By Karen E. Klein Q: I have a one-ton cargo van, fully insured and bonded, and would like to start a small trucking business. I can haul anywhere in the U.S., but where do I find customers?
---- R.B., Conover, Wisc.
A: The challenge for all motor carriers is finding good freight and getting contracts that allow for steady work. Small, one-vehicle operations are a particularly tough proposition, experts say, because it's difficult for them to compete cost-effectively with the large, multi-vehicle fleet operations. Still, 70% of the trucking companies in the U.S. are small operators, running half a dozen trucks or fewer. What you need to do is familiarize yourself with the trucking industry and how it works, then research the marketplace to determine whether you can meet a viable need within the industry and realistically determine what kind of volume you'd have to do to break even.
You can gather some firsthand information by visiting a substantial truck stop in your area and looking for information posted there by "freight brokers" -- individuals or exchanges that match loads with carriers. Many of them focus on small trucking companies, says Gary Satterlee, president of Harbor Division Inc., a Wilmington (Calif.)-based trucking company. "There are extensive electronic bulletin boards conspicuous at all decent truck stops that the various brokers post their requirements on," he says. If you can establish your service with a brokerage, they may be able to direct jobs your way that you can leverage into repeat hauling situations.
GRAVY BOAT? To get the word out about your service, you may want to get listed in commercial directories such as the North American Truck Fleet Directory, which includes detailed information on more than 40,000 fleets. The directory is available as a book or a searchable database, says Bob Costello, chief economist for the American Trucking Assns., an industry group based in Alexandria, Va. You can find out more about the directory and the trucking industry in general from the ATA at its Web site, www.truckline.com, or by calling the group at 800 ATA-LINE.
You may find, however, that a one-truck operation has extreme difficulty competing against freight carriers specializing in "less-than-truckload" (LTL) jobs. These companies have large-capacity fleets and will sell portions of their space at reduced rates to several customers, enabling them to move the same loads that you would handle for about what you might pay just for fuel.
What you need to do is find a niche where your service can fill an unmet need. One idea that Satterlee suggests you explore is specializing in boat transport. "Contact all the boat yards and yacht sales facilities in the Great Lakes region," he says. "With a good van and a universal/adjustable boat trailer, you could tow some very large boats and use the cargo space for tackle and accessories." Have a question about running your business? Ask our small-business experts. Send us an e-mail at email@example.com, or write to Smart Answers, BW Online, 6th Floor, 2 Penn Plaza, New York, NY 10121. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.