t say that…Probably fuel increases. I don’t know, it’s gotten kind of cut throat. What do you think, Ty?

TY: There’s nothing easy about this job.

DAN: Guys don’t work together anymore, like they used to when I first started. And I haven’t been in it for that long. Ty has been in it for a lot longer. But I don’t think guys work together as much as they used to.

Do you have an example?

DAN: Oh, I do. But I’m not going to… 

TY: Yeah, stay out of politics.

DAN: Yeah, the thing is about car hauling…is if you make a bunch of enemies…it’s a small circle. Yeah, there’s a lot of people that don’t know each other and if you start screwing up that circle… Oh yeah. It’s a tight-knit group. It’s a niche market. So you don’t want to make a bunch of enemies.

So Ty, you have worked here longer…how long have you been in?

TY: 19 years.

DAN: See? I told you, I’m just a punk, a little rookie! This guy is a legend.

TY: Yeah, I drive. I got a truck…a big rig. [laughs] I got a big one. That’s not quite as nice as the other 20 big rigs semis I had. I had a fleet of 20 new Peterbilt’s, sold out and I’m now starting over with one not so new big rig.

So do you also agree that is the hardest part of the industry? The lack of camaraderie?

Ty Thompson DHI Car Haulers Super Dispatch Manheim conversation eBOL app

Ty of Cars on the Move explains a point to Super Dispatch on the Kansas City Manheim car lot on November 8, 2018. Dan and Ty are Owner Operators and seasoned Car Haulers.

TY: I think that’s the biggest one.

DAN: That makes a big difference. Life is a lot better if everyone gets along, right? I don’t know, what do you think the hardest thing about car hauling is?

TY: It’s all the new apps – that are gonna fix everything. Like Super Dispatch! [laughs] Here’s another app, that will make it better. I’m into relationships. I miss that, I miss the relationships.

DAN: To me, what Ty said, that’s really accurate. I think we get away from talking to our customers, more now. They say “here you go, here’s the load – it’s all on your app.” And we don’t talk no more. We used to talk all the time. I mean this load here… I’ve had to work to get it loaded, and I don’t even know the customer.

And you used to know the customer?

DAN: Well, we did. It was on paper, so it was more personal. You used to walk in, and say “I need your signature” now it’s like walk in and you barely get your phone back.

TY: And you know, the network that you’re talking about is…it’s exactly right. It is a network. The problem is if you minus the people – what kind of network do you have? I’ve just got an app. That’s all.

DAN: Right. I don’t like it because I’ve had problems with other companies with apps. You know what I mean. I’ve companies where I do their app, and it is required to get delivered, and then when it comes time to get paid, all of a sudden “oh our app went down…you need to get a bill of lading signed.” Like what? That load was last week…Yeah I mean lucky for me I don’t get hurt, because it’s been mostly Kansas City and St. Louis where I run a lot. But it’s like…I can’t get that paper now. I’m a fan for and against apps, you know. They help and they hurt.

TY: I mean Super Dispatch app, or any app, it’s always okay. But it’s like – what happened to picking up the phone? I miss that.

DAN: Yeah I like that. I mean, It’s good for my biggest customer. Can you imagine all the Bills of Lading I’d have? All the stacks of paper? Because with my company, we do about 5-600 a month for one customer. So the app works good, for them. That’s handy.

TY: Yeah, plus you can still go in there and talk to them.

DAN: Yeah, but it would be hard to keep track of all that paper.

So maybe it’s better for existing relationships, but for new ones it’s almost made it worse?

DAN: It can. And you know, some of these guys are old school. I say I’m right on the cusp of the technology. I can really have a hard time with it, or I can make it real easy. But I got one driver, he’s a great driver, doesn’t tear anything up, but he struggles with it, in his 50s. There’s no doubt in my mind…you know I’ve never had to call that guy to see if he needs help, if he is going to make it to work on time or whatever – like I have with other people [laughs] – but he struggles with the technology side.

TY: And that’s what’s crazy too. You know there is a driver shortage, let’s make it worse by making it harder for the old guys.

DAN: Yeah, that’ll keep them!

We really enjoyed speaking with Dan and Ty (among a few other car haulers that we at Manheim Kansas City this week.) Tell us in the comments what your biggest challenge in the industry has been. Do you agree with them that camaraderie has broken down in the last decade? Or are all the apps what bothers you? Or is there something else?

Let us know! As always, thanks for reading.

Manheim Kansas City. Super Dispatch is the best eBOL and VIN scanner of any car hauler TMS

Super Dispatch has the best VIN scanner of any car hauler mobile app around. Click on this photo to download the free mobile app and TMS to test our text, barcode and QR code scanner.

