We get the opportunity to talk to guys from all walks of life interested in starting their own Hotshot Auto Hauling Business. Some have zero experience in commercial trucking, and others have driving experience but have never owned their own company. Most everybody getting started has a lot of questions… What’s a good equipment set-up? How big should my trailer be 2-3-4 or 5 cars? Is there enough work out there to keep me busy? How much money can I make? These are all good questions, however for a guy just getting started, THEY ARE ALL THE WRONG QUESTIONS.
The day we noticed a short list of exemptions to the upcoming ELD mandate we studied it carefully and determined that our vintage 1999 Ford F350’s with the bullet proof 7.3 liter diesel engines just became more valuable. So as the ELD mandate approached, we sat feet up on the desk basking in the glow of our non-ELD future. We applaud the many drivers toiling to rebuild pre-2000 vintage trucks, racing to join the growing ranks of the ELD FOE. (Fraternal Order of the Exempt) But in an moment of clarity we realized, Holy Crap…NO ONE IS REALLY GONNA BE EXEMPT!! YOU WILL OBEY THE MANDATE, OR BE PUT OUT OF BUSINESS!!
Picture with me for a moment the break room at a weigh station Anytown, USA. As the mandate approaches the DOT enforcement clowns gather together sucking down bad coffee and jelly filled donuts, laughing about the mandate. One of them spouts off, “And what about the dummy’s running paper logs in exempt vehicles…!” And the room erupts with laughter… “We can really stick it to them…!” More laughs and cheers even louder. “Hey driver… I got your exemption, right here!” The room explodes laughter as one of the DOT guys shuffles about the room pretending to hump a driver. As the officer high-fives around the room to celebrate his creative interpretation of an ELD exempt inspection, another shouts out, “And what about an “exempt” hotshot rig…?” The room goes dead silent as the officers share steely eyed stares… “Oh, we’ve got a “special” inspection for those guys…”
If you’ve read a few old posts on this Matchpoint blog, you might by now know we really don’t like DOT enforcement officers that much. Although the picture we paint seems a bit far-fetched… it makes an important point related to the December mandate. Anyone running paper logs will be scrutinized for Hours of Service Violations in ways like never before, and we’re already getting a look into the future.
Go over the road for a few days with a paper log and you quickly learn the reality of how tough it is to keep all the I’s dotted and T’s crossed without an error. We’ve had guys using paper logs written up recently for stuff that would have never been cited in the past. One line is a little crooked on the grid and it’s a “form and style” violation. Have an hours of service math error that doesn’t involve an hours of service violation, and it’s a “log book not current” violation. The handwriting is on the DOT enforcement wall, if you’re not running an ELD, exempt truck or not…WE WILL PUT YOU OUT OF BUSINESS! Can you imagine what our future will look like running a Hotshot ELD exempt combination? The long knives will be out for our drivers at every weigh station.
So we just ordered compliant ELD systems for all our trucks… even the pre-2000 exempt units, because we will OBEY, and because we know those DOT guys are planning “special” inspections.
Probably one of the funniest GPS scenes to appear in a major motion picture is in the film “RV” staring the late Robin Williams in 2006. RV tells the story of a man (Williams) who desperate to bring his family together, rents a large Class A motor home. With no driving experience, Williams makes a mess of his driveway, and then proceeds to argue with his GPS at various moments throughout the film. Eventually Williams looking for a short cut over a mountain, ignores his GPS and high centers the RV on a narrow mountain road. The film got bad ratings overall, but remains a bit of cult favorite in our household, because a rolling “Big Turd” high centered on a mountain road, with Robin Williams struggling to get out of an unlikely jam, always get a laugh in our living room.
They weren’t laughing that much in Atlantic City a couple weeks ago when an 80,000 GVWR big truck navigated via GPS onto the famed wooden AC Boardwalk. The driver simply “followed” his GPS onto the boardwalk. Yikes!
We’ve been training Hotshot auto haulers since 2012, and we always make the point that “navigation” is one the most difficult aspects of the business. The difficulty is not just finding places, but also in properly sequencing the stops, and in determining the most efficient route for a load of cars.
We suggest having 2 GPS units running in the truck at the same time. Unit #1 is a dedicated GPS with truck routing and the other is usually a phone running I-Maps or Google Mapping. From our experience over the road, it’s amazing how many times the 2 GPS units will disagree on the best route. The flaw in our strategy is that getting 2 GPS units with opposing goals to agree, is like asking Democrats and Republicans to agree on Healthcare policy. The truck GPS is thinking about weight and height limitations on the route, while the I-Map strategy is always the shortest route, even if it means passing through a weight restricted neighborhood.
Together the 2 GPS units paint an acurate overall picture of the route and options, but it’s up to the DRIVER to process the information and translate it into how the truck should safely reach its destination. A GPS is a navigation tool and not a replacement for a driver’s brain. In the old days we used a paper map and “figured out” the best route. These days the GPS has taken the concept of route analysis out of the minds of some drivers.
