Economy Slowdown
- Thread starter slinger44
- Start date
Twenty years ago, when Roberts Express was the only nationwide, door-to-door, exclusive use, time critical expedited freight carrier, there was more fright for their trucks than we could handle. As the years went by, the quantity of freight increased as the Just-in-time shipper/consignees required expedite services in greater numbers.
During the late '80's, early '90's, the demand for trucks was recognized by many carrier savvy employees who either formed their own company or hired onto other carriers to implement or expand their expedited operations. Also, it didn't take long for the Mom and Pop Owner/Operators to see that the profit potential in one-truck operations could be doubled or better by expanding to fleet operations. Many former Roberts Express O/O's went on to own several trucks leased on to different carriers.
Eventually, the market was saturated with trucks as the nationwide carriers were joined by regional expediters. www.expeditecarriers.com is one source that lists over 100 of these carriers and there are perhaps a couple of hundred more carriers that aren't listed.
So, to answer Slinger44's question, "is there is less freight to go around", I'd non-empirically say NO, there is not less freight, there are more trucks hauling the expedited freight. The folks that Slinger44 sees throwing in the towel probably had impractical expectations of their opportunities, let their overhead get out of hand, signed on with a company that didn't suit their particular requirements or capabilities, or just didn't make it for myriad other reasons.
Successful expediters don't just buy a truck and wait for a carrier to solve all their problems; successful expediters buy a business and create solutions to problems as they arise.
During the late '80's, early '90's, the demand for trucks was recognized by many carrier savvy employees who either formed their own company or hired onto other carriers to implement or expand their expedited operations. Also, it didn't take long for the Mom and Pop Owner/Operators to see that the profit potential in one-truck operations could be doubled or better by expanding to fleet operations. Many former Roberts Express O/O's went on to own several trucks leased on to different carriers.
Eventually, the market was saturated with trucks as the nationwide carriers were joined by regional expediters. www.expeditecarriers.com is one source that lists over 100 of these carriers and there are perhaps a couple of hundred more carriers that aren't listed.
So, to answer Slinger44's question, "is there is less freight to go around", I'd non-empirically say NO, there is not less freight, there are more trucks hauling the expedited freight. The folks that Slinger44 sees throwing in the towel probably had impractical expectations of their opportunities, let their overhead get out of hand, signed on with a company that didn't suit their particular requirements or capabilities, or just didn't make it for myriad other reasons.
Successful expediters don't just buy a truck and wait for a carrier to solve all their problems; successful expediters buy a business and create solutions to problems as they arise.
I would say the Expediting industry has grown faster then the overall economy. These days with high FSC's ,traffic managers are probably looking at consolidating shipments that may have shipped as a single expedite shipment.
I would keep your costs as low as possible,don't rush out to buy that $170K Class 8 with all the bells and whistles until you can justify that type of vehicle. Extra Chrome adds nothing to the bottom line.
Think where that load that looks good will unload. Going to Wyoming or Montana means deadhead bucks back to a decent shipping area. The hard working business guys/gals survive slowdowns,the paid tourist does not.
I would keep your costs as low as possible,don't rush out to buy that $170K Class 8 with all the bells and whistles until you can justify that type of vehicle. Extra Chrome adds nothing to the bottom line.
Think where that load that looks good will unload. Going to Wyoming or Montana means deadhead bucks back to a decent shipping area. The hard working business guys/gals survive slowdowns,the paid tourist does not.
dispatchn1
Seasoned Expediter
I would agree with both terry and rich not less freight just alot more trucks and alot of consolidating going on.
Great responses. It is a business and has to be constantly looked at that way. It is amazing how many don't, and then wonder why they are broke? Expectations and true realizations of the business are the key.
Davekc
owner
21 years
PantherII
EO moderator
Davekc
owner
21 years
PantherII
EO moderator
NoProblem
Expert Expediter
I disagree with popular opinion and agree with slinger44.
Currently, freight overall is only down approx. 50% from the same period last year.
This 50% figure is actually up from being down approx 75% for the first 4 or 5 months of this year. In other words, overall tonnage of freight is down alot in comparison to last year.
