Small truck, big service
Posted by HEAVY on December 08 2008 22:39
Small truck, big service
By Todd Dills - Overdrive Magazine
Hotshot haulers are those folks in dually pickups and cab-and-chassis Class 3, 4 and 5 trucks pulling deck freight, RVs, boats and other trucks. Chances are you know a few of them. You might be one yourself when over-the-road freight is slow.
The barriers to entry into the hotshot business are pretty much the same as for Class 8. Registration, licensing, insurance, regulations – all are roughly equivalent in hurdles and cash. But the myth of easy entry seems to drive interest in hotshotting, by far the most common query topic received by Overdrive.
Sure, equipment and operating costs are lower. Anecdotal evidence suggests you can run a hotshot truck for as little as 60 cents a mile in total (fixed and variable) costs, compared to about 90 cents to $1.10 for many Class 8 hauls.
But the cost of a dually can be as much as $50,000, depending on specs, and you’ll need to replace it sooner than you would a Class 8 if you’re running hard. Moreover, because your hauling power is smaller, rates generally are lower and deadheading is common.
Hotshotters are a more local or regional variant of the national expediters leased to carriers such as FedEx Custom Critical – though you might find some there, too, driving Sprinter vans or small trucks. Independents are distinguished by their relationships with local shippers, a focus on customer service based on availability and, above all, speed.
As a trucking term, “hotshot” came into use in the 1950s and ’60s in the oil fields of Texas and Louisiana, a niche that survives today. “When you’ve got an $80,000 day rate on a drilling rig, you don’t want to shut it down,” says Mike Coatney, president of Acme Truck Line of Harvey, La., a long-established owner-operator hotshot hauler. A typical hotshot load, Coatney says, is a valve or some other single piece of equipment needed to keep a rig up and running, something “it makes sense to pay somebody 300 bucks to hop in their pickup and haul the 50 miles there.”
Begun in 1960 as an in-state hauler, Acme was bought by Coatney’s father, Doyle, in 1972, when its fleet numbered only six trucks. Today, Acme’s owner-operator fleet includes 350 pickups, 200 one-ton duallies with 10- to 12-foot stake beds, and 375 stake-bed trucks that pull trailers, among other equipment.
Terminal manager Larry Benoit started with Acme as a driver only a few weeks after Doyle Coatney bought the business. They had “four pickups, total, all hauling oil-field equipment in Louisiana,” Benoit says. They’d occasionally trip-lease on another carrier’s authority to get into Mississippi or Texas.
The original hotshot, Benoit says, had no fifth wheels, stake bodies, or anything else, and he sticks to that usage today. “A real hotshot is a pickup truck, and that’s it,” Benoit says. He adds: “Hotshot is a phrase that’s used differently by different people.”
“The freight is what determines it’s hotshot,” says Melvin Brooks, owner and part operator of Brooks Transport, a three-truck family fleet based in Collinsville, Ala. “It’s got to be picked up now and delivered now.”
Brooks tells the story of a recent haul, a couple loads’ worth of parts to restart an artificial-sweetener plant in southern Illinois. “They called me at 11 on a Saturday night,” Brooks says. “I called my son Ronnie and said, ‘Let’s go.’ We went to Jackson, Ala., and picked up three pallets and pulled into the plant around dinnertime on Sunday. They were pleasantly surprised to see me so quickly. That’s what hotshotting is all about: a service to a company that needs it done now.”
Brooks is a master of customer service and marketing. His philosophy is a definite plus with shippers: “The price is always negotiable.” And he’s high touch. “You’ve got to stay in contact with people, let them know you’re available,” he says. “I wear my cell phone out.”
“Melvin is a true hotshot,” says trucker John Brown, webmaster of hotshothauling.com. Today Brown’s a Class 8 over-the-road company driver with Mike Brooks Inc. of Knoxville, Iowa, but in 2004, he was transitioning out of a network technologies job in San Antonio. A friend, Robert Leonard of Poteet, Texas, had just bought a Dodge 3500 dually pickup and “was talking about running RVs and boats and stuff,” Brown says. “We got on the Internet and started looking around, and truthfully we couldn’t find a whole lot of information.”
Leonard eventually leased to a small Indiana hotshot fleet, hauling RVs to Texas. One run with Leonard was enough to hook Brown, who started his own hotshot business and began building hotshothauling.com.
Kentucky Class 8 tanker owner-operator Rick Gaskill joined the forum when he was running RVs with his Dodge dually in 2005. “I was looking for better revenue for my truck,” he says. “I found this forum and was getting good information from it. The guys at hotshothauling.com are the most knowledgeable and helpful group of individuals I have seen on a forum.”
That’s important, because hotshotting is “a tough business,” Gaskill says. Perhaps the biggest gripe among responsible haulers is the competition from fly-by-night unregistered hotshots who haunt responsible online load-matching services such as Uship.com. “They make it tough,” Gaskill says.
Many operate this way simply out of ignorance, Leonard says. Some, however, know they’re supposed to have a DOT number, appropriate cargo and truck insurance, a CDL and everything else an independent Class 8 hauler needs. After Leonard found a Uship poster had used a false DOT number, he began to look at his hotshot forum as a counterweight to the crooks, a service to educate industry newbies.
