One of the biggest reasons why "the driver" has not seen a rate-per-mile increase despite the fact that fuel prices are at a record high is due to one of two factors. The first factor is "the broker factor!" Do you think the broker is just going to allow a customer to continue to pay the same rates for the loads that they need covered when fuel prices are soaring high above record levels? Of course not! The broker probably tells the customer that their independent contractors will not be able to haul "said load" at last years rates. The broker "and in some cases the company you work for, that is also serving as a broker on their own accounts" will charge the customer more money to haul freight. Yet, the big question here is "do you as the independent contractor see any of this increased revenue in your bottom line?"
Case in point. I'm not going to name the specific carrier by name "as I am just using this as an example of the types of business practices that most of the larger carriers employ" and I do not want to single anyone out. I have a very close friend that just received a load offer to go from the Chicago suburbs to Gillette Wyoming. The load was approximately 1000 miles and his carrier paid him around 1,100 to haul the load in a cargo van. Now, as it turns out, my friend happened to ask the customer "the coal mine" exactly how much said carrier had charged them to move the load. To my friends amazement, the carrier had actually billed said customer around 3500 dollars to move the load. Now, i'm not saying this is a dishonest practice, because sometimes carriers do charge more for some loads. They actually make a huge profit margin on some loads but then turn around haul 20 other loads for next to nothing and everything tends to even itself out in the end. But, why does the company get to make that much money off of the driver while the driver has to continue to run his equipment for the same fuel surcharge that he was getting this time last year even though his fixed and variable expenses have gone up.
This brings me to the second factor that is causing the rates to remain low. The good old bid borads. Bid boards are good for one person and one person alone; the customer. Competitive bid boards are just sinking the rates so low that a lot of decent owner operators are going to be priced right out of the business. This is happening simply because the bulk of the larger and smaller expedited carriers out here will not work together in order to set minimum rate levels. For instance, if all of the carriers got together and said that the minimum rate for a cargo van is going to be 1.20 per mile for all loads, even after we take our cut off the top. Then turn around and bid on freight with the agreed upon minimum rate in mind, load boards like NLM would have no choice but to award the loads to whichever customer is in the area. I mean, if the lowest bid is the same across the board, how would NLM continue to drive down the prices that are billed to haul freight? It simply would not happen in my opinion. I know that sounds a bit utopian, but it could very well become a possibility. Just take a second and think about how much "Ford Chrysler and GM pay car haulers to haul cars from their assembly lines to their dealerships!" Now, having pondered the fact that the automotive carriers have no problem forking over serious coin to move their finished product, why can't they then "in turn" pay us "the independent contractor" what we are worth!
The second part of the bid board factor is the countless loads that are brokered out to other carriers load bords and then rebrokered; and on, and on, and on, and on; etc. In many cases, some of the loads out here are brokered so many times that by the time the driver gets the load, there is little to nothing left in the way of rate per mile. But, once again, we take the load either to move into a better area, or simply because we need to keep moving. Case in point. I picked up a load in Norfolk Virginia about a week and a half ago. As it turns out, this particular load was booked by FedexCC for x amount of money "or whatever rate they charge etc." Then FedexCC brokered it out to some other logistics company "because they did not have a cargo van in the area" and then this company put it up on the NLM (never say no board). Well, after all was said and done, I ended up moving the load to New York City for a mere 80 cents per mile; with no fuel surcharge. I'm not complaining about the rate "as I knew that I was getting the usual rate from my company." But how many people got a cut of the money before I got my cut? Even my company got their usual 20 cents per mile cut on this load!
I'm just trying to say that we need to do more for ourselves. I know we can't shut things down or anything like that, but we sure as hell can fight for some carrier unity out here. In some cases demand it even. We can also work harder to ensure that loads loads are not being brokered and rebrokered. After all, we are the drivers, we are the folks that get the job done for both our carriers and the customers that our carriers service. I' m not saying that companies are bad "because they do book the loads for us, they employ salesmen to go out and find us new accounts, they collect the money for us, they look for loads while we sleep, and perform many of the clerical aspects of this business for us. I just think that we deserve more. Plain and simple. Our companies should go to bat for us just like Panther did when they they forced Ford to pay out a fuel surcharge! Now, it wasn't much of a fuel surcharge mind you, but it was something. Not only something; "it was a start!" Rememebr, this is still a great business! As long as fuel surcharges and rate per mile can keep up with our growing fixed and variable expenses, we can continue to make a decent living out here on the road.