 

 

TOP 8 things car haulers need to know before getting insurance

Your insurance is as important as buying or financing your truck and trailer, like we covered in our last posts. Because car hauling insurance can differ greatly from traditional truck insurance, Super Dispatch found an expert to help explain the process.

Brian Riker owns Fleet Compliance Solutions, which is a trucking consultancy that specializes in car hauling and towing. Due to his 30 years of experience in the truck and towing industry, he can help any new Owner Operator get their authority and wade through compliance violations.

Here are the 8 things Brian thinks are most important when shopping for truck, trailer and cargo insurance policies.

1. Read your policy well

Comprehensive cargo insurance is really what makes or breaks a car hauler with a brand new authority. But with all three of your insurance policies (truck, trailer, and cargo insurance) make sure to read your policy WELL. Ask questions like:

  • What is your monthly cost?
  • What is your deductible?
  • What does it cover?
    • Acts of god?
    • Collision?
    • Does it have Auto Hauler Constructive Total Loss?
    • Does it cover over-height loads?
    • Does it cover diminished value?
    • Does it cover burglary or vandalism?
  • Restrictions on coverage?
    • What ISN’T covered?

If you can’t read a policy inside and out, you might need to revisit being an owner-operator or get a consultant like Brian Riker. He sees the same situation happen over and over again with specialized freight haulers.

“One guy gets quoted $25,000 and the next guy gets $10,000. They think they have same coverage because they have the same million-dollar public liability for $100,000 cargo,” He says. “But what they don’t realize is that one of those policies might have a high deductible. Or one of those policies might have a lot of exclusions. So you really need to look at your policy to make sure it’s covering what you need.”

2. Make sure you have relevant car hauling experience

Brian Riker Super Dispatch Insurance quotes car hauler

Brian Riker, owner of Fleet Compliance Solutions

Most insurance companies won’t touch a new trucker unless they have had at least two years of driving experience with a fairly clean record. But car hauling is not like hauling general freight, and thus the insurance market for car haulers isn’t the same either. “Relevant experience” is one of the biggest factors in determining the price of insurance – emphasis on relevant. If you are a trucker with plenty of experience in general freight driving a dry van – don’t think that will cut it. Even with a decade of experience, general freight means little to a car hauling insurance agent

That’s because the defining traits of car hauling are: open air cargo, the need for chains and straps to secure and a hard to maneuver trailer. This kind of freight is higher liability and requires skilled maneuvering.

“To show that you have relevant experience, you need show you have operated open-deck carriers.” Riker says. “Like flat beds or low boys hauling equipment. And if you can document that, you can get more affordable insurance.”

3. Credit is a bigger factor than anything

“It shouldn’t be, but it is,” Brian says.

Insurance is ultimately a bet that you won’t cost your insurer more money in an accident than you can pay in premiums. Which means your credit is an important factor – they need to know you’ll pay on time and cover your deductible when the worst happens. When starting a business, good credit is necessary.

4. Watch out for towing insurance

eBOL super dispatch insurance blog car hauler Towing insurance can be problematic in a number of ways for car haulers. First, some insurance agents or groups will try to “upsell” new Owner Operators on extra towing insurance to accompany their liability and cargo insurance. This extra coverage will cost an Owner Operator more money, but basic towing insurance comes standard with many policies. An insurance agent might push for a more comprehensive towing plan because it will save an insurance company money on towing fees in the case of an accident.

Another issue is an agent issuing towing-specific insurance instead of car hauling-specific insurance. It will be cheaper, but it won’t cover nearly what is needed for a car hauler. Sure, a car hauler can operate with towing insurance but will likely be turned down by brokers and is putting himself at risk in the process.

.“It looks the same to the FMCSA on paper and it will get an operating authority,” Brian says. “But when they have an incident or they are transporting a vehicle across state lines, it may not cover your damages.”

5. Shop early, shop often

“I see guys put the cart before the horse, so to speak,” Brian says. “They’ll apply for an authority, and when they need the insurance filed, they’ll get stuck taking Progressive or what I call “providers of last resort” because they can’t find insurance anywhere else.”

Just like our first tip explained, the difference in insurance plans are up to the discretion of the agent. Shop around and gauge what your best deal is.

6. Have enough money for your deductible, always

“I charge $695 to start your initial authority, with $300 of that going to the FMCSA filing fee,” Brian says of his consultancy. So, I make $395 doing all the paperwork. And there are people that have to put that on a credit card because they don’t have $700 cash or in the bank to write me a check. And they’re trying to start a brand-new trucking company.”