“I’ve tried to talk to a lot of the guys on the site and really make sure they have all the correct information on legality,” Leonard says. “We have a little over 2,000 members today, but we have some dedicated members who’ve been there for a while and are extremely knowledgeable.”
Similarly, broker Gary McGaha of M&H Logistics of Phelan, Calif., recently launched ltlhotshot.myfreeforum.org to spread the word about his particular niche, less-than-truckload hotshotting. “I was looking at the trucking forums and finding a lot of questions that were left unanswered,” McGaha says.
Two and half years ago, McGaha was an independent owner-operator running a three-truck Class 8 LTL fleet. He’d just bought a new Dodge one-ton as a personal vehicle, though “I had it in the back of my head that I could use it moving LTL freight.” Then fuel prices ballooned.
“I parked the big trucks,” McGaha says. “I sent my brother out in my Dodge, and we were seeing a much better profit margin than we saw in the big trucks.” The Dodge was pulling in a higher gross revenue than any of his big trucks had been, McGaha says.
Owner-operator Mike Marvel has hauled M&H loads for less than a year. Based north of Kansas City, Mo., Marvel estimates his capital investment in his start-up business to have been around $50,000, counting his Dodge cab and chassis, a 53-foot Hefty lowboy, insurance, authority and everything else. Though the LTL business model typically includes a fair amount of downtime, Marvel calls McGaha a godsend for his ability to find freight fast. “Gary comes from the old school, which says overall you ain’t making any money if the truck ain’t moving,” Marvel says.
While Acme Truck Line’s Benoit says it’s more common to see Class 8 owner-operators coming into the hotshot market than the reverse, Gaskill, Brown and Leonard all are now running Class 8, Brown and Leonard as company drivers. “I’ll be burning somebody else’s fuel rather than mine,” Leonard says.
Hotshotters such as Brooks Transport are true survivors, Gaskill says. “People talk about how truckers used to be the knights of the highway and helped each other out and looked and acted like professionals,” Gaskill says. “You still find that in hotshotters. These guys are owner-operators with pride in their equipment and service. The good haulers like Brooks Transport have established a reputation for quality service that customers are willing to pay a fair rate for.”
“It’s a give-and-take business,” Brooks says. “If you’re good to your customers, they’ll take care of you.”
ACME Truck Line
Hot Shot Hauling forums
LTL Hotshot forums
M&H Logistics, 760-868-4932
How hotshotters handle fuel costs
The predominantly independent model of most hotshot businesses means that fuel costs must be accounted for in different ways. Some hotshotters prefer to collect their freight rates and fuel surcharges as separate invoice items, but many simply put the two together.
For instance, owner-operators Mike Marvel and Ryan Baird, both running freight brokered by M&H Logistics, coincidentally convoyed recently from Los Angeles to Denver. The camaraderie was great, but the pay on the 1,200-mile haul was even better, Baird says: $2.70 a mile for Baird’s load, $2.80 for Marvel’s, for grosses of $3,240 and $3,360, respectively. That above-average pay included their fuel surcharge, both say.
In his hotshot days, owner-operator Robert Leonard allowed his rates to fluctuate month to month with diesel prices. “I went off the national averages and explained everything I was doing,” he says. “Most people understand that.”
Whatever the accounting procedure, haulers whose charges don’t somehow account for fuel won’t be hauling long. This alone should do wonders in eliminating fly-by-night haulers, says Melvin Brooks of three-truck Brooks Transport in Collinsville, Ala. He stays on the cell phone with his shippers, explaining every rate change amiably, and in detail.
Fuel mileage varies widely in hotshot trucks, depending on load weights and shapes. This is one reason deadheading often is worth suffering. For the same reason, however, hotshot trucks have more opportunity than Class 8 rigs to maximize fuel economy.
Fully loaded with a trailer to a gross vehicle weight of 36,000 pounds, an oft-quoted average of 10 mpg might be realized. With modification, though, owner-operator Robert Leonard has achieved 12 mpg to 15 mpg loaded and 27 mpg unloaded in his 2004 Dodge 3500.
He started with a transmission upgrade. “We didn’t upgrade the gears, but we put on a triple-lock billet torque converter,” he says. He also upgraded the injection system and runs synthetic oils. “We also run a mild 60- to 80-hp power module. It gives you a little more low-end oomph and helps you out with fuel mileage.”
Picking the right equipment
The staple trailer-pulling hotshot trucks are made by the Big Three U.S. automakers – Ford, Chrysler and General Motors – and by Sterling, a Daimler Trucks North America brand.
Brooks Transport, a mostly expedited hotshot business in Collinsville, Ala., is running three 2007 Chevy Duramax 4500s with painted diamond-plate flatbeds for light freight not requiring a fifth wheel. With a West Coast bed and fender fairings, “you’ll get better fuel mileage, generally,” owner Melvin Brooks says, but he prefers the hauling versatility of flatbeds. The boost in braking power you get between the 3500 and 4500 models, or Class 3 and 4, Ronnie Brooks says, is significant as well.
