Brokers Say Truckload Rates Rising Fast

[OntarioVanMan]

William B. Cassidy | Jun 4, 2010 5:21PM GMT
The Journal of Commerce Online - News Story


Price hikes of 10 percent or more seen as freight demand rises

Truckload rates are spiking 10 percent and higher as rising freight demand collides with deep cuts in capacity, according to freight brokers.

Freight brokers report that shortages in truckload equipment availability in certain markets and lanes are driving up truck rates in some areas faster than expected.

“Some of the increases have been pretty sharp,” said Doug Waggoner, president and CEO of Echo Global Logistics, a broker and logistics company in Chicago.

Truckload rates in some lanes are up as much as 20 percent, he said, as demand in April and May shot higher than available trailer space.

“In certain markets I’d put it as high as 30 percent,” said Gail Rutkowski, president of Wabash Worldwide Logistics in Chicago. “In some markets you can’t even buy a truck.”

The strength of the truckload freight recovery is evident at CRST International, which is accelerating growth plans to catch up with revenue rising faster than its projections.

“We’re hitting equipment utilization numbers that haven’t been seen in years,” said Dave Rusch, president and CEO of the Cedar Rapids, Iowa-based transportation company.

The carrier said last month it will spend $100 million in the next 18 months to add 700 tractors and 1,500 trailers at three of its operating subsidiaries.

But many smaller truckload carriers may be slow to add capacity, partly out of concern for the strength of the recovery and because of a lack of available financing.

Carriers are also eager to enjoy pricing power they haven’t had in years, Waggoner said. “As far as I can tell, they don’t intend to add capacity anytime soon.”

 

[greg334]

Aren't brokers bad people?

Should we believe these thieves?

Always selling us cheap freight.

 

[OntarioVanMan]

Aren't brokers bad people?

Should we believe these thieves?

Always selling us cheap freight.

No..it is the carriers trying to pawn the cheap unto us....after they take their 30-35% margin...

 

[greg334]

Oh now its the carriers who are screwing us, it's so confusing that I will stick to staying in my sleeper for the rest of the year.

 

[OntarioVanMan]

Oh now its the carriers who are screwing us, it's so confusing that I will stick to staying in my sleeper for the rest of the year.

Let me guess.... now you are testing sleepers? *L*

 

[Dakota]

Let me guess.... now you are testing sleepers? *L*

Isn't there another word for that? starting with a P

 

[greg334]

Dakota ... never mind ... don't you have some work to do?

OVM
No I don't test sleepers. I have repaired a bunch of them, going to do one while I am home in July but not test them.

I enjoy what I do, you should try it. I get to have some fun while trashing things so others can make a decision if they want to buy the junk or good stuff. Pays well most of the time.

I meant hide from the world.

 

[Shah786]

could it be simply because many major trucking companies are buying out small profitable competitors and deep deep discount freight forwards are going belly up as less freight with discounted rate simply Means Good Night all.

I have notice in Ontario Canada specially there is been a lot of buying spree by the big guys but funny they do not change the name and let it go on under same name only way you notice the difference is when U go to pick up the pay check.

 

[Bruno]

Hey now I'm going to become a broker. I want to be an Expedite Broker. If I can make $50.00 to $100.00 off a load and keep drivers trucks moving at a good rate I plan to do it. If I can do 10 to 20 loads a day or more a day that is not bad. I want drivers to be able to call me and know they aren't getting cheated.

 

[nightcreacher]

there is a bill in congress that if it passes,to be a property broker,you have to have regular trucking authority,and come up with a $100000 bond.your going to have to charge more for your service than you plan on

 

[Jefferson3000]

Hey now I'm going to become a broker. I want to be an Expedite Broker. If I can make $50.00 to $100.00 off a load and keep drivers trucks moving at a good rate I plan to do it. If I can do 10 to 20 loads a day or more a day that is not bad. I want drivers to be able to call me and know they aren't getting cheated.

Your whole business model is going to depend on owner ops booking their own loads through you?