This should be a given for all financial aspects of your new business, but always have cash in the bank for unexpected problems. Especially in car hauling where the liability is high, have at least the amount of your deductible in the bank at all times. Yes – that’s means at least $5,000- $10,000.

7. Stay away from captive agents

Much like “Shop Early, Shop Often” you must also “Shop Variety,” according to Brian Rikers.

“Stay away from the guy who can only write Progressive or can only write Farmer’s. You want to go to a “multi-line” agent because they can go shop among dozens of different companies to find you the best,” Brian advises. “And he’s the one who will probably choose from different underwriters what gets you the best rate.”

8. Have a plan

Brian Rikers is a person that helps Owner Operators plan, so that’s  his ultimate advice for new Owner Operators – make a plan for every aspect of your business,not just insurance.

“Have some customers ready, don’t just expect to get loads off the broker boards. Have an idea at least where you are going to get your customers, and have money in the bank,” Brian says. “Have cash put away. Don’t get in a hurry when you want to start your own company.”

Was there anything you wanted to know about insurance that we didn’t cover? Do you want to know more about deductibles or captive agents or the different types of insurance? Let us know in the comments!

 

Super Dispatch listens to feedback at AHAA

The bi-annual Auto Haulers Association of America Conference was in Fernandino Beach, FL. this fall, and Super Dispatch was happy to be in attendance for the second time ever.

Earlier this spring, we made a blog post about the ultimate takeaways our company had from the AHAA conference. The key difference between the fall and the spring was the amount of in-depth feedback we were able to get from all of the carriers at the conference. In the spring, we walked away from AHAA with a lasting impression about how time consuming it is for carriers to run a car hauling enterprise. This fall, our biggest takeaway was the extensive feedback we got on how carriers business needs change as they scale up. We were happy to hear that carriers really appreciate how focused Super Dispatch is on implementing their feedback, and we were surprised that it was not more common place.

Trucks and Trailers: financing as an Owner Operator

Financing your Car Hauler Dreams

If you just decided to make the jump into your own operating authority, you know money is a primary hurdle. Specifically, finding out where to get it.

You might’ve scrounged up the money for a CDL, training and testing. Now you can take the extra thousands you have laying around to buy yourself a shiny new truck to start hauling with, right?

Of course not! Here in America straight cash will get you anywhere you want – but 20 or 30,000 is a lot to cough up all at once. That’s why we have financing options. So how does a car hauler get the best deal possible, without being swindled?

What you need to finance a truck and trailer

 You will need to have a minimum 2 years of experience driving.

You will need to have a minimum 2 years of experience driving. That means they will pull your CDL and check your haul references to verify that experience

In addition to having a long driving record, you will need to put down at least 20% upfront and maintain a good credit score.

Some truck leasors will do deals with drivers who have credit below 600, but the lessor will end up paying thousands more and have to move through a secondary market.

While credit score is the primary factor in financing your truck, companies will watch out for other signs of bad credit. If an owner operator has 2 bankruptcies, 3 repossessions and can only put 5% down, they likely will not be financed.

Some factors – such as repossession – weigh heavier against your chances of getting a loan than a lower down payment.

How do I know if it’s a good deal?

There is no such thing as a bumper to bumper warranty in commercial trucking.

Unlike Consumer equipment, there are few financial protections in place for Commercial equipment once a contract has been signed. But there are signs Commercial Operators can be aware of before committing.finance truck trailer car hauler

There is no such thing as a bumper to bumper warranty in commercial trucking.

Just read your contract, because the contract is going to specify exactly what is covered. People will compare it to a new car.

The only conversation that is said about the warranty is when the customer asks about a warranty and a sales person will say ‘yes, this has a brand new warranty.’ That might lead a customer to think they mean bumper to bumper coverage, but they didn’t say that. There is no such thing as bumper to bumper coverage in semi truck land.

A Consumer Protection lawyer in Kansas City, Bryce Bell, has a few suggestions on auto loans that are applicable to commercial financing.

“Bait and switch financing agreements are a big one,” Bryce says. Bait and switch is a tactic where a salesperson “pre-approves” the percent of a lease agreement (say, 10%) on the spot, pending some official approval from the bank. This makes the consumer feel like they already have a great deal on a new car. Then a week later, the sales team calls back saying the bank didn’t approve it at 10%, but the dealership found another place that could approve it on the spot for 20%. Now the customer is more likely to accept this bad offer, because for a week they were sure it was as good as bought.

Beware of red flags before you sign the contract.

Be sure to read the fine print of everything 5 times before you sign anything. Any contract comes down to – if you signed it, you own it.

How to keep a truck and trailer

Finally, once you have the truck, how do you make sure you keep up on those payments? Trucks aren’t going to run themselves (yet.)