This reduction in tonnage varies, but is happeneing not only in expedite freight, it is also apparent with truck load, bed buggers as well as virtually all freight that transports via ground. Cheap truckload freight is most plentiful - as always.
My input here is based on, not only actual observation of available freight, but also from personal conferences with many of the top players in this game, from P2 to FedexCC to other biggies - who all admit that "it's been an off year for freight so far".
Those folks who have run strong this whole year with any consistancy are lucky. The rest are struggling and have to really work at making any profit at all.
3rd quarter is almost here and we are seeing a nice increase in available freight. So far, it still doesn't compare with last year, but is encouraging non the less!
Currently, freight overall is only down approx. 50% from the same period last year.
This 50% figure is actually up from being down approx 75% for the first 4 or 5 months of this year. In other words, overall tonnage of freight is down alot in comparison to last year.
This reduction in tonnage varies, but is happeneing not only in expedite freight, it is also apparent with truck load, bed buggers as well as virtually all freight that transports via ground. Cheap truckload freight is most plentiful - as always.
My input here is based on, not only actual observation of available freight, but also from personal conferences with many of the top players in this game, from P2 to FedexCC to other biggies - who all admit that "it's been an off year for freight so far".
Those folks who have run strong this whole year with any consistancy are lucky. The rest are struggling and have to really work at making any profit at all.
3rd quarter is almost here and we are seeing a nice increase in available freight. So far, it still doesn't compare with last year, but is encouraging non the less!
G
guest
Guest
50% drop in business? I Would look for another company to run for. I would have to say that FedEx is up about 3% to 5 % from this time last year. Our trucks have been running good the last few weeks.
Drive safe
Dave Mayfield
FEDExCC/Roberts Express O/O Since 3/1/1995
C1847,C2045,D3397,D5047
Drive safe
Dave Mayfield
FEDExCC/Roberts Express O/O Since 3/1/1995
C1847,C2045,D3397,D5047
No Problem:
It seems you support my opinion that freight is not necessarily down but that the freight market is saturated with trucking companies and trucks, many of whom are willing to underbid the established carriers to capture a new customer.
I would suggest that ABlair's 50% reduction in freight is at least partially a result of your diminished market share because of a plethora of trucks and carriers? I think the biggies at the other carriers with whom you communicate would admit that competition from the ever increasing expedite carriers is affecting their bottom line.
Do you have a specific source for the following statistics you mention?:
"This 50% figure is actually up from being down approx 75% for the first 4 or 5 months of this year. In other words, overall tonnage of freight is down alot in comparison to last year"
It seems you support my opinion that freight is not necessarily down but that the freight market is saturated with trucking companies and trucks, many of whom are willing to underbid the established carriers to capture a new customer.
I would suggest that ABlair's 50% reduction in freight is at least partially a result of your diminished market share because of a plethora of trucks and carriers? I think the biggies at the other carriers with whom you communicate would admit that competition from the ever increasing expedite carriers is affecting their bottom line.
Do you have a specific source for the following statistics you mention?:
"This 50% figure is actually up from being down approx 75% for the first 4 or 5 months of this year. In other words, overall tonnage of freight is down alot in comparison to last year"
raceman
Veteran Expediter
It is my understanding that some friehgt business is up by 11 %. This comes from a fantastic source at a particular compnay who can speak up here if he wishes.
I, as you all know still run for an expedite company, well actually more like an LTL time sensitive company and do in fact run dedicated for Ford. I do get other freight from my carrier if my route is slow or I simply wish to blow the stink off.
What I see is the carrier I am leased on with does a varity of things and keeps truck numbers down. They actually will rent trucks and temp drivers when things get real busy then scale back when things slow. This seems to keep all full time trucks happy.
There are way too many expedite companies and trucks out there for folks to feel as though they are getting rich now days. I do not see less freight. I am in complete agreement with Rich and Terry on this one.
I feel more like an outsider now because of what I do but I still keep in touch and watch and listen to everything. And I will say the answer is in the posts from Terry and Rich if you read carefully. Although I say if you can by the chrome, buy the chrome, if not save your money for the slow times. The best thing to do is save some, spend some and do not own more than you need to do the job. My 99 is still making money and there is no truck payment. Those of you who have big truck payments can in fact hurt bad in slow times. Been there done that.
