An Injustice Averted

ATeam · Jun 17, 2011

Offer comes in this morning. Reefer load with marginal pay. Run info indicates TVAL tape but it is for freight that does not normally require TVAL service. Call to dispatch reveals that a data logger tape is requested for this non-TVAL load but there is no extra pay to provide the tape.

Message to dispatch: "It is very wrong to charge us $16 a week to have your data logger in our truck and then force us to give away the service. Please take us off this load." Dispatch agreed to our request and took us off the load.

It's as if someone is sitting at headquarters, intentionally thinking up more and more ways to encourage contractors to leave. Think about all the developments in the last year or so. What percentage of them would you call contractor friendly?

TeamCaffee · Jun 17, 2011

All of the ones that pay really well...

ATeam · Jun 17, 2011

TeamCaffee said:
All of the ones that pay really well...

Are you talking about loads that pay really well? Our spreadsheet and run journal indicates they are becoming fewer and farther between. The change is the decline in such loads, which is not contractor friendly, unless you happen to be a flat-rate contractor willing to run under that contract.

TeamCaffee · Jun 17, 2011

The loads that we accept are enough to pay what we need them to we still get loads that are great and we get loads that are just mediocre. We are still just as excited when the QUALCOMM dings as we were six years.

The competition is different than it was five years ago are even one year ago.

We are still making money and enjoying ourselves and we are changing with the times.

mdscott · Jun 18, 2011

Phil, we have to agree with you. What was once a great company to work with has certainly changed. I dont know if we will be able to stay with all the changes, sometimes the bad taste they leave is not worth it. Time will tell. We all have to change with the times, that is true in all aspects of life and it is so nice to have that choice, but what our choice will be concerning the Fed is still very much undecided.

ATeam · Jun 18, 2011

TeamCaffee said:
The competition is different than it was five years ago are even one year ago.

Diane and I have noticed the same thing. We know expediters who lease their trucks to competing carriers and are making more money than we are. That was not the case before but as our revenue declines, it is now.

Diane and I were home last week and went into service early Monday morning in the Minneapolis express center, which used to be a really good express center from which we had no problem getting out. We finally got dispatched on Wednesday for a Thursday morning pick up in Chicago and delivered Friday in Kansas City.

A few loads were offered and declined but not many. They included a short run in South Dakota, a dead-end run into the hinterlands of Canada, a good run that went to Denver, and a TVAL run that picked up in Indiana but paid too little because of the long deadhead.

We thought about taking the Denver load but remembered the nine unproductive days we spent stranded in California and the West Coast Runs Reconsidered thinking we did after. We noted that we had been sitting in Minneapolis, of all places, without a decent load offer for three days. We noted that the trucks ahead of us in the dispatch order had not been quickly dispatched either. Denver was ruled out as a risk too big to take.

As we waited for freight in Minneapolis, we thought back on the customers we have served there in the last eight years. There have been several big customers that used to get us out, such that we were usually pre-dispatched before getting in and even called when we were out of service to be put back in and pre-dispatched on loads that our schedule accommodated.

These customers have literally disappeared off the board. The corporations and warehouses are still there. I presume they still ship freight but they seem to be doing it with other carriers.

There is one customer we know who still ships reefer freight with FedEx and we used to get those loads on a reliable basis when we went back in service and wanted to get out. That freight has shifted to company-owned reefer trailers pulled by flat rate trucks and is ours to haul no more.

It is indeed true that "The competition is different than it was five years ago are even one year ago." Competing carriers seem to be picking off our regular customers and now, with the introduction of company-owned equipment and flat-rate trucks, we see competition from them too, in a dispatch system that is rigged in their favor.

TeamCaffee · Jun 18, 2011

T-Val appears to have a small base of customers. T-Val is also a lot smaller percentage of the trucks in the fleet. Since it is getting so bad in T-Val for you have you considered running as a dry box?

