A load board is a website that matches freight shippers (and brokers) with carriers. Shippers and brokers post loads that need hauling. Likewise, owner-operators and fleets can post their available capacity. Load boards allow shippers and carriers to find each other and enter commercial agreements to move the freight. This article covers:
- What services do load boards provide?
- Are load boards worth it?
- Best way to use a load board
- Handling slow-paying invoices
1. What services does a load board provide?
The main objective of a load board is to match a load that needs hauling with carriers willing to pull it. However, many load boards have increased their services to attract and retain clients. Each board has its own specific service package, often with tie-ins to other products. Services usually include:
- Matching a load with a trucker
- Credit reports on the shipper/broker
- Days-to-pay information
- Mobile access
- Ability to finance loads from certain shippers
The market is competitive, and there are several freight boards – both free and paid. Most boards are inexpensive, though prices vary. As a rule of thumb, you get what you pay for. However, paid load boards are not always better than free ones. Here is a list of load boards (free and paid) that offer services in Canada.
2. Are load boards worth it?
Load boards can be very useful when they are used correctly. However, many new owner-operators and small carriers make the crucial mistake of relying solely on a load board to get their loads. On the surface, this strategy seems ideal. It allows you to look for loads from anywhere without having to spend time selling your services to shippers. However, load boards have some drawbacks you must keep in mind.
a) Low-paying loads due to competition
The competition for loads, especially dry van loads in popular lanes, is very high. You will compete against many owner-operators that want the same load, so you must be prepared to haul it for a very low rate per mile. Estimate your costs carefully, as it is easy to quote rates below your cost-per-mile and pull loads at a loss.
b) Most clients are brokers
Expect that you will be working with a lot of freight brokers. There is nothing wrong with brokers. However, keep in mind they also take a part of the profit and leave you with less. This situation reduces your rates. Lastly, always check your broker’s commercial credit and reviews to ensure that you pull loads only for reputable companies.
c) Hard to develop long-term clients
You won’t develop many long-term relationships with direct shippers through a load board. Instead, you will usually pull loads for brokers and shippers you may never see again. You will need to return to the load board to get your next load and repeat the matching process. This process requires hard work and is more difficult than most truckers think.
3. The smart way to use a load board
Most owner-operators agree that the best way to run a trucking company is to get loads directly from shippers. This strategy allows you to build long-lasting relationships with companies willing to pay a good rate for your services.
We are not saying you should never use a load board. Instead, use the load board as a tool to support a growth strategy of building direct shipper relationships. Your objective should be to limit your load board use as much as is practical.
a) Handle excess capacity
A load board is a great option to handle some of your excess capacity. You can use it to get your business started and increase your experience. Additionally, load boards are a valuable tool to reduce your deadhead miles. Your objective is to reduce your excess capacity quickly as you find long-term clients.
b) Pricing information
Load boards are a great tool to get an estimate of the going rate per mile for the type of loads you haul for any given lane. Note that rates can vary based on the direction you are hauling a load. You will get a better idea of rates by looking at pricing information for both ways of your haul – going to and from the destination. Doing pricing research before you start is essential as it will help you avoid costly mistakes.
4. Handling slow-paying invoices
One of the challenges of working in the trucking industry is that many shippers don’t offer quick pays. Instead, they ask for net-30-day terms. This situation puts you in a position where you must pay the costs of picking up and delivering the load and then wait a month to get paid back. Unfortunately, your ability to grow and take on loads is limited by the size of your cash reserve.
A simple way to solve this problem is to factor your freight bills. This financial tool allows you to get an advance on your slow-paying invoices. It provides you with funds to pay for fuel, repairs, and other expenses. The main advantage of freight factoring is that it is relatively easy to get. The most important requirement is to haul loads for creditworthy shippers. To learn more, read “What is Freight Bill Factoring?”
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