Good luck to all
Raceman
OTR O/O
I, as you all know still run for an expedite company, well actually more like an LTL time sensitive company and do in fact run dedicated for Ford. I do get other freight from my carrier if my route is slow or I simply wish to blow the stink off.
What I see is the carrier I am leased on with does a varity of things and keeps truck numbers down. They actually will rent trucks and temp drivers when things get real busy then scale back when things slow. This seems to keep all full time trucks happy.
There are way too many expedite companies and trucks out there for folks to feel as though they are getting rich now days. I do not see less freight. I am in complete agreement with Rich and Terry on this one.
I feel more like an outsider now because of what I do but I still keep in touch and watch and listen to everything. And I will say the answer is in the posts from Terry and Rich if you read carefully. Although I say if you can by the chrome, buy the chrome, if not save your money for the slow times. The best thing to do is save some, spend some and do not own more than you need to do the job. My 99 is still making money and there is no truck payment. Those of you who have big truck payments can in fact hurt bad in slow times. Been there done that.
Good luck to all
Raceman
OTR O/O
NoProblem
Expert Expediter
***Do you have a specific source for the following statistics you mention?:***
Sure. With a fairly broad customer base, I see available loads all day long.
Between all of our accounts, the amount of available load offers for expedite freight fell drastically (approx. 75%) after the first of the year. I mean, it was night and day. Stuart Sutton of GPS411 fame noted a similar reduction for the first part of this year in his email update a month or two back.
Note that I can only compare last year to this year because I only started actually seeing available freight January 2005 when I came off the road. I would estimate that I have personally spoken with a few dozen carriers who all experienced the same type of reduction in available tonnage.
As of the last few weeks, across the board available load offers have increased by about 25% and seem to show signs of ramping up nicely into the third quarter. When the numbers jump like that, trust me, you cannot help but notice it.
The drop in available freight for the first two quarters was obvious to many carriers, including the biggies. Because they are biggies, I'd guess that see an increase in available tonnage sooner than the rest of us, but they saw the same, or a similar reduction that the rest of us did for the first few months I assure you.
***I would suggest that ABlair's 50% reduction in freight is at least partially a result of your diminished market share because of a plethora of trucks and carriers?***
Since we are a small carrier, the one thing we do not have is too many trucks
It is a part of my job to see a pretty fair chunk of the market every day, and in regards to available tonnage this year, it has been way down when compared to last year.
***I think the biggies at the other carriers with whom you communicate would admit that competition from the ever increasing expedite carriers is affecting their bottom line.***
Increasing competition is a part of it, but when you have a fairly broad customer base and you experience a big reduction of tonnage across the board, in my opinion, slinger44 is correct in saying there is less freight to go around.
I'm just happy to say that, in my opinion, freight is picking up nicely - across the board!
Sure. With a fairly broad customer base, I see available loads all day long.
Between all of our accounts, the amount of available load offers for expedite freight fell drastically (approx. 75%) after the first of the year. I mean, it was night and day. Stuart Sutton of GPS411 fame noted a similar reduction for the first part of this year in his email update a month or two back.
Note that I can only compare last year to this year because I only started actually seeing available freight January 2005 when I came off the road. I would estimate that I have personally spoken with a few dozen carriers who all experienced the same type of reduction in available tonnage.
As of the last few weeks, across the board available load offers have increased by about 25% and seem to show signs of ramping up nicely into the third quarter. When the numbers jump like that, trust me, you cannot help but notice it.
The drop in available freight for the first two quarters was obvious to many carriers, including the biggies. Because they are biggies, I'd guess that see an increase in available tonnage sooner than the rest of us, but they saw the same, or a similar reduction that the rest of us did for the first few months I assure you.
***I would suggest that ABlair's 50% reduction in freight is at least partially a result of your diminished market share because of a plethora of trucks and carriers?***
Since we are a small carrier, the one thing we do not have is too many trucks
It is a part of my job to see a pretty fair chunk of the market every day, and in regards to available tonnage this year, it has been way down when compared to last year. ***I think the biggies at the other carriers with whom you communicate would admit that competition from the ever increasing expedite carriers is affecting their bottom line.***
Increasing competition is a part of it, but when you have a fairly broad customer base and you experience a big reduction of tonnage across the board, in my opinion, slinger44 is correct in saying there is less freight to go around.
