Sharing Your MC#?

So you've been in business for 3 months now and a friend sees that your killing it in the Freight Game and wants to get in the game with you. Or, you're doing what you're supposed to be doing, networking and making connections & friends in the business and you meet someone who asks you if they can ride on your MC# while they're getting their operation up and running. They have a Truck but their MC# isn't active yet and they want to borrow your MC# in the meantime so they can run and start making some money.

Yes, you can 100% do this, but you should keep some things in mind. A.) You have something someone else wants, so what do you charge? You are in the business to make money not giving free handouts. B.) How can you protect yourself now that you are adding this other person to your business? This is doubtlessly a person you trust, but things can happen on the road that are outside of your control. So, how can you protect yourself and your company's name/reputation? Let's go over these two items in more detail.

A.) What are you going to charge the Truck you're adding to your MC#? This Truck is now going to be using your Freight Factoring Company and there are fees that come with that. This other Truck will be added to your Insurance. Plus, this Truck will be working with your Dispatcher and again there are fees that come with that too. I've seen Carriers charge anywhere from 10% of the Rate Confirmations value to 30%. Personally, I think both of these values are too extreme. Some of the best Carriers I work with who make over $300,000 a year will "Rent" out their MC# for 18% and they have found that this is a fair percentage to allow someone else to borrow their MC#. The Trucking Company then makes money for letting this new Truck work with them and both parties are happy and can financially operate fairly.

B.) How can you protect yourself from things outside of your control? How can you protect yourself and your company's name/reputation? Man oh man... I've seen it when things go south. There was this one time when a Carrier, Snowball Xpress, was banned from working with TQL. Somehow Snowball Xpress got put on TQL's blacklist, meaning the Broker will not work with this Carrier and they have been banned from running loads with TQL. 

So, Snowball Xpress is stuck in south Texas and calls his Dispatcher and says "Hey, TQL has a load to get me out of an area where I can't find any other loads, but TQL has me on their blacklist so they won't give me the load and there aren't any other loads in the area. Can you ask another Carrier that you dispatch for if I can borrow their MC# for this one load so TQL won't know they're giving the load to me and they'll think it's going to a different Trucking Company?" The Dispatcher says, "Sure, I know a guy. You can borrow his MC# for this load." Then the Dispatcher calls TQL this time and books the load for Snowball Xpress, but gives TQL a different MC# so TQL thinks they just booked the load with a Carrier called Success Trucking. When Snowball Xpress shows up at the shipper there is a 50/50 chance the shipper won't care or notice the stickers on the side of the Truck that say Snowball Xpress and not Success Trucking. But in this situation, the shipper did notice that the name on the Truck that showed up was different. The Broker is now notified by the Shipper but keeps his cool and lets the Carrier know via email that "Hey, the Shipper just told me Snowball Xpress just showed up at the shipper and they were expecting Success Trucking to show up. I told Snowball Xpress they can't do the load, but it looks like Snowball Xpress is double brokering loads and using a different carrier's MC#." The Shipper sent this email, and put it in writing letting them know he knows what's going on, and the Broker lets the Truck run the load. However, after the load is delivered he now ALSO put Success Trucking on the blacklist because they helped this other blacklisted Carrier get a load by double brokering it. Now, because Success Trucking let this other Carrier borrow their MC#, they are now banned from working with one of the top Brokers in the United States. This has now damaged Success Trucking's reputation which will result in Success Trucking getting fewer loads and making less money.

So, how can the Carrier that's letting another Truck who is borrowing their MC# better protect themself? You create an agreement with the borrower that while they are borrowing your MC# you have to create an "escrow account." What do I mean by an "escrow account?" Your agreement can say ... "Within the first 5 loads that Snowball Xpress runs using Success Trucking's MC#, Snowball Xpress will pay into an escrow account totaling $1,000 that will be held the entire time the Carrier is borrowing the MC#. Success Trucking will hold this $1,000 throughout the duration of time that Snowball Xpress is running under the borrowed MC#, and these funds will be used to protect Success Trucking if Snowball Xpress causes damage to personal or commercial property, including defamation of Success Trucking's name and reputation. If there are no circumstances where the $1,000 is needed during the time the MC# is being borrowed then at the time of separation the $1,000 will be given back to Snowball Xpress." This way if a situation happens like with TQL blacklisting you… well, some cash is better than zero if you're blacklisted. 

At this point, I think you get what I'm saying. You need to know what you can charge, and you need to know how to protect yourself and your business. This is over-the-road transportation and a lot of things can happen that are outside of your control. A wise person once told me, "Stop worrying about what you can't control and only worry about the things you can." So, you need to plan ahead and get yourself covered when you rent out your MC#.