“You’ve got to have the truck to control your load,” says 42-year veteran truck driver Tom Graham. “Electric brakes linked by just a wire don’t have near the capacity of air brakes.”
When pulling trailers, hotshot models 3500 and smaller are apt to be overloaded for the amount of braking power they have, Graham says. Before heart surgery temporarily sidelined him, Graham hauled expedited loads with a Class 6 Freightliner FL60. “If you’re not legal and safe, you get somebody hurt,” he says.
For hotshotters just starting out, equipment choices are key, Graham says. “Start with the right truck for the market you want to target and design your trailer around it,” he says. “With everything changing so quickly, your market will change several times over that trailer’s life. You might start out hauling cars, but if you have a wedge trailer with no deck on it, you won’t be able to change to do anything else.”
Be aware of state length laws, too. Maximum length for a one-ton with a trailer in Texas is 65 feet, Graham says. “Florida’s real bad about that, too.” Graham ran one-tons in the past, hauling oil-field equipment and other freight for Texas pipe maker Isco Industries, but by the time of his surgery he was hauling hotshot freight on a 53-foot step deck with his FL60, which he says gave him much more hauling versatility.
Brooks Transport owns four deck trailers, two of them gooseneck decks by EZ Haul Trailers, with 40-, 32- and 21-foot decks, purchased for around $10,000 apiece.
The 2008 Duramax cab and chassis lists between $27,000 and $42,000, depending on configuration. Brooks paid $45,000 for each of his, including the beds.
Owner-operator Mike Marvel, hauling freight brokered by M&H Logistics of Phelan, Calif., bought his Dodge cab and chassis for $34,000 and his Hefty Products 53-foot gooseneck lowboy for $10,000 just under a year ago. He went without any bed, as his LTL loads typically max out the 45 feet of usable deck space on his trailer.
Former hotshotter Robert Leonard swears by Dodge’s in-line six-cylinder Cummins. “It naturally has more low-end torque without requiring higher horsepower,” which produces the best fuel mileage, Leonard says. He has 212,000 miles on his 2004 model so far.
When Ford launched its 2008 Super Duty F450, it tested the design with 12 business owners, among them oil-field hotshot owner-operator Rusty Whitson of Elk City, Okla. It lists around $39,000 and up.
At the 2008 Mid-America Trucking Show, Daimler Trucks North America stressed its light- and medium-duty truck offerings, including the Sterling Bullet, available in Class 4 and 5 cab and chassis configurations.
EZ Haul Trailers
What works – and doesn’t – for sleepers
Sleepers for interstate carriers, according to federal regulation CFR 393.76, must be at least 74-in. wide, 24-in. deep and 24-in. high, measured from the top of the mattress.
The width of the cab in most one-tons “is a few inches shorter than what the federal guidelines allow,” says Gary McGaha of M&H Logistics. “It is not legal to log sleeper berth if you’re sleeping in the cab of these pickups.”
Hours-of-service regulations apply for any commercial driver, however, so hotshotters on hauls that exhaust their driving hours find themselves shelling out cash for motel rooms to stay legal.
But hotshots with cab and chassis one-tons do have the option of saddle-mounting custom-cut sleepers on the frame for compliance, something several of the owner-operators hauling M&H Logistics freight have done. “We found them on eBay,” owner-operator Mike Marvel says of the Kenworth sleepers on his and owner-operator Ryan Baird’s trucks. “They came from an individual who was making dump trucks from sleeper trucks.”
The two took their 42-in. flattops and cut 8 inches off the bottom “just above the toolboxes,” Marvel says. The relatively simple job cost Baird $1,100.
“I’ve got a ton of room for sleeping,” Marvel says. “Motels, in this business, get to be high dollar after a while.”
“These smaller trucks put off less pollution and use less fuel than full-size semi trucks doing the same type of work,” McGaha says. “In the future I expect to see commercial truck dealers like Dodge, GMC, Sterling and Ford offering these cab-and-chassis trucks with the sleepers already installed on them. These smaller, more fuel-efficient trucks could play a huge role in reducing our dependency on foreign oil.”
Owner-operator Tom Graham agrees. “If the manufacturers would design their smaller trucks to allow for the legal minimum of a DOT sleeper,” he says, “they could sell thousands of these things. They’ve just got to redesign the back sleeper area of the cab.”
Hotshot’s starting hurdles
LICENSING. A commercial driver’s license is required for any hotshotter wishing to run at more than 26,000 pounds gross vehicle weight (with trailer or without) or to pull a trailer of a weight more than 10,000 pounds.
AUTHORITY. There are companies to lease equipment to, such as Acme Truck Line in the oil-field niche and Bennett Truck Transport for RV hauling, but hotshots largely operate on their own authority. This is available for $300 via fmcsa.dot.gov/online-registration, where there’s also a guide to applying for appropriate registrations and insurance.
INSURANCE. Before you can obtain your authority, public liability and cargo insurance registration is required. At least $300,000 in liability is needed for vehicles under 10,000 pounds; for heavier vehicles, the range of protection you need is $750,000 to $5 million. The cargo insurance requirement varies widely, as well.