Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rates?

Bruno · May 29, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

chefjesse said:
Bruno I understand we all have cost there is no doubt about this, what I am saying is that there are so many hands in the till by the time it get to the OP actually moving the freight there is no profit or very little for him. We have all seen it fly by night outfits have a phone, fax, and internet access and your up and running, no authority no problem we have all seen it.

Respectfully,
Chef Jesse

Jesse

I understand what you're saying. Carriers like Panther and Load1 work on a percentage of GP (Gross Profit) that they need to be on each load. I have seen personally where both of these companies have made less than $10.00 GP on a load to service the customers needs. Remember some customers have contracts with carriers that they must cover every load. If you have van load that you can't cover, sometimes you have to have a straight truck or a tractor to do the load so you have to pay them their rate. It's not as easy or profitable as one may think. As John Elliott told me one time. " IT'S NOT WHAT YOU MAKE, IT'S WHAT YOU KEEP. If a carrier gross's $60,000,000.00 a year, but after all their costs they only show a profit of $250,000.00 are they really making a lot? That is an average profit of $684.93 a day. I'm not saying that this is the case as I'm sure you get what I'm saying.

chefjesse · May 29, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

I do Bruno

Bruno · May 29, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

chefjesse said:
Bruno I understand we all have cost there is no doubt about this, what I am saying is that there are so many hands in the till by the time it get to the OP actually moving the freight there is no profit or very little for him. We have all seen it fly by night outfits have a phone, fax, and internet access and your up and running, no authority no problem we have all seen it.

Respectfully,
Chef Jesse

Also, these fly by night companies are just that. They get into the business thinking that can get rich without doing the research on all the things that comes with getting your own MC number. The freight insurance alone is very costly and you have to have at least six months worth of income in the bank to fall back on. Most companies take 30 to 90 days to pay on freight bills. The load you may have done yesterday may not get paid to your carrier for 90 days. If the company your with factors the load they are going to give up 1.5% to 3.5% of the total gross revenue to the factoring company. A lot things comes in to play when becoming a Motor Carrier. You have to have your ducks in a row to really be successful when it comes to becoming a motor carrier. It's not as easy as people think. You have to worry about fuel cards, Road taxes, hiring the right people to handle all the different departments you need. I have been asked many times why we don't get our own MC number with the number of trucks we have.

To be honest it's not a step that I want to take as of this time. In the future we may look to becoming a Motor Carrier but as of right now we are VERY HAPPY with our current carrier.

rollincoal · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

There is value in leasing at the right company but you cannot explain that to some owners they just don't get it. All they see is "100% of everything goes to me".

Bruno · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

You have to ask yourself would you run for $1.30 a mile plus FSC or $1.50 plus FSC. The one at $1.30 gets 2.5 times the miles as the truck that gets $1.50. Drivers and owners are always looking at the rate per mile verse the total revenue. The truck at 1.50 a mile gets 1500 miles loaded miles a week as a team and the truck that gets 1.30 get 3750 loaded miles a week as a team.

Murraycroexp · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

jelliott said:
I don't see the industry moving away from the IC model in expediting. I think it is very engrained in the industry. Much more so than truckload world. Actually I wonder why that is?

Didn't Obama get on the warpath against ICs several years ago then get sidetracked with Obamacare?

FlyingVan · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

Bruno said:
Jesse

I understand what you're saying. Carriers like Panther and Load1 work on a percentage of GP (Gross Profit) that they need to be on each load. I have seen personally where both of these companies have made less than $10.00 GP on a load to service the customers needs. Remember some customers have contracts with carriers that they must cover every load. If you have van load that you can't cover, sometimes you have to have a straight truck or a tractor to do the load so you have to pay them their rate. It's not as easy or profitable as one may think. As John Elliott told me one time. " IT'S NOT WHAT YOU MAKE, IT'S WHAT YOU KEEP. If a carrier gross's $60,000,000.00 a year, but after all their costs they only show a profit of $250,000.00 are they really making a lot? That is an average profit of $684.93 a day. I'm not saying that this is the case as I'm sure you get what I'm saying.

You are correct. Sometimes the company even looses money on a load to get it covered. But, let's not forget the other side of the coin. When I was with a flat rate company I picked up a load at a company that was slow to pay, so I was asked to pick up the check together with the load. My jaw dropped when I saw that I got about 30% of what they charged. That was including fuel.