Many Super Dispatch customers say the most common problem a trucker faces is unexpected maintenance costs.

Many experienced drivers think that new trucks are made worse, due to new government regulations and emissions standards. According to some SD customers, a truck can be running fine, but the check engine turns on.

If you’re an Owner Operator, try saving 5% of every load or a portion of your monthly income for future maintenance costs.

How have you financed your truck? What was your experience? Let us know below!

 

 

What kind of trailer should a beginning car hauler get?

Deciding your truck and trailer combination can be tough for beginning car haulers. Should you choose a tractor and double decker trailer? Do you get a Ford F450 and a wedge? These questions require a lot of thought. For a first time hauler, it is hard to make a decision. At Super Dispatch, we think the most important consideration for a beginning car hauler is trailer capacity.

How to decide what trailer size to buy

We created a flowchart to help you choose the best size trailer.

“Do you have a CDL?” is the most important question to start with:

Super Dispatch trailer CDL new to car hauling

 

Clearly, most of this decision will rest on the type of cargo you decide to haul. In this industry, certain cargo goes best with only certain kinds of trailers.

Best trailers for different kinds of car hauling

  • New cars are a high volume market and require larger trailers manned by experienced haulers.
  • The exotic car hauling market prefers enclosed trailers for extra protection.
  • Personal Vehicles shipping requires residential delivery so smaller trailers (attached to trucks instead of tractors) are more commonly used.
  • Tractors have fifth wheel steering and air brakes and thus can only be driven by CDL licensed commercial drivers.
  • Airport vehicle moves are some of the highest volume section of the industry, which requires large trailers (7-11 car haulers.)
  • Inoperable cars usually require forklifts to be moved, and can not be easily put on large double decker trailers.

The best all- around car hauling trailer

If you still aren’t sure what kind of hauling you will do, there are versatile trailers. Joey Slaughter, owner of Blue Ridge Transport LLC and author of The Beginner’s Guide To Auto Transport, suggests that new drivers buy trucks with 3 car wedge trailers.Super Dispatch BOL eBOL buying a trailer car hauler

“If you’re just beginning and have no equipment, I suggest starting with a three-car wedge trailer,” he writes. “It’s a reasonably inexpensive way to get into the auto transport business. I bought a new, three car trailer for approximately $7,000 and a used Dodge 3500 dually for $18,000 when I started. It’s easy to keep a three car trailer full, plus it’s a lot easier to maneuver in residential areas where a lot of deliveries are made.”

Super Dispatch’s product manager Vin agrees with Joey. He started hauling on a three car wedge in 2012, because of the easy profit margin.“If you can start with a three car, the first two cars will cover the cost of operation, and the third car is complete profit,” Vin says. Generally, only experienced car haulers can drive large capacity trailers. But do well hauling 3 and 4 cars at a time, and you will level up to hauling 7 or 11 cars quickly.

Stay tuned next week for our second piece about buying trailers! We will cover financing options, red flags to look out for and best buying practices.

A Guide to Shipping a Vehicle: a shipper’s perspective.

Not so long ago, I was reading car hauling-related blogs on Medium, and came across “A Guide to Shipping a Vehicle” by Brenden Mulligan.

He described his first experience ever shipping a vehicle across the country. And it was not great. He starts:

“I recently shipped a car across the country for the first time. My car ended up showing up filthy in darkness with $2,500 in damage which I didn’t see until the next day.

It was a confusing thing to set up. I imagine many people shipping cars have never done it and probably won’t need to do it again. So basically, the industry can take advantage of first timers.

Here are some things I wish I’d done differently:


  • Decide if you want open or closed transport. Open means the car will get very dirty, but it’s a lot less expensive and generally more available. Closed means the car is inside a container. I wish I would have done closed only so when the car arrived, it was clean.

  • Have the person on the pickup side take a zillion photos, send you a list of any and all damage that the vehicle had at pickup, and a photo of the pickup Bill of Lading, which is the document that is used to state the condition of the car. Know this inside and out so when it arrives, you know what damage is new.”photo inspection ship a vehicle BOL eBOL Super Dispatch car haulers

With just one experience in this industry, an individual vehicle shipper is advocating exactly a technology like what Super Dispatch offers.

Though his experience is from a completely different perspective than what we normally hear at Super Dispatch, he came to the same conclusion we have. Mulligan not only advises direct contact with the Carrier, but also photo inspections, and checking in on the location of your shipment. Our focus was on fixing the communication problems and headaches for the Carrier. But in doing so, we have begun to fix the problems on the shipper’s side as well.

Continue reading the rest of the article over at Medium….