As a dry box we see new customers all of the time who are not discounted customers. The customer base also seems to be changing areas that were dead before we get out of quickly and other Express Centers that were hot areas are now dead. We will continue to change as the customer base changes.

When I look back at the way is used to be... There were good points and there were bad points. One thing that comes to mind is I do not want to go back to not getting FSC on all dispatched miles. I do not want to go back to filling out a log book. There is a myriad of things I do not want to go back to. I do not like all of the changes that have been made, but at the same time I am glad we are leased to a company who is not going stagnate.

ATeam · Jun 18, 2011

TeamCaffee said:
T-Val appears to have a small base of customers. T-Val is also a lot smaller percentage of the trucks in the fleet. Since it is getting so bad in T-Val for you have you considered running as a dry box?

Every time we do a non-reefer load, we run as a dry box truck. The dry-box option is available everytime we are in service and waiting for freight. If a good dry load is offered we will accept it but we don't see many good dry box loads offered.

Have we considered running as a dry box? Yes we have.

In better times, our reefer and reefer truck body have paid for themselves many times over. It would not be a big deal to drop the reefer off the truck and scrap it, especially if the money to be made with a reefer continues to decline.

By swapping the reefer body for a dry box we could convert our truck from a six skid truck to one that can haul eight 48"x48" skids, but since so few expedite loads actually fill a truck, and since we would still be dispatched as a six-skid C-unit, there is no urgent need to change truck bodies.

Even without removing the reefer, we could make the transition to dry box at FedEx Custom Critical simply by having them remove our reefer flag and change our truck number from CR-XXXX to C-XXXX.

So, yes, we have indeed considered, in a number of ways, hauling dry freight; including getting a bid from a truck body shop on a new dry box.

Unless dispatch has started using preferential dispatch to put dry freight on dry trucks while "saving" fully qualified straight-truck, percentage-paid teams like us to do the heavy customer service loads the flat rate ER-units cannot do, we see no reason to become a dry truck.

But now that you mention the full-tariff dry loads you are seeing, I am starting to wonder why we are not seeing the same offered to us?

TeamCaffee · Jun 18, 2011

Phil have you ever thought that maybe we as a dry box look at loads different than you do as a T-Val unit?

ATeam · Jun 18, 2011

TeamCaffee said:
Phil have you ever thought that maybe we as a dry box look at loads different than you do as a T-Val unit?

A load offer is a load offer. They all read the same on the Qualcomm screen. How do you look at them that would be different from anyone else?

TeamCaffee · Jun 18, 2011

ATeam said:
A load offer is a load offer. They all read the same on the Qualcomm screen. How do you look at them that would be different from anyone else?

You are right Phil I am wrong we look at the Qualcomm the same way. We see the same screen no difference.

Thank you for pointing this out.

ATeam · Jun 18, 2011

You took me literally when I was asking a serious question. Let me rephrase.

I know you and Bob look at loads the same way Diane and I do when it comes to calculating pay; that is, pay per mile for all miles. Fuel surcharges, accessorials, base rate...none of it matters. It is the total amount of pay added together divided by the number of miles (deadhead and loaded) on the run.

Now say you are in a good express center on Monday and a routine dry box load is offered that is 1,000 miles at $1.40 per mile and it delivers straight through to a good express center.

Is that a load you would accept? Why or why not?

LDB · Jun 18, 2011

If I had a unit requiring logs I would gladly go back to paper logs and a GOOD Omnivision unit that boots up in twenty seconds and $5 more per week in my pocket instead of the junky mcp200 that boots in two minutes 58 seconds with a uselessly small keyboard.

TeamCaffee · Jun 18, 2011

ATeam said:
You took me literally when I was asking a serious question. Let me rephrase.

I know you and Bob look at loads the same way Diane and I do when it comes to calculating pay; that is, pay per mile for all miles. Fuel surcharges, accessorials, base rate...none of it matters. It is the total amount of pay added together divided by the number of miles (deadhead and loaded) on the run.