We’ve had company drivers and owner operators go off their route by as much as 150 miles, with an explanation, ”That’s what the GPS told me to do.” Your GPS never tells you to buy and extra tank of fuel and go 150 miles the out of the way. But drivers do that, because sometimes when they set their GPS for a destination, their brain switches into the “off” position. And that’s how a big truck ends up on a wooden ocean boardwalk.
The biggest road block to success in Hotshot Auto Hauling is obtaining and maintaining affordable commercial insurance. Nothing else can happen until there is an insurance solution for a new driver or company. In the recent past obtaining coverage for a new carrier was a lock through Progressive. They were the “go-to” solution for fast, and affordable coverage. We used to joke that if a driver could “fog-a-mirror” they could get commercial coverage through Progressive. Not so any more.
The shift in Progressive’s appetite for new commercial carriers is not really a surprise. In the last 5-6 years the low cost of entry, and appeal of a light commercial (hotshot) auto hauling set-up, put a lot of non-qualified commercial “cowboys” on the road. Poorly maintained equipment, horrible FMCSA inspection records, and lots moving violations, probably yielded for Progressive a claims ratio that was unacceptable. Many of these drivers got put out of business by significantly increased renewal rates, or in some cases a denial of coverage at their annual policy renewal.
For a new hotshot carrier, there are very few insurance options, and not much competition, so rates are unsustainable, or coverage may be unavailable.
Matchpoint Auto Transport under the new insurance climate changed its operational model from a training and dispatch resource company, back to operating trucks. We now only provide training and dispatch services to drivers operating under our authority as company drivers or Owner Operators.
But the critical issue as a company driver or owner operator working with Matchpoint is still the same. Nothing can happen until there is an affordable insurance solution. So now when the question is asked, “How can I get started with Matchpoint”? The answer always starts with a question from us. “How is your driving record”?
Unfortunately, maintaining affordable commercial insurance for a hotshot trucking fleet requires a lot of discipline, and a “1-strike” and you’re out policy. We wish it weren’t so unforgiving… but with very few insurance options, operating in a dysfunctional culture of uncompliant operators, we can only accept drivers with perfect records. For every 10 potential drivers we talk with, on average only 2-3 will have driving records that qualify. In many cases the applicant doesn’t even know there’s a problem on their driving record. The speeding ticket 2 years ago, the minor accident in a Walmart parking lot, or the stop sign violation all put negatives on a driving record. Even an accident where the driver was not found “at fault” but their insurance company paid out a claim, will disqualify a driver.
We talked to 1 potential driver that claimed his driving record was good, with only a few “minor” issues. The underwriting profile for this driver revealed 2 speeding tickets and an accident in the last 3 years. Adding that driver to our policy with no new equipment would have raised our premiums per year over 80%.
So, the answer to the “How do I get started question?” You don’t, if your driving record in the past 35 months has any sort of blemish on it. Don’t look for equipment, don’t waste your time trying to figure out how much money you can make. The only way to “get started” is to have a perfect driving record, so either have the perfect record, or slow down and be careful, until any issues are at least 35 months back in your rear view mirror.
It happened on a somewhat stormy Friday afternoon on a relatively obscure stretch of Interstate. I-83, a pot hole ridden, billy-goat run, that spans between Harrisburg and Baltimore. It’s a popular north bound route for commercial truck traffic seeking to avoid the major I-95 tolls, including the “Not Worth It” bridge over the Susquehanna river in Northern Maryland, where a 5 axle Hotshot rig will pony up $48 of hard green, before getting dumped into a Maryland scale house immediately on the other side.
Yeah, some genius at the Maryland DOT decided it was a good idea to drop the northbound commercial bridge traffic straight into a scale house. Let’s stab ‘em then rape ‘em…. On their way into Delaware. The smart traffic is on I-83 northbound out of Baltimore. There’s no northbound permanent scales, no tolls… but there will still be pain if you drive this route too fast where some stretches are restricted to 55mph.
And that’s where we saw it happen, the death of one of our Hotshot Brothers. Not a death in a gruesome heap of twisted metal, a less obvious death, death by STD. A Sudden Ticket Death issued road side ticket by a Pennsylvania State Trooper.
We drive a vintage ’99 Ford F-350, like an old man who’s next seat will have 2 wheels and a ramp up and into the front door. A habit that has served us well, with no moving violations in the last 6 years over 400,000 or so miles. We’ve seen it a few times though, a shiny new Dodge Ram 3500 hammer down, trailer loaded, blowing by us like we are standing still. Then a few minutes later that driver is having a special conversation with a state trooper.
We’ve driven a Dodge Ram 3500 a few times, a fine piece of engineering, built to drag stuff like no other dually truck on the road. But the power and speed can easily get away from you.
In the old days of early 2016 we’d see one of our hotshot brothers on the side of the road with a state trooper and wonder, “how big is this fine gonna be…” But now we say, RIP brother your business is over, there’s no coming back from a speeding ticket that will immediately raise your insurance $600-$1,000 per month, or most cases a premium double that will eventually take you out of business. A painful financial death from a speeding ticket.
