Different strategies for different situations

Trailer dimensions, axle configurations, and cargo requirements can determine which third-party loads are practical for private fleets.

Key takeaways

  • Private fleets can use backhauls and local shipper relationships to generate revenue from available truck capacity.
  • Trailer dimensions, axle configurations, and cargo requirements shape which third-party loads a fleet can accept.
  • Fleet location and driver pay structures influence freight strategies, rates, and opportunities to reduce empty miles.

If the fleet’s truck garage is in a rural area and away from major transportation lanes, there will be difficulty finding third-party loads with trustworthy brokers, as they tend to take clients with a larger presence, typically on the major transportation lanes. It will be especially difficult to find backhauls with low out-of-route miles.

However, this is not to say that there are no opportunities with larger brokers in these lanes; it is just harder to find them. The advantage here is that there are likely fewer carriers in rural areas, and shippers in those areas likely have a harder time finding carriers to suit their needs. These rural areas can also be more loyal to local carriers because they have a sense of community there.

It may be a better approach to meet directly with local shippers and mention you have a fleet for hire rather than going through brokers. The brokers will take a percentage of the profits anyway, so the friendly local driver approach may work out very well. Do a bit of homework on this local shipper before approaching them. Does the company compete directly or indirectly with your parent company? Do they have their own private fleet?

Checking those questions first prevents proposing a business that has conflicts of interest. Does the company have a single owner? If so, you want to meet with that person. If it is a part of a larger company, who runs the location … is it an operations manager? You’ll want to have a dialogue with the important decision-makers in that location. You likely will not want to reach out to their corporate traffic/transportation procurement team before talking with the local manager because you will lose that local draw.

If the fleet’s truck garage is in a major city and the deliveries are outside the major city, there is a significant benefit to backhauls (loads that can be picked up on return trips). Major cities tend to consume more goods than they produce, so rates on lanes going towards the city generally have higher rates than lanes going outside the city. Obviously, this is very dependent on the actual market, so it is a general statement. It should be fairly easy to use a backhaul strategy specifically in these situations rather than just third-party freight.

However, if the fleet’s truck garages are in a major city and the deliveries are local within the city, this generally changes the strategy. For one, the drivers are likely paid by the hour because they tend to spend more time in traffic. If the drivers are paid hourly, going a longer distance means a higher cost per mile compared to other carriers who pay per mile. Therefore, hourly drivers making local deliveries in major cities should probably focus on finding third-party freight opportunities locally.

These third-party local deliveries generally have a higher rate per mile so that carriers can cover their fixed costs. On the plus side, the local drivers are more familiar with the local city, so these hauls can be more comfortable for these drivers as they are already aware of the major roadway options and how to adjust for city traffic during certain times of the day.

Different cities and states have restrictions on equipment of different sizes. For example, if you haul in a very major city, you might only be able to pull 48’ trailers instead of 53’ trailers. Keep that in mind if you’re booking third-party loads that require navigation in major cities.

Equipment factors

There are many equipment factors that can be an advantage for a private fleet, so we will just focus on some examples here so you can get an idea of how to adjust your approach based on what your fleet has.

If your fleet is single-axle, you have a big limiting factor in third-party hauls. Rates for loads that require tandem axles will typically be significantly higher than loads that can be covered with a single-axle truck. This is also a factor when it comes to your trailers. Do you have 48’ or 53’ trailers? Do the doors open outward, or do they roll down? Do you have E-tracks?

If you have a single-axle truck, but your trailers are 53’ (or more), and trailer doors open outward, without E-tracks, your top customers will be shippers that cube out the trailer rather than weigh out the trailer. For example, the fleet will want to find shippers that haul boxes of pillows and toilet paper. Shippers that cube out are more likely to floor load (not use pallets), so they want trailers that can have every inch of spare capacity available.

If your fleet is tandem axle with sleeper cabs, clearly, there is an advantage to taking longer hauls and focusing on backhauls that pay for your trip back to the truck garage. The driver does not have to worry about getting stuck booking a hotel due to unforeseen hours of service issues.

Flatbed and reefer (refrigerated) trailers are their own niche of third-party freight opportunities. Their rates are generally separated from dry van rates, so you can clearly see the difference in the market price. Reefers can compete as dry vans when the reefer market slows down, but it takes some time to prepare the trailer for that transition.

Food-grade trailers are clean enough to carry food. You can use food-grade trailers to haul non-food grade, but they must be cleaned to the point where they return back to food grade. Certain spills can soak into the floorboards of the trailer, and the trailer cannot be returned to food grade. In that case, the trailer can only be used for non-food-grade loads, or the floorboards need to be removed and replaced.

If your fleet is hauling non-food-grade materials in food-grade trailers, it is important to pay close attention to the third-party tenders. Sometimes, you won’t know the full nature of the load until after you book it. If it turns out that the product is at high risk of damaging a food-grade trailer, you may want to revoke the load to be safe…however, to keep on good terms with your broker or shipper, you should do so very quickly so that they are able to find another carrier to cover the load.

Pallet jacks take up space in the back of the trailer. If your parent company requires the driver to bring one for their loads, then that pallet jack will be sitting there when you book a backhaul. Depending on the load, the shipper may not plan extra space. For this reason, it is good practice for the fleet to track the equipment requirements of each parent company customer and consider which route will pick up the load when planning the backhauls.

About the Author

Uriah Clise

Uriah Clise

Uriah Clise is an associate professor at Cleary University in Howell, Michigan, where he instructs and creates content for operations and supply chain courses. He is also the director for the Center of Instructional Innovation. He has worked for 4 companies with private fleets, with sizes ranging from a three-truck fleet to a top-20 U.S. private fleet. He has spent over 20 years in supply chain roles, primarily in analysis and continuous improvement.

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