Catch 22

[dhalltoyo]

We have had some offers since Thursday but turned them down because they were priced too low. They were not money-losing loads, but they were not money-makers either. A lot of drivers would have taken them just to stay busy. We don't do that. Running at or near break-even just puts fruitless miles on the truck. We are not in this business to keep busy. We are in it to make money. So, we sit, waiting for profitable freight to haul.

Driving a paid-for truck and being debt-free gives us more freedom to do that than many drivers have. Many live hand-to-mouth. They have to keep the cash flowing in to make their next truck payment and service other debts. So they run freight at break-even levels or worse.

The above "Words of Wisdom" were taken from a post by Phil Madsen. These two paragraphs address major concerns within the industry today.

The economy has created a "Just Keep Your Wheels Turning" mindset amongst the carriers. Why? Because the carriers are scrambling for every piece of available freight and they do not make a decent profit unless a truck moves freight; therefore, they have digressed to the path of least resistance when confronted with questions regarding load offers.


In the past few days I have had the most unusual load offers ever presented to me. When I questioned the validity, and wisdom, of these offers...the response was, "We are just trying to keep you moving."

Those who actually know the cost per mile to run freight also realize that low profit, or no profit, loads will put them out of business. I have a friend that works for a major carrier. He is a former truck owner himself. He candidly told me, "I know you can't run the freight at that price and make a decent living." He went on to explain, "In this market, the carrier can not survive either unless they take load offer that comes their way."

Ah yes, that is the Catch 22. We require profitable loads to stay in business and the carrier requires any, and all, loads to remain solvent.

Phil's advice to move toward becoming "debt free" affords the O/O the ability to run their business at a profit by not being forced into taking freight that generates little, or no, income.

10 years ago, loyalty was worth its weight in gold. A contractor who keep his equipment well-maintained, conducted him/herself in a professional manner, delivered their services as promised, help to increase a company's base of customers, etc. could expect a fair return for their loyalty and efforts. Business was a "two-way" street.

Not anymore! Today it is like tossing a bone into a pack of ravenous wolves. Whomever grabs it first..."keeps their wheels moving." Unfortunately, that will just cause business oriented O/O's to sit even longer, but those who are financially solvent will weather the storm.

Eventually, the banks will tighten up their lending requirements, all the "buy out" monies will dry up, some carriers will bite the dust and those who are left standing will rise from the ashes.

 

[aristotle]

Rev Dave... I am experiencing the same circumstances as you describe. Expediting today hardly resembles expedting just 4 or 5 years ago. It comes down to oversaturation of available trucks. Add to that a slow economy and a doubling or tripling of fuel costs and we find ourselves sitting days on end. I may eventually move to a straight truck(team) or Sprinter(team). The companies will not look out for their veteran drivers. I love expediting but must adapt to current trends and needs. This solo gig is getting difficult to operate at a profit.

 

[greg334]

David,
Hum…. I think I remember someone else saying that a paid truck is the best thing to have. That person also suggested that you don’t need to have an apartment on wheels that cost more than most homes to make money. AND that person said several times that if one keeps the overhead down, it gives more flexibility on the load offers. I think that you may have missed a few of those posts.

What you are talking about comes down to a serious issue over promoting this work and stressing that the person needs to take time and find a company that fits their needs, not just go on the name or what others are doing.

My experience is my truck cost 10% of Phil’s but I can’t work those numbers and pay the truck off, I didn’t get the offers like others at FedEx seem to get, but so a lot of others didn’t either. In my case, I know why but I fall back to the point that most of the time the company makes or breaks the person, not the person.

I also think that the bigger the company, the bigger lack of any loyalty. There are exceptions, like there are favoritism, a small click of people and all the other stuff. But again this is business, not a country club and for us who treat it as such, we don’t ask for favors and all that crap other than fairness.

 

[Tennesseahawk]

Greg... I agree to a point. A person makes him/herself unless they allow the company to dictate what he/she becomes. Then, they no longer are their own person. It's up to the person to make what they want of themselves. When something goes sour with a company, they have to step up to the plate and either change things within the company, or move on. If they just keep going in a dead-end situation, they are company zombies.

Regarding those who run with the cheaper companies because they give you more miles... they count on you to not know your costs; and in most of the cases, they're right. If you think you need miles, regardless of the pay, then you're nothing better than a dog begging for scraps at the table. And you're part of the problem!

 

[davekc]

Have to agree on a few points by others. The cheaper companies do operate on the premise that drivers don't know what it costs to operate.
Secondly, it is more advantages to run as a debt free operation. We have done it for a long time and it does entertain certain advantages.
With that said, it doesn't mean it is a easy business or you will make millions as some like to portray. They are basing that on results over the last several years. This year has been different for many. Look at all the trucks for sale, including many late model ones.
I could easily say one could be a millionaire in 10 years with a local 30k a year job and invested appropriately. That has little value for the folks that are currently struggling. I recall only a year ago that I heard "this is a easy business that anyone can do and make millions"
A handful were critical when myself and others questioned this philosophy and now we are where we warned folks to be frugal and really understand what they are getting into.
The more self reliant and not carrier reliant, the better off you will be.

 

[OntarioVanMan]

Greg... I agree to a point. A person makes him/herself unless they allow the company to dictate what he/she becomes. Then, they no longer are their own person. It's up to the person to make what they want of themselves. When something goes sour with a company, they have to step up to the plate and either change things within the company, or move on. If they just keep going in a dead-end situation, they are company zombies.

