I can tell you why rates are so low. Its not fuel.

bfields115 · Apr 23, 2016

Brokers, carriers and shippers have discovered that they can drive down the cpm for the driver by simply saying, "would you do it for .70 cpm? Or would you do it for .60 cpm? The brokers are largely maintaining their rate while increasing the amount they keep from the driver. Lets say a brokers bids the load at 1.00 per mile. They used to then give the driver .80 per mile. Now they are saying to the driver, "Hey, can you do it for .70 or less? So instead of keeping .20 per mile, they are keeping .30, or more. As drivers, we tend to trust our carriers or brokers and count on them. All of them are not doing this, but a high enough proportion of them are to have a large negative impact. Many brokers and carriers know that rates that are too low will drive the driver out of business and so avoid the "short changing" the driver. If you put drivers out of business, who is going to keep brokers and carriers in business? Many, however, just don't think about that. Its about getting that extra for the moment. Idiots. Driving a van for less than .75 cpm as an owner operator, at current fuel prices, will not keep you in business in the long term, even if your van is paid for. Vans don't have eternal life. Savings have to be built. Insurance, maintenance, etc. Lets say a broker has a load and they have 2 vans in the area, they will call one driver and ask how much they will do it for. If that driver says .80 cpm and has been sitting for 3 days, they will call the other driver that has been there for 1 day and ask them if they would do it for .70 cpm. Guess who gets the load? This did not use to happen at the scale it is happening now. If drivers simply stopped running at these rates it would stop. You will not be running for long anyway. Wake up.

jcochristoph · Apr 23, 2016

Hear hear!

Dynamite 1 · Apr 23, 2016

That's why we run for a carrier that pays on % and is totally transparent has to what they charge the customer. On % it makes no sense for the carrier not to get as much as possible for the load !!

BigStickJr · Apr 23, 2016

It makes sense for the broker with the .60 vans to get as much as possible,also.
With the % carrier they are required by law to give you proof of the rate.
Edit: proof of rate may not be required in the unregulated segment.

BigStickJr · Apr 23, 2016

May Day May Day
A good day for everyone to turn down any loads under a buck.
Enticed by doubling up ? Take $2.
Make the agents get back to the customer with I can't move it that cheap.

Easier to get it going with OVM at home.

Turtle · Apr 23, 2016

Dynamite 1 said:
That's why we run for a carrier that pays on % and is totally transparent has to what they charge the customer. On % it makes no sense for the carrier not to get as much as possible for the load !!

That's the right answer.

Drivers leased to a single carrier are, generally speaking, getting better rates than are those who obtain their loads from brokers or the multi-carrier model, because of supply and demand. When contracted to a single carrier, the carrier has a moral, ethical and legal obligation to be either transparent (percentage) or honest (flat rate), whereas a broker looking to broker out to the lowest rate has no such constraints. In the past here on these boards people have flatly stated that as long as the rate offered to them makes sense for them they'll take the load and don't care what the broker is making. Brokers are counting on that, which is why they ask "would you do it for .70 cpm? Or would you do it for .60 cpm?" and then shop for the lowest taker.

Brokers and multi-carriers have no vested interest in keeping you loaded - their only interest is making as much money off each load as possible. As more and more drivers move from exclusive carriers to the broker/multi-carrier model, the stronger the upper hand of the brokers becomes, and the less constrained they are within the bounds of morals, ethics and transparencies. That's why rates are pushing downward. A carrier won't take on more trucks than it can keep loaded, but multi-carriers and certainly brokers have no such considerations.

davekc · Apr 23, 2016

I think it still comes down to the integrity of the carrier. I have seen percentage companies run it through a 3pl or subsidiary in order to skim a percentage off the top. Flat rate is fine as long as the rate is there. We do both and the flat rate is considerably higher than the percentage. Just have to look at the whole picture.

danthewolf00 · Apr 23, 2016

With flat rate you always know what your getting a mile because it's set in stone in the contract....how ever I have seen the carriers run loads thru their brokerage divisions to skim then bid on said load and tell a driver that's whats in the load.

coalminer · Apr 23, 2016

Here is my scenario as to why rates are dropping....