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jamom123 · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

Bruno said:
You have to ask yourself would you run for $1.30 a mile plus FSC or $1.50 plus FSC. The one at $1.30 gets 2.5 times the miles as the truck that gets $1.50. Drivers and owners are always looking at the rate per mile verse the total revenue. The truck at 1.50 a mile gets 1500 miles loaded miles a week as a team and the truck that gets 1.30 get 3750 loaded miles a week as a team.

I understand your point but you've also got to think, this is expedite your not guranteed any certain amount of miles like dedicated. So when you take that less paying load you don't know how long you might be waiting on the next load. Then you might regret running for the lower price.

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Bruno · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

jamom123 said:
I understand your point but you've also got to think, this is expedite your not guranteed any certain amount of miles like dedicated. So when you take that less paying load you don't know how long you might be waiting on the next load. Then you might regret running for the lower price.

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I can tell you first hand that carriers will always run the trucks at a $1.30 a mile plus FSC better than let's say a $1.65 plus FSC trucks. I know this to be a fact as we had reefer units at $1.65 plus FSC and they didn't run as well as our trucks at $1.30 per mile plus FSC. We lowered our over all rate and will only do reefer loads when offered at $1.65 per mile plus FSC and reefer FSC. They either pay the higher amount on the reefer loads or we just don't do them. I don't care if the load is 3000 miles, I won't turn on the reefer for less than $1.65 plus FSC. That is why carriers are buying reefer trailers. We aren't getting the reefer loads like we once did and a reefer straight truck unit is not worth buying any longer.

rollincoal · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

That's one way of looking at it. I have to admit I'd probably be attracted to the lower miles higher rates, even knowing fixed costs go down with more miles, but that's just how I'm wired. I was talking more in terms of independent operators who are looking at the fact they get 100% of the revenue and belittle someone being leased on for only getting a percentage. It's an apples to oranges comparison and they conveniently leave out the fact it's much more expensive to run under your own authority than it is to lease on with a carrier. They also tend to have high opinions that their 100% is as good as it gets when reality there are guys probably running similar freight or even the exact same freight making more from a 65% take. There is no clear cut "getting your own authority" is the only way. It works for a few but for many they'd probably be better off leased somewhere, even on a flat mileage rate.

davekc · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

Bruno said:
I can tell you first hand that carriers will always run the trucks at a $1.30 a mile plus FSC better than let's say a $1.65 plus FSC trucks. I know this to be a fact as we had reefer units at $1.65 plus FSC and they didn't run as well as our trucks at $1.30 per mile plus FSC. We lowered our over all rate and will only do reefer loads when offered at $1.65 per mile plus FSC and reefer FSC. They either pay the higher amount on the reefer loads or we just don't do them. I don't care if the load is 3000 miles, I won't turn on the reefer for less than $1.65 plus FSC. That is why carriers are buying reefer trailers. We aren't getting the reefer loads like we once did and a reefer straight truck unit is not worth buying any longer.

Reefer business isn't what it used to be. I certainly wouldn't recommend buying one for 250k or higher. As I have wrote numerous times in the past, the reefer straight business started taking a slide five or six years ago. Pretty much at the time dealers stopped having them on their lots.
Can still make money with them but the ROI just isn't there like years past.

chefjesse · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

Once you lower your rate it is almost impossible to raise them again.

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chefjesse · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

So you're running straight trucks for $1.30 plus fuel surcharge is that right?

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davekc · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

At Panther, you are going to be somewhere around that rate or above if driving for a fleet owner.

Bruno · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

chefjesse said:
So you're running straight trucks for $1.30 plus fuel surcharge is that right?

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Base rate at Panther is $1.20 a mile for a D unit with .05 more for a team, .05 more for a lift gate truck. If you have a C unit the base rate starts at $1.10 per mile.

jamom123 · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

Bruno said:
Base rate at Panther is $1.20 a mile for a D unit with .05 more for a team, .05 more for a lift gate truck. If you have a C unit the base rate starts at $1.10 per mile.

There's no way i could do loads at that rate.

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Murraycroexp · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

One man's feast is another man's famine.
Just sayin'.

westmicher · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

jamom123 said:
There's no way i could do loads at that rate.

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Sure you could... until you went broke! And I don't think some carriers care if you do go broke running their loads!

jamom123 · May 30, 2014

Re: Are Any Expedited Carriers Concerned with keeping on Own/Op with current low rate

westmicher said:
Sure you could... until you went broke! And I don't think some carriers care if you do go broke running their loads!

That's the thing these carriers act like were employees. Well if that's the case they can make my truck payment, insurance, fuel, tags,maintenance and everything else but guess what that's my responsibility so no i can't run for that.

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