When to Purse Drop Trailer Opportunities
From a carrier perspective, the drop trailer business has both positive and negative aspects. For our company, Colonial Freight Systems, it depends if we are running reefer units or dry vans. The best way to explain this is to share both sides on how we actively pursue these types of shippers and lanes.
For our dry van division, drop trailer is almost always preferred. Our model uses dry van exclusively to run from east to west. With the new hours of service (HOS), live loading a dry trailer takes too many hours. By using a drop trailer option, the driver only has to log 15 minutes—or however long it takes, and is able to run his miles. We want to turn our dry van at least once per week, or it becomes unprofitable for our business. One to two times per week is expected.
Our reefer division is another story. Drop trailer is usually not the best option. Too many issues may arise, and depending on the lane, would not allow our company to be profitable. Here are the concerns we explore before we commit our reefer units to drop trailer lanes:
Who pays for the reefer fuel before we pick up the trailer?
Many companies want to use trailers for product storage or other non-lane related reasons. We expect the company utilizing our trailer to pay for the reefer fuel during that time. We are responsible for the fuel when our driver hooks to the trailer and signs for the bill.
Who decides which trailer to load?
This is a decision for the carrier. This was not a concern until the new CARB regulations took effect. Now, not all of our reefer units meet California regulations. If we have three trailers at a shipper’s location, and a load ships to Indiana, we select the non-updated trailer for that load. We typically save the “California-worthy” trailer to maximize our ability to accept a California load later in the week.
Is the shipper open 24/7?
In order to be cost effective, we only agree to drop trailer lanes if the shipper is open 24/7. This is the case for both reefer and dry van units. It is not in our best interest to sit and wait for drop yards to open when our drivers are empty and able to run late at night. It is better to live load in those cases and not let the drop trailer run while we are waiting.
How often will the trailers turn?
Unlike our dry van units, we need our reefer units to turn two or three times per week. Anything less decreases the number of available units to our fleet.
Drop trailer programs are definitely a viable option for time sensitive and high volume shippers. But shippers and carriers have to work together to make a drop trailer program cost effective and profitable for both companies. I would love to hear from other carriers on how they pursue drop trailer opportunities. Please leave a comment in the comment section below.