Trucking is an essential element of the commerce and supply chain infrastructure. With the continued growth of online shopping added to booming warehouse operations, there is high demand for trucking companies.
The sometimes difficult part of the trucking industry is finding and obtaining quality contracts, especially if your business is somewhat new. Though the service is certainly needed, starting a trucking business is relatively competitive. The most immediate concern for most start-ups is getting loads, and even better, long-term contracts. Equipped with the right tools and know-how, you can work your way into the industry with an advantage.
Types of Contracts
Let’s dive into the different types of contracts. Each one has its pros and cons, but being a revenue-based company starts with understanding and selecting from all of your options.
Rate Confirmation (Short-term)
Rate Confirmations, sometimes called Rate Cons, are some of the most common types of trucking contracts. As a short-term deal, these gigs are for individual loads that have unique parameters for each contract. All truckers should expect to have Rate Cons on the regular, especially for new businesses.
Long-term contracts
Long-term contracts are more ideal since you most often commit to regularly needed loads for an extended period of time. These contracts provide prolonged, reliable revenue, which is the ultimate goal. For new business owners, long-term contracts will be harder to acquire since other businesses need reassurance and proven experience for a commitment.
Government Contracts
You can also get long-term contracts with the government, such as FEMA loads. The FEMA (Federal Emergency Management Agency) and similar government groups will use subtractors to deliver aid for disaster relief. These contracts often go directly through a freight broker, so make sure it’s clear who is paying and have a paper trail of all transactions.
To make your trucking business profitable, regular cash flow is the goal in the beginning. As you kick off your business, focus on short-term contracts for realistic results. If you do the job well consistently, you can establish a positive reputation and growing network to eventually acquire some long-term contracts.
Consider Your Niche Capabilities
What can you offer that’s unique to your services? What are you interested in shipping? To figure out how to get trucking contracts over your competitors, it’s important to establish your brand to determine who you need to try and contract with.
Who Is Your Target Audience?
Connect with the right people that are trustworthy and interested in your specific service. You should also look for other businesses that aren’t getting picked up by larger carriers. Look for clients who:
- Pay accurately, fairly, and on time
- Give you contracts regularly
- Have a good reputation
- Fall through the cracks for big-name carriers
What Specialty Loads Can You Ship?
Figure out how to narrow down your services so that you can market something specific. This will greatly affect how you present your business and how you invest your money.
- Equipment: Investing in the right equipment is determined by your target client. For example:
- Perishable items such as food or meat would require trucking equipment with cold storage capabilities.
- Raw materials, such as pipes, steel frames, wood, and other construction materials often need flatbed trailers.
- Funding: Are you leasing or buying your equipment for your new business? It probably depends on the service you’re offering.
- National Funding can provide small business loans for semi-truck financing and other leasing equipment options to build your fleet.
Where To Look for Contracts
Load Boards
Load boards are a great place to start, especially if you’re looking for short-term contracts in your lane. Load boards directly connect you with shippers with current load applications. These are often lower-paying loads, but they’re typically easier to qualify for and have detailed, clean-cut requests.
Connect with Freight Brokers
Remember, though, that load boards aren’t the only way to get contracts. If you aren’t finding as much success using load boards on your own, try connecting with and reaching out to specific freight brokers. A freight broker is a middleman between truckers and shippers and can often do a lot of the negotiating on behalf of each party. As you make a name for yourself, freight brokers are more likely to take you on.
Build Connections for Future Contracts
Even if you don’t end up contracting with every person you network with, creating and maintaining connections is the best way to make a name for yourself and your business. Some connections may not initially seem relevant, but as long as you can provide the service and get a fair price for your work, networking is always a good move.
Research Shippers
Brokers are helpful, but they can be expensive, too. The most cost-efficient way to get contracts is to directly contact a client shipper yourself. These types of clients pay the most and most often lead to long-term partnerships.
Join Associations
By joining a trucking association, you can not only make important connections for possible recommendations, but you can also get the best insider tips and tricks from your peers. Plus, you’re far more likely to keep up with industry trends if you’re involved in events and discussions in your field.
Use a Dispatcher
Dispatchers are another third-party service that can be worth the cost when they can find better hauling deals for you. They can work out brokering, manage load boards for you, and more.
Loans Designed For New Trucking Businesses
National Funding understands how financially demanding starting a business can be, especially in the trucking industry. We see both your potential and the lucrative possibilities of trucking companies, which is why National Funding offers small business loans made to support exactly what you do.
Talk to a specialist today to find out what type of loan is best for you!