How Can I Create a Flexible Agreement for Outsourcing Trucks Without Daily Commitment?

Respected Seniors, we are in the logistics industry. We have only a few trucks that are already running for signed projects. Now, I have taken on a few more orders where I am unable to serve my customers on time. I approached a transportation company, and they are willing to provide me with trucks at a flexible rate that is profitable for both of us. The problem here is that we have to sign an agreement. In that agreement, if I outsource the trucks, then they should be engaged every day until the validity period, which I am unable to commit to. If an outsourced truck is idle on a day, what can I do?

Mutual Agreement Concerns

I mean, how can we both enter into a mutual agreement? I need a flexible mutual agreement with "Terms & Conditions" for signing with a transporter.

Is it possible for you to contact truck drivers who have their own trucks? Many times, these transport companies do not have their own trucks. All they do is open an office, take orders from customers, and pass them on to the drivers. You can also do the same for them. These drivers affiliate themselves with a couple of transport companies. As soon as they receive an assignment call, they take the truck to the customer's premises. For every assignment, the transport company receives a commission.

Talking directly to the truck drivers has a benefit in that they may not charge service tax on their bill, whereas the transport company will surely levy the service tax.

By doing this, you will be able to synergize your current dedicated assignments and any future uncertain assignments. Have you spoken to your own drivers? They may provide you with a better solution. Additionally, talk to 1-2 logistics managers in your city; they may also offer valuable insights.

Cost-Benefit Analysis and Break-Even Point

The second thing is to request a quotation for dedicated trucks (which you have already done). If there are 25 working days, how many days can you afford to keep the trucks idle? Have you conducted a Cost-Benefit Analysis (CBA) or calculated the Break-Even Point (BEP)?

Often, truck companies offer dedicated services for a fixed amount per kilometer for the first ____ kilometers (e.g., 2,000 or 3,000 kilometers). This amount includes the driver's salary, maintenance, capital investment, etc. If the truck remains idle on some days, you won’t incur any costs. Therefore, why bother?

You may provide more details on the estimated operations. A better solution may emerge.

Thanks,

Dinesh V Divekar