“Stay Away From Brokers” Warns Owner of Recently Closed Trucking Company
Dallas, TX – The owner of a recently shuttered trucking company says if he could go back and start his trucking business again he would “stay away from brokers.”
Gersewak Singh was the owner and CEO of the Dallas, Texas-based Dallas Freight System (DFS) and says he was forced to close the company on June 29, 2019.
“I was forced to make a very hard decision,” Singh recently told Transportation Nation Network (TNN).
The company which employed almost a dozen drivers along with several contracted owner operators, was founded in 2010.
Singh says DFS enjoyed some profitable years, but recent operating conditions made it impossible to stay in business.
“Rates were going so low, I was losing twenty to twenty-five thousand dollars each of the last six months,” he said.
During the profitable times Singh says it was routine to get $1.80 per mile, but he began hauling freight for as low as $1.10 per mile back in the fall of 2018 to keep his drivers working and paid.
“We were forced to pick up cheap freight because we had the responsibility to help feed our drivers’ families, but we cannot haul freight for 1.20 per mile and stay in business.”
Add to this the fact his insurance costs were set to skyrocket from $1,200 per month/truck to $1,600 per month/truck, and Singh says he had no choice.
He says at one time the company contracted with as many as 15 owner operators, but after numerous poor vehicle inspections on some of those trucks he says he had to “let the bad apples go.”
According to data from the Federal Motor Carrier Safety Administration (FMCSA), DFS had 16 vehicle inspections in the last 2 years resulting in 4 out of service designations.
“The reason my maintenance record was so high was because of owner operators. They didn’t want to take care of their trucks,” Singh commented.
Though Singh said he took action and “cleaned up my whole fleet,” he also conceded “these scores don’t go good right away.”
DFS hauled freight for giant retailers such as Costco, Walmart and Target.
The company ran from Dallas to the northeast and back, Singh said.
Perhaps his biggest mistake, he admits, was being so dependent on what he called the “broker mafia.”
“Brokers are making more money than we are and we are doing all the job,” he said.
Singh said the carrier hauled 100% brokered freight.
He issued a strong warning to those looking to start a small fleet?
“The best advice I’ll give is start small which we did, but stay away from brokers. Get your own customers,” he urged.
“At the same time keep your eye on receivables from customers. I got burned by brokers going out of business and they didn’t pay us.”
Singh also lamented how difficult it is for smaller carriers to survive in the current regulatory environment.
“The regulations are made for big companies,” he said.
He lashed out at the hours of service (HOS) rules and the implementation of the electronic logging devices (ELD) mandate by calling them “ridiculous.”
“I really want FMCSA to fix this,” he implored.
Unlike other recent closures that have been in the news in the last few months; most notably, LME and Falcon Transport, Singh exited gracefully by giving notice to his drivers.
“My drivers received their paychecks and I helped drivers find a job. They were my family,” he said proudly.
Further, he said he feels for other small carriers trying to make it.
“Companies are scared because they don’t know what is going to happen in this politically-charged world,” he said.
Additionally, he warned that though the public may not be feeling the pinch right now, they soon will be.
“Eventually it is going to catch up to the public,” he predicted.
(Image shared courtesy of DFS/Facebook)