Now say you are in a good express center on Monday and a routine dry box load is offered that is 1,000 miles at $1.40 per mile and it delivers straight through to a good express center.

Is that a load you would accept? Why or why not?

Yes that load more than meet my expenses and puts money in my pocket. That is a good run not a great run.

ATeam · Jun 18, 2011

Diane and I would not take that load. A thousand miles divided by 50 mph (the speed FedEx Custom Critical uses for load planning) is 20 hours of driving. Add in 30 minutes of labor on each end to get to a dock and complete the pick up and delivery to give you 21 hours of work.

The price will vary between trucks depending on whatever driver health care and retirement benefits you build into your pricing, so lets talk about a cost range of $1.00 to $1.40 per mile to operate your truck and replace it when it wears out.

A load that pays you $1.40 a mile will give you a profit ranging from zero to $0.40 a mile, depending on your operating costs.

If you can keep your operating costs down to a buck a mile, your maximum profit on this team load is $400, which is $200 each, divided by 21 hours (the non-driving co-driver is committed to the load even when in the sleeper), which totals $9.52 per hour before taxes, showers and sleep time needed before your next run.

If it costs you $1.10 per mile to run your truck, it becomes $7.14 before taxes, showers and sleep. At $1.20 per mile to run your truck, it becomes $4.76 per hour or a hundred dollars each for the day and night you nearly donated to your carrier and customer.

It has nothing to do with a reefer. We value our time and equipment more than to offer our services and put miles on our truck at such a price.

Notice too that at the maximum profit of $400, your net pay is $0.40 a mile before taxes. Divide that by two for each team member to get $0.20 per mile. Could you not do better as company drivers and get an employee benefit package too?

Diane and I love the road and the freedom that expediting provides as much as you, but if meaningful profits (that's profits, not money) cannot be made, we would enjoy it very little if at all.

jjoerger · Jun 18, 2011

I do not understand why the truck you are running should have to pay for the replacement value or a new truck when it wears out. Shouldn't the truck only have to pay for it's self?
Lets say you invest $150k in a new truck that will last 800k+ miles and you pay yourself back at $.25 per mile. And let's say this takes 6 years. That truck has returned your money with 10% interest during it's life expectancy. Should it have to earn another $150k to buy a new truck?
Or am I misunderstanding something?

ATeam · Jun 18, 2011

jjoerger said:
I do not understand why the truck you are running should have to pay for the replacement value or a new truck when it wears out. Shouldn't the truck only have to pay for it's self?
Lets say you invest $150k in a new truck that will last 800k+ miles and you pay yourself back at $.25 per mile. And let's say this takes 6 years. That truck has returned your money with 10% interest during it's life expectancy. Should it have to earn another $150k to buy a new truck?
Or am I misunderstanding something?

I don't understand what you mean by "pay yourself back at $.25 per mile." Can you clarify?

jjoerger · Jun 19, 2011

ATeam said:
I don't understand what you mean by "pay yourself back at $.25 per mile." Can you clarify?

When we bought our truck we paid cash from our bank account. I wanted to repay that money to our bank account over the first year. Our truck was $28k. Each week when we got our settlement I figured the total miles we ran, multiplied by $.25 and took that money to go back into our bank account as repayment for purchasing the truck. Now that it has repaid the initial investment should it have to earn enough to purchase the next truck too?

layoutshooter · Jun 19, 2011

It does seem that lately they are trying to run down the rates that they pay reefer trucks. TVAL loads are far and few between now. Just a year ago they were a huge percentage of our work and over all revenue. We have seen offers for TVAL/reefer that most dry box trucks could not afford to run.

I don't know if what we are seeing is due to the new company trailers, over all loss of business, or what? It really does not matter. We continue to work as best we can. We continue to do the best job we can in spite of what goes on around us and we are working on a resume.

I can say one thing for sure. Assuming this continues the quality of the fleet is going to go down hill for sure, unless they are moving to all company owned trailers.