Hotshot insurance is so difficult to get, with very few options, that underwriting for most drivers is a matter of 1-strike and you’re out. You spend a lot of money on your equipment, but you’re most valuable asset is your driving record. One accident, one speeding ticket, and the financial hurdle is insurmountable over the long run. So slow down, it’s not worth the risk, and don’t get taken out by an STD from a state trooper.
It’s been 6-month since our last blog entry. Shocking that time can pass so quickly, but the 80-hour weeks building a business provide a steady stream of things to do, and problems to solve, while blogging gets left out of the mix.
We have always said “navigation” is one of the biggest challenges drivers face in light commercial auto hauling. But navigating a constantly changing operational landscape for our business, has risen to the level where we wished there was a GPS available to just input the next destination. Here’s a few of the highlights from the last 6-months.
We Fired Central Dispatch
In the last half of 2016 we saw our Central Dispatch subscription fees rise almost 100%. This trend along with a significant decline in the quality of the listings and loads, caused us to “fire” Central Dispatch, and in hind-sight, we have not missed Central 1-day since last January.
If you’re getting a majority of your loads from Central Dispatch your business is on a slow death spiral.
The larger brokers are now effectively running their own FREE load boards, offer integrated mobile phone applications, and control the vast-majority of “run and drive” auto shipments. Central dispatch has become a toxic sewer of misfits shipping cars. A high percentage of users are now “renting” their Central Dispatch access to third party shippers, so many times you don’t even know who’s the actual shipper of a car.
The small legitimate brokers still operating on Central have increased their documentation requirements to protect themselves from the carriers still bottom feeding on Central for their loads. We really can’t blame them, but who has the time to submit a 10-page carrier agreement and all the supporting documents for an appointment with a small broker that might have 3-4 interesting loads to run per year?
We do miss the export brokers operating effectively on Central, but exiting the export unit business was a small price to pay to be freed from the obligation to find loads from the Central Dispatch septic system.
We Realized Our Authority, Insurance and Safety Ratings
Are a Huge Asset
In November of 2016 one of the primary insurance providers to emerging Hotshot carriers suspended writing new carriers unless one of the owners of the company had significant trucking experience. They also raised their rates on current policy holders. The changed slowed the pace of new carriers entering the market, and put some companies out of business due to unsustainable insurance costs.
The change killed our training business. In the second half of 2016 we received 20-30 training inquires per month from our websites and trained 8 new carriers. In 2017 only a few training inquiries have trickled in, and only 1 company trained. While we enjoyed the training and dispatching of new carriers, it’s clear that the steep growth trend of new entrants into Hotshot Auto Hauling has peaked, and the new entrants today are more experienced truckers well equipped to manage a start up on their own.
But from the ashes of our training program emerged the realization that our insurance, safety rating and authority had more value than ever before. So we now leverage that asset to build our own fleet instead of training others.
Introducing: "Have It Your Way" at Matchpoint
Henry Ford is famous for selling the “Model T” in any color as long as the customer wanted black. We now offer training and dispatch assistance to anyone interested in Hotshot Auto Hauling as long as it’s under our MC Authority. There are 3-ways to get on board.
Drive one of our trucks.
Our drivers earn $800-$1,200 per week. Drivers must be over 40 and be willing to drive OTR routes away from home 3-4 nights per week. Our company drivers must have or obtain a Class A CDL from their home state with in the first 90 days behind the wheel of a company truck.
Lease on your Equipment.
This is a pure investment model where your equipment operates under our authority, and we hire and manage the driver, dispatch the loads and then pay the truck owner a weekly distribution. This strategy is suitable for those that own idle equipment, and wish to monitize it, without the day to day operational demands of running a truck.
Lease on as an owner operator.
This is a classic owner operator model where the truck owner operates under our authority, we dispatch loads manage all the cash flow and pay driver distributions several times per week. Owner operators must be over 40 hold a class A CLD and be willing to run OTR routes away from home 3-4 nights per week.
Build Your Business With Matchpoint
Over the years we have had several drivers train with us, operate under our authority, and then move onto develop their own companies. Many of these guys we still consider our Hotshot friends. So, the concept of helping guys build their businesses is not new, and is still part of Matchpoint’s future and culture.
The progression into the business is fairly clear. Learn the business by driving one of our trucks first. It’s amazing to us how many guys make buying a truck and trailer their first move into the business. It’s also not surprising that guys fail in Hotshot Trucking the fastest when they don’t understand the demands and challenges of the business.
Get dirty first by driving one of our trucks and you will learn 2 important things. 1) If you like the business and 2) What does the right equipment look like…
The next logical progression is to buy some equipment and operate under our authority as an owner operator. This is where you learn the economic realities of managing cash flow and operational expenses.
The last step is to jump out on your own with your own authority. A big step but one that you now enter with experience, and with a better chance of securing the right insurance.
Welcome to the MAT Tips Blog:
Here you will find tips specifically for hotshot automobile transporters. Each post comes from our real world transport experience and is designed to save you significant time and money as a hotshot automobile transporter.