March 21, 2023
Spot market trucking is not always easy. With rates dropping and more trucks on the road, it can be tough to turn a profit — especially for new truckers who have never experienced a market downturn. However, it is possible to stay afloat and even profitable when trucking rates-per-mile (RPMs) are low.
In this blog post, you’ll hear from two industry veterans about how they thrived through the highs and lows of the trucking industry. Manny Garces, Head of Operations at SmartHop, and Eddy Ralle, former Head of Dispatch at SmartHop, run their own carrier company. For over a decade, they’ve watched the trucking industry evolve and learned how to operate during difficult times. We sat down with them to discuss their experience and the advice they have for truckers navigating the spot market.
Head of Operations at SmartHop
Former Head of Dispatch at SmartHop
Manny: I got introduced to trucking by working for my brother’s car carrier company, loading and shipping cars across the US. After a few years, Eddy and I teamed up to start our own carrier company. We started by buying three to five trucks. All old equipment that we could buy off of Craigslist or through word of mouth. We started with a reefer and dry van. We quickly learned how important it is to have good equipment. About two years into it, we sold all the old trucks, and we bought our first brand new truck from the dealership.
We had fewer breakdowns, better performance, and less downtime with dealer trucks. We ended up buying seven trucks from dealers in that first year, and then we started leasing trucks. We grew our fleet to 30+ trucks by leasing. It’s been a long journey.
Eddy: For me, I started with this person running reefers. One day she just put me in front of a computer and said, “book a load.” That forced me to learn the hard way. I didn’t know anything. So I started doing my research. I learned that brokers are constantly competing with each other to see who can get the lowest possible rate for their loads. It’s a power struggle between brokers and carriers: brokers want to pay the least amount of money possible, and carriers want to be paid the most to make a bigger profit.
The spot market is also constantly changing — it goes up and down. Because of this, the industry is leaning more and more towards research and technology. To survive in the spot market, it takes more than opening up a load board and saying, “Hey, I’m in Florida, what’s available today?” It takes research and planning.
To survive in the spot market, it takes more than opening up a load board and saying, “Hey, I’m in Florida, what’s available today?” It takes research and planning.
Manny: Part of our strategy was learning how to calculate the profit of each load, so we started to use more tech, like heat market maps. These tools aren’t new but they are often misunderstood. You have to study them and really master those hot markets to find profitable loads before booking. We met the SmartHop founders who were committed to building tech to help owner-operators and small carriers get more. The technology used at SmartHop helps truckers find high-paying loads while minimizing downtime and dead-hauling. We were trying to solve the same problems, so it was a perfect match.
Eddy: Sitting idle and waiting for spot market rates to improve is not the best approach because your business still has fixed operating costs, like insurance, parking, and the costs of your truck lease to name just a few. If you’re not bringing in money every month, you risk going out of business. It helps to have a long-term plan in place so you can make sure that you aren’t spending more to take a load than what you will earn.
Manny: In the trucking industry, the mega carriers have figured out that they have the buying power. Small carriers and independent owner-operators can’t compete. I wish we could be somewhere in the middle where everyone’s profitable and it’s all fair across the board.
This is where a partner like SmartHop can help small carriers and owner-operators. When you dispatch with SmartHop, you become part of a larger network of carriers, while operating independently. Being part of this carrier network gives you leverage with brokers and makes sure everyone is on the same playing field as large fleets, no matter your size or the market conditions. Without that network, support, and leverage, the little guy can get crushed when the market goes down.
Eddy: I mean, this industry is hard. So many different people are trying to make more money, book more loads, and get more trucks. With brokers, if you’re calling and you’re a one-truck guy or a smaller fleet, they have less incentive to build a relationship with you. But being part of a large carrier network, brokers are more likely to work with you because they risk losing access to more trucks. They’re now thinking, “Hey, you know what, let me be fair. Let me pay them a good price because they’re giving us a lot of business.” So, the more companies like SmartHop grow, the more we can decrease that imbalance in the market.
SmartHop is a trucking solution that helps owner-operators and small fleet owners like you earn more and stress less. It supercharges your trucking business and gives you more leverage with brokers, 24/7 support from a tech-powered back office, and the best rates on everything you need to operate — including fuel, quick pay. and more.