I'm just happy to say that, in my opinion, freight is picking up nicely - across the board!
Freight volumes are much different from carrier to carier. If hauling for the big three, there was a drastic slowdown. Some was a result of gas prices killing the large vehicle sales. Also, alot of pre-order on parts last year gave the appearance of being very busy. In reality, GM and Delphi were ordering like crazy because of looming strike threats.
At the same time, foriegn automakers can't keep cars on the lot. The ones servicing those customers are busy.
When a sector really slows down, the cut throating begins. For many small outfits, it becomes nothing but survival.
I'm with Steve in that freight volumes are increasing so it should be great for everyone.
Davekc
owner
21 years
PantherII
EO moderator
At the same time, foriegn automakers can't keep cars on the lot. The ones servicing those customers are busy.
When a sector really slows down, the cut throating begins. For many small outfits, it becomes nothing but survival.
I'm with Steve in that freight volumes are increasing so it should be great for everyone.
Davekc
owner
21 years
PantherII
EO moderator
arkjarhead
Veteran Expediter
It seems to me the auto industry is not a good one to bank on. Nuff Said
Jefferson3000
Expert Expediter
Hey guys. Freight is down in all sectors it seems. I speak from the air freight sector, and it has been down here as well, especially during April and May. Air freight is generally made up of true air freight, or that which is flown at some phase of the venture, and then delivered, as well as the economy "deferred" freight, that ends up been moved from city to city by a feeder network such as Forward Air, Xpress Global, or Megatrux and then trucked on smaller vehicles. There has definitely been a drop in the expedited deliveries, which may be partially expected with gas prices. I've had so many deliveries cancelled within five minutes of saying YES, mostly because the customer (or sometimes a greedy 3PL) choked and fell from their chair when they heard the price.
That being said, I must learn to work within the present economy. I have to work smarter, as well as turn down a few that would simply waste my time, as well as my gas.
That being said, I must learn to work within the present economy. I have to work smarter, as well as turn down a few that would simply waste my time, as well as my gas.
joebob1_30132
Expert Expediter
YEP<NUFF said
While it takes some effort to determine the actual numbers, two things are certain to fluctuate; the amount of freight available to haul, and the number of trucks available to haul it. As those numbers fluctuate in the marketplace, so will the cost of shipping freight (as the shipper sees it) and the revenue derived therefrom (as the carrier and driver sees it).
Smart expediters understand those facts of expediting life and develop not only survival strategies for the slow times but long-term prosperity stratigies as well. It's not about freight being slow. Expediters KNOW freight will be slow at times. It's about structuring your business for both busy and slow times.
Smart expediters understand those facts of expediting life and develop not only survival strategies for the slow times but long-term prosperity stratigies as well. It's not about freight being slow. Expediters KNOW freight will be slow at times. It's about structuring your business for both busy and slow times.
Makes all that more sense to have the ability to find and haul your own freight. I see little reason to rely on one carrier exclusively if they can't keep you running continously.
If they do keep you running consistently, then I would stay the course.
Davekc
owner
21 years
PantherII
EO moderator
If they do keep you running consistently, then I would stay the course.
Davekc
owner
21 years
PantherII
EO moderator
Sorry Terry and Rene, but I have to disagree with you on this. Freight volume is down period... If you think about it, how many times have we seen post on here saying they don't see the expedite trucks and vans out here like they used to. I do agree that their are many more expedite companies then ever before. BUT you still don't see them (expeditors) on the road like we used to. I may be new to this forum but I've been in transportation since 1976. So I have been through the bad times of prior decades. It still isn't as bad as I have seen it in the past (yet), but the bottom line is volume is down.
Jefferson3000
Expert Expediter
I have to agree with you, Dave. That is what I've had to do in all of this. And what ATeam said about having a business plan is soooo important. The freight industry has had to adapt in order to remain relevant. As Owner/ Operators, I think we will need to become flexible as to our methods we use in the years to come. If not, we will become either broke or extinct, with no one to blame but ourselves.
Jeff
Jeff