Morning meeting at the big brokers and the topic comes up, how can we make more money? Well they can't raise their rates to their customers so the only other way is to get the loads covered for less. So someone says here is how we are going to do it, take our 5 biggest carriers and start with carrier 1 and send as few loads their way as possible, and when they ask why, tell them their rates are too high, cha Ching!!! Then move onto carrier 2 and do the same thing, and when you get to carrier 5 go back and start over again. And if you really want to make this work, you get your buddies at other big brokers to do the same thing.

Welcome to big business 2016, the future sucks!!!

tknight · Apr 23, 2016

coalminer said:
Here is my scenario as to why rates are dropping....

Morning meeting at the big brokers and the topic comes up, how can we make more money? Well they can't raise their rates to their customers so the only other way is to get the loads covered for less. So someone says here is how we are going to do it, take our 5 biggest carriers and start with carrier 1 and send as few loads their way as possible, and when they ask why, tell them their rates are too high, cha Ching!!! Then move onto carrier 2 and do the same thing, and when you get to carrier 5 go back and start over again. And if you really want to make this work, you get your buddies at other big brokers to do the same thing.

Welcome to big business 2016, the future sucks!!!

That's called price fixing but proving its a whole different animal

bfields115 · Apr 23, 2016

Great insightful responses. I am headed to an exclusive carrier again. I did do much better for some time with the multi-carrier arrangement. Not anymore. Again, thanks for break downs of the current state of this business. I would buy all of you the 2 for $3 hot dogs and nachos on the side at the flying j. Where I live now.

ohiomike08 · Apr 23, 2016

BigStickJr said:
It makes sense for the broker with the .60 vans to get as much as possible,also.
With the % carrier they are required by law to give you proof of the rate.
Edit: proof of rate may not be required in the unregulated segment.

What law would require a % carrier to give you proof of the rate?

BigStickJr · Apr 23, 2016

Look up Federal Truth in Leasing.
(49 CFR 376).

davekc · Apr 23, 2016

BigStickJr said:
Look up Federal Truth in Leasing.
(49 CFR 376).

It is that very reason that they run freight through a subsidiary or third party outfit that they own or control. Even when rates are "supposedly low", ever notice that many carriers, especially large ones are still raking in millions? Just follow the money. One of those "watch what they do, and not what they say".

BigStickJr · Apr 23, 2016

Dave's right.
It's easier to tolerate if you understand what's happening.
Carrier X will book the load through Carrier X logistics. Carrier X logistics sells it to Carrier X Transportation for 80 cents on the dollar.
Carrier X Transportation gives it to their O/O for 65% or whatever.
So you're really getting 65% of 80 %.
Plug in your personal numbers.
If the carrier's greediness doesn't go overboard to the point that it becomes a waste of time on this side of the desk we can get by.
It makes me be a little more aggressive when I do get a chance to negotiate on anything.

Lawrence · Apr 23, 2016

bfields115 said:
Great insightful responses. I am headed to an exclusive carrier again. I did do much better for some time with the multi-carrier arrangement. Not anymore.

Good. common. sense.

davekc · Apr 23, 2016

As I have posted probably well over ten years ago and several times since, "cash is king" in this business. Everyday is sitting in front of a big roulette wheel and giving it a spin. Expediting is so much fun.

bfields115 · Apr 23, 2016

Again, I appreciate all the insightful responses here. Everything would change if drivers would simply stop moving for such low rates. It could all just change in one week if drivers worked together in any capacity. Many drivers also act like they are employees when they are not. Many brokers and carriers also act like drivers are employees. Of course I am talking about when you are under a 1099. I have been without work now for 2 full weeks. I have lost 13 bids in the last 3 days between .70 and .80 cpm. I have not been home in months. One can simply not continue doing this work with the level of exploitation by these numerous brokers and carriers to the drivers. I am not out here to get rich. This is a lifestyle, however, there are minimum parameters and or boundaries that must be maintained for the sake of continuity and progression. In the end, the drivers have the ball in their court. The driver sets the pay. And there are too many drivers out here that have few other work options, yet still do not realize how much power they have. Brokers and carriers think most of us are high functioning retards at best often times. They do not realize that many of us simply do not want to work in physical proximity to people like them.