Regarding those who run with the cheaper companies because they give you more miles... they count on you to not know your costs; and in most of the cases, they're right. If you think you need miles, regardless of the pay, then you're nothing better than a dog begging for scraps at the table. And you're part of the problem!

So in other words "The tails waggin the dog?"

 

[CharlesD]

It is something of a catch-22 regarding what loads to take, but you really have to know your costs and you have to be patient as heck out here. I've been outbid three times today on loads out of Denver. There is freight moving out of here, but I'm not going to move for that cheap. I saw three pallet loads going for .85 a mile with no fsc. People bidding a flat .85 a mile for three pallets at over 2000 lbs. What kind of moron runs that load for that rate? Not me. There's no such thing as a backhaul folks.

 

[OntarioVanMan]

It is something of a catch-22 regarding what loads to take, but you really have to know your costs and you have to be patient as heck out here. I've been outbid three times today on loads out of Denver. There is freight moving out of here, but I'm not going to move for that cheap. I saw three pallet loads going for .85 a mile with no fsc. People bidding a flat .85 a mile for three pallets at over 2000 lbs. What kind of moron runs that load for that rate? Not me. There's no such thing as a backhaul folks.

That would be like .77 plus .08 FSC for a Cat Sprinter....

 

[ATeam]

I invite readers to consider some of the ways drivers and carriers view each other.

Us against them

Them against us

Us for them

Them for us

Us needing them

Them needing us

Us with them

Them with us

When you think of yourself and your carrier, how would you describe your relationship?

At this year's Expedite Expo (my first ever), I got to meet and visit with dozens of carrier representatives and contractors. They represented everything from Three-truck operations to the major companys all readers know. The diversity of their customer bases and business approaches ranges wide.

I came away from the show believing that one's level of success (as personally defined) in expediting has less to do with the carrier you choose and more to do with how well your carrier and you form an "us-with-them/them-with-us" working relationship.

The better you understand how a carrier operates, the more likely it is that you will choose one that aligns with your values and business approach; and the more likely it is you will meet your carrier's needs and your carrier will meet yours.

The waiting-for-freight episode the Reverend quoted above is just part of the picture. There have been similar espisodes before and there will be gain. The bigger story is, we figured out before we entered the business what we wanted from a carrier and what we were willing to give in retrun.

From our first day in the business, it has been an "us-with-them/them-with-us" driver/carrier relationship. We find it easy to work with and prosper with our carrier because our carrier finds it easy to work with and prosper with us. We understand our carrier's financial needs. Our carrier understands ours. When it comes to serving the customer, people at our carrier hold up their end and we hold up ours.

In good times and bad, our "with" relationship is the basis of the successful and profitable run we enjoy with our carrier.

 

[OntarioVanMan]

as in a Team?? you need us/we need you, so lets work together and we'll both prosper.

 

[Moot]

I think I view things a little differently than most E.O. members. In my current situation I see my carrier as a competitor. We are both competing for a portion of the pie. They will try and take as much as they can get. It is my duty to see to it that my van and I get a fair portion of that pie and whatever extras, like whip cream I can get.

For most of the time I was with my former carrier I was paid a percentage of the total freight charges. I viewed that relationship as me paying the carrier 41% to procure loads, handle insurance and provide me with coffee and a restroom when passing through Ann Arbor. In other words; they worked for me!

 

[aristotle]

Moot... I admire the inner workings of your mind. *LOL* I'm gonna borrow(steal) some of your ideas to incorporate with a few of my own. This hybrid mix might produce great results or be an unqualified disaster. Time will tell.

 

[Moot]

This hybrid mix might produce great results or be an unqualified disaster. Time will tell.

So far it has worked for me. I'm still plugging away.

 

[OntarioVanMan]

ever notice a number of successful expeditors are more prone to be off the wall thinkers???
Like mind over matter...if you don't mind, it doesn't matter....

 

[aristotle]

I've been plugging away as well for several years, but feel like I've hit a plateau, actually a rut. I'm tired of treading water. I got twenty more years to give and want to turn it up a notch. Considering a move to teaming in a Sprinter or straight truck.
Given the current climate in expediting, Moot, where do you think the best earning potential is?

 

[OntarioVanMan]

I'd say go for the top...Team straight and all the qualifications you can get....The more pieces of the pie you possess the bigger the pie....after that...Team Sprinter...

 

[Moot]

Given the current climate in expediting, Moot, where do you think the best earning potential is?

I would say husband/wife team in a tractor/trailer.

 

[aristotle]

My wife has a well established career in healthcare. No chance she'd go OTR. I hold a Class-A cdl, w/Hazmat but have no interest in driving a T/T again. Would readily consider teaming in straight truck, though.
Would I be way off base to think a Sprinter team might be almost as profitable as a S.T. team when one considers a Sprinter gets 22+mpg and is cheaper to operate?

 

[Moot]

I have no team experience in expedite. But I think no matter what size vehicle you drive, a team operation should have all income going to one household. Be it husband/wife, boyfriend/girlfriend, or life partners; one income, one household.

 

[Tennesseahawk]

Aristotle... I may have a answer for you. Independence. You have not only all of the responsibilities, but you have top earning potential by naming your rate. Talk about a thrill ride! Instead of answering the phone with, "Whatcha got?" You can answer it with, "Billy Joe Jim Bob's Expediting; Aristotle speaking."

If you truly don't want to do t/t again, then go for the biggest straight you can. But if it's the length of the 48/53'ers you hate, I suggest ease on back to a pup or 40' trailer. Read the few recent threads on the subject.

Of course, disregard this if you lose your documents like the Clintons; or if you have an unintelligible voice like James Brown. It just wouldn't work.