Case in point. I'm not going to name the specific carrier by name "as I am just using this as an example of the types of business practices that most of the larger carriers employ" and I do not want to single anyone out. I have a very close friend that just received a load offer to go from the Chicago suburbs to Gillette Wyoming. The load was approximately 1000 miles and his carrier paid him around 1,100 to haul the load in a cargo van. Now, as it turns out, my friend happened to ask the customer "the coal mine" exactly how much said carrier had charged them to move the load. To my friends amazement, the carrier had actually billed said customer around 3500 dollars to move the load. Now, i'm not saying this is a dishonest practice, because sometimes carriers do charge more for some loads. They actually make a huge profit margin on some loads but then turn around haul 20 other loads for next to nothing and everything tends to even itself out in the end. But, why does the company get to make that much money off of the driver while the driver has to continue to run his equipment for the same fuel surcharge that he was getting this time last year even though his fixed and variable expenses have gone up.
This brings me to the second factor that is causing the rates to remain low. The good old bid borads. Bid boards are good for one person and one person alone; the customer. Competitive bid boards are just sinking the rates so low that a lot of decent owner operators are going to be priced right out of the business. This is happening simply because the bulk of the larger and smaller expedited carriers out here will not work together in order to set minimum rate levels. For instance, if all of the carriers got together and said that the minimum rate for a cargo van is going to be 1.20 per mile for all loads, even after we take our cut off the top. Then turn around and bid on freight with the agreed upon minimum rate in mind, load boards like NLM would have no choice but to award the loads to whichever customer is in the area. I mean, if the lowest bid is the same across the board, how would NLM continue to drive down the prices that are billed to haul freight? It simply would not happen in my opinion. I know that sounds a bit utopian, but it could very well become a possibility. Just take a second and think about how much "Ford Chrysler and GM pay car haulers to haul cars from their assembly lines to their dealerships!" Now, having pondered the fact that the automotive carriers have no problem forking over serious coin to move their finished product, why can't they then "in turn" pay us "the independent contractor" what we are worth!
The second part of the bid board factor is the countless loads that are brokered out to other carriers load bords and then rebrokered; and on, and on, and on, and on; etc. In many cases, some of the loads out here are brokered so many times that by the time the driver gets the load, there is little to nothing left in the way of rate per mile. But, once again, we take the load either to move into a better area, or simply because we need to keep moving. Case in point. I picked up a load in Norfolk Virginia about a week and a half ago. As it turns out, this particular load was booked by FedexCC for x amount of money "or whatever rate they charge etc." Then FedexCC brokered it out to some other logistics company "because they did not have a cargo van in the area" and then this company put it up on the NLM (never say no board). Well, after all was said and done, I ended up moving the load to New York City for a mere 80 cents per mile; with no fuel surcharge. I'm not complaining about the rate "as I knew that I was getting the usual rate from my company." But how many people got a cut of the money before I got my cut? Even my company got their usual 20 cents per mile cut on this load!
I'm just trying to say that we need to do more for ourselves. I know we can't shut things down or anything like that, but we sure as hell can fight for some carrier unity out here. In some cases demand it even. We can also work harder to ensure that loads loads are not being brokered and rebrokered. After all, we are the drivers, we are the folks that get the job done for both our carriers and the customers that our carriers service. I' m not saying that companies are bad "because they do book the loads for us, they employ salesmen to go out and find us new accounts, they collect the money for us, they look for loads while we sleep, and perform many of the clerical aspects of this business for us. I just think that we deserve more. Plain and simple. Our companies should go to bat for us just like Panther did when they they forced Ford to pay out a fuel surcharge! Now, it wasn't much of a fuel surcharge mind you, but it was something. Not only something; "it was a start!" Rememebr, this is still a great business! As long as fuel surcharges and rate per mile can keep up with our growing fixed and variable expenses, we can continue to make a decent living out here on the road.
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