Types of Trucking Contracts
The best type of trucking contract is a long-term or dedicated contract with a shipper or government contract. The type of equipment you have available to you—such as a hot shot, flatbed trailer, dry van, and reefer—will dictate what loads are available to you. These contracts are admittedly much harder to obtain, though, and you will likely not get them without having proven experience and great relationships directly with the shippers.
A rate confirmation is a much more common type of contract found in the spot freight market that all truckers will deal with on a regular basis. This is a contract for an individual load that dictates all the details from pick-up and drop-off locations, pay rates, etc. A dispatcher is efficient at this type of freight matching to keep you booked with the correct loads at the best rates while avoiding empty backhauls, also known as deadhead truck freight.
In summary, a dedicated contract is long-term secured work. Once you get that contract, you know you will have a regular and dependable business through that contract. Rate confirmation contracts, or spot freight, are one-off loads that are much easier for a small business or independent contractor to get on a regular basis.
Where to Start
As we mentioned, it will take time and dedication to obtain long-term contracts. Do not put all of your eggs in this basket immediately after getting your CDL; instead, focus on the contracts you can get right now and do a good job at them. You will be in a much better position to get dedicated contracts down the road as you complete loads over time and build working relationships with shippers and business owners.
When just starting out, your focus needs to be on regular cash flow. To keep up with regular cash flow you may also want to consider a factoring service to get you around the long payment terms of many shippers. To get contracts for individual loads as an owner-operator you need to start by looking at load boards, working with brokers, or working with dispatchers that can help you find loads that best fit you. Getting this process down and being able to repeat it will set you up to continue your business successfully in the trucking industry. Neglecting this is a huge part of what leads to a lot of carriers closing their doors.
To book your own loads, load boards, such as the DAT load board, are a common freight finding tool. This is something you can spend time on while sitting at a truckstop, but you need to focus on using the best load board that will give you real-time notifications of new loads that fit your criteria. Load boards allow you access to any broker or shipper (within the load board network) who is looking for your specific type of carrier to haul their freight. This allows you to cast the widest net to find customers, brokers, and shippers.
Load boards can be as different as the companies they supply. Before making a commitment to a load board, make sure you are getting the best service for your company. You want a load board with a large selection of your preferred lanes and a high demand for your type of equipment. Free trials are the best way to test the market before making a financial investment. (Note, some load boards do not advertise free trials but will offer them to you if you ask.)
Most of the loads posted to load boards are from freight brokers, but the best-paying loads are usually never posted. Having a good relationship with a freight broker and delivering outstanding service can result in becoming a preferred carrier, which means the broker will give you the first shot at some of the best-paying loads before they are posted to a load board. Always make sure to work with several different brokers, though. Freight rates constantly change, and you should always compare rates between brokers to make sure you are getting the best-paying loads for your business.
Prospecting for Trucking Contracts
Prospecting is the process of identifying and reaching out to potential customers in order to generate new business. For trucking companies, this can mean identifying and reaching out to businesses that need freight moved, such as manufacturers, wholesalers, and retailers. A good place to start is to research local businesses in your area that might need transportation services. Additionally, there are online databases and directories that can help you find potential customers, such as the government’s System for Award Management (SAM.gov).
Networking with other industry professionals and attending trucking conferences can also be effective ways to connect with potential customers and partners. Joining trucking associations and attending industry events can help you stay up-to-date on the latest trends and regulations, and provide opportunities to meet other professionals and establish relationships that could lead to new business contracts.
Utilizing a dispatcher is another option and can help you find good loads that you might typically miss out on. Dispatchers save you time by working the load boards or dealing with the brokers for you. Give them your business type and hauling expectations then they will find you the best-paying freight for the lane and freight you haul. If using a service like ProDispatch, the dispatcher will also fill out the broker packets for you, saving you even more time so you can focus on just delivering the freight.
Dispatchers can be especially helpful for smaller trucking companies or owner-operators who don’t have the resources to manage the logistics of finding and booking loads themselves. They can also be useful for larger companies looking to increase their capacity and take on more loads. A dispatcher can help you find loads you might not have access to otherwise, as they often have established relationships with shippers and brokers.
When choosing a dispatcher, it’s important to do your research and find a reputable one that has a good track record. Look for dispatchers that specialize in your type of freight and have experience working with carriers of your size. You should also consider the fees they charge and how they are structured. Some dispatchers charge a flat fee per load, while others take a percentage of the load’s value.
Another option is to use a dispatching service that provides access to a network of dispatchers. This can give you the flexibility to work with different dispatchers for different loads and avoid being tied to a single dispatcher. Some dispatching services also provide additional support such as help with billing and paperwork.
Regardless of which option you choose, working with a dispatcher can help you streamline your operations and focus on delivering loads instead of spending time searching for them.
Government Trucking Contracts
Government contracts can be an excellent source of long-term, steady work for trucking companies. The federal government and many local governments rely heavily on trucking companies to transport goods and equipment and frequently contract with private carriers to provide these services. However, the process of bidding on and winning a government contract can be complex and time-consuming. To get started, you will need to register as a government contractor on SAM.gov and research opportunities that are available for bid.
When submitting a proposal for a government contract, it is important to thoroughly read the requirements and follow all instructions carefully. Be prepared to provide detailed information about your company’s qualifications and experience, as well as pricing and logistics plans. Additionally, be aware that government contracts often have strict regulations and compliance requirements that must be met in order to maintain the contract.
Working with Government Agencies
In addition to bidding on contracts, there are opportunities for trucking companies to work directly with government agencies. For example, the Department of Transportation (DOT) offers a dispatching service that connects trucking companies with government agencies that need transportation services. This service can be particularly useful for small and medium-sized trucking companies that may not have the resources to bid on government contracts directly.
It is important to note that working with government agencies often requires additional certifications and compliance with specific regulations. Be sure to thoroughly research any requirements and ensure your company is prepared to meet them before pursuing this type of work.
Maintaining Positive Relationships
Once you have established a relationship with a customer or partner, it is important to maintain a positive and professional relationship in order to continue receiving business. This includes providing reliable service, communicating effectively, and addressing any concerns or issues promptly.
One effective way to maintain positive relationships is to establish a referral program. Offer incentives to current customers or partners who refer new business to your company. This not only helps to generate new business but also shows your appreciation for current customers and partners.
Fleet Owners and Startups
For fleet owners and startup companies, finding and securing trucking contracts can be particularly challenging. However, there are resources and strategies available to help. Brokers, load boards, and dispatching services can help connect you with available loads and customers, and networking with other industry professionals can provide opportunities for partnerships and referrals.
Additionally, it is important to focus on building a reputation for quality service and reliability. Positive reviews and referrals from satisfied customers can be powerful tools for attracting new business and building a successful trucking company.
In the highly competitive trucking industry, securing and maintaining contracts is essential for success. Whether through load boards, dispatching services, or government contracts, there are a variety of options available for finding and securing business contracts. By networking, prospecting, and maintaining positive relationships with customers and partners, trucking companies can establish themselves as reliable and valuable partners in the transportation industry.
To learn more about getting loads for your trucking company, give our team of trucking experts a call today! 913-393-6110