 

[Jefferson3000]

there is a bill in congress that if it passes,to be a property broker,you have to have regular trucking authority,and come up with a $100000 bond.your going to have to charge more for your service than you plan on

That kind of nonsense pops up every now and then. If it did pass, it would get drug all the way to the Supreme Court. Some of the largest brokers in this country are not carriers at all. Most of the biggies who are, have their brokerage incorporated separately anyways. So even though they have carrier authority as "Billy-Bob Transportation, Inc.", they would now need both carrier authority AND broker authority to operate "Billy-Bob Logistics, Inc.?

Sounds more like truckstop talk to me.

 

[kwexpress]

Your whole business model is going to depend on owner ops booking their own loads through you?

I havent been much in a while. I dont truck for a living anymore but am thinking about jumping back in.when I know that expedite truckload is back up to at least $3

is it there yet?

is it true that your intent is to let drivers load themself? are you gonna have a company board to look at or is the drivers gonna just take care of themself?

 

[Jefferson3000]

I havent been much in a while. I dont truck for a living anymore but am thinking about jumping back in.when I know that expedite truckload is back up to at least $3

is it there yet?

is it true that your intent is to let drivers load themself? are you gonna have a company board to look at or is the drivers gonna just take care of themself?

Had a friend that is a dispatcher with a truckload carrier tell me on Thursday how he's been scoring loads from brokers for a minimum of $2 for his trucks, anywhere in the country.

 

[Bruno]

If I can get you a 2006 mile load from LA to Nashville. Then set it up with your carrier for the truck to get $1.20 a mile plus .15 a mile
FSC after the carrier takes their cut, you mean you wouldn't do it?

Now I'm talking about a D-unit too.

 

[Jefferson3000]

If I can get you a 2006 mile load from LA to Nashville. Then set it up with your carrier for the truck to get $1.20 a mile plus .15 a mile
FSC after the carrier takes their cut, you mean you wouldn't do it?

Now I'm talking about a D-unit too.

Maybe, maybe not. I'm the CEO, the lead dispatcher for the company, and in the process of weaning myself out of the truck this year. In other words, the truck is leased to my own company. That would come to about 1.59 per mile. Not bad, but not awesome either. Start booking those, and we'll talk.

Is it your shipper out there? Most brokers have lots to say about "double brokering" in their contracts. Just because you used to want to book a broker's load on your trucks with back-haul, doesn't mean you can legally drop it on some other carrier's vehicle.

 

[Jefferson3000]

If I can get you a 2006 mile load from LA to Nashville. Then set it up with your carrier for the truck to get $1.20 a mile plus .15 a mile
FSC after the carrier takes their cut, you mean you wouldn't do it?

Now I'm talking about a D-unit too.

Oh, and for those who think the carrier is always making a killing off of the owner op, if your carrier books you a load from L.A. to Nashville like that from an Alliance broker, 1.60 for a straight is pretty much what your carrier will get it for (could be a bit more, or it could be a lot less), especially if there are any other units around. So if your carrier gives you 1.35 all in, that's already almost 85% of the load.

 

[kwexpress]

If I can get you a 2006 mile load from LA to Nashville. Then set it up with your carrier for the truck to get $1.20 a mile plus .15 a mile
FSC after the carrier takes their cut, you mean you wouldn't do it?

Now I'm talking about a D-unit too.

what works for some wont work for all.
to me it would be about profit. and on such a trip I would only profit about 1,200-1,500 and tie up the truck for 4 days.
that would give me a profit of 300-400 per day.
and alot would depend on dwell time.and how much I made on the trip out.
but as a general rule if you was asking for team service I would ask for $400 more and settle for $200 more.if a single then I would ask for $400 more and stick to that.
however if it was a predispatch that could change everything.but as a general rule a truck should be worth $100 per hour of operation. and a 2000 mile run is gonna eat 40 hours drive time.
thats with a single by the time you load deal with traffic and stop for rest breaks 3 overnights you would burn 70 hours of your life doing this run that breaks down to a little over $21 per hour for all hours its not bad.but its one load and I prefer to stick to runs that I can load and unload in the sameday.I am no expert but if your gonna do this I would try to stick to loads under 500 miles for single and try to get the rate up to at least $1.50 per mile plus fsc.for a straight.a straight is half a truck and again tractors should be getting $3 per mile consistantly.but my thinking is why I decided to sit it out for awhile and most likely why I am still sitting.but good luck to you I think there is a need for this kind of service anything that keeps the wheels turning as long as the cash flow is there.