guido4475
Not a Member
So pretty much youre saying it's okay to stab each other in the back, according to your last paragraph.Real nice.
Is it the ECONOMY? Or are we to blame for the low rates?
- Thread starter bubblehead
- Start date
So pretty much youre saying it's okay to stab each other in the back, according to your last paragraph.Real nice.
Do you see Wal-Mart supporting the other grocery stores in the area when they move into a city.
If I lose my business because we are supporting each other are you going to give up your load to help me?
We are business owners and as such our business comes first.
If I lose my business because we are supporting each other are you going to give up your load to help me?
We are business owners and as such our business comes first.
Therein lies the problem. Those who stand up and say NO to cheap freight go unnoticed as the next guy will grab it.
What is the dollar figure on cheap freight? Is it the same dollar figure no matter what part of the country you are in? Can you define cheap freight for all of us here on EO by truck size?
aileron
Expert Expediter
Greg,
To be honest, I only worry about my bottom line. If I don't make money, I do not do the load. I don't care if I am dinged with a refusal. Since my company went to the new load opportunity system, I cannot see my acceptance ratio, but I believe it is waaaay below 50%. Believe me, I would have a 100% acceptance if I would be offered all good loads. If it comes to the point of being let go because of my acceptance ratio, so be it. I will not run loads that are not profitable to me, just for the opportunity to be with a specific company.
Since we are on a flat rate now, I can only play with the deadhead and loaded miles, and extra pay for extra stuff like hazmat and a like.
Last week I got a load opportunity for a hazmat load, 130 deadhead miles and 150 loaded miles, no extra pay for hazmat. Of course I refused it right away. 10 min later I get a call on the phone for this load. The dispatcher says, "I am calling you about this xxx load. You are the only van in the area, the load is ready, the customer is waiting for us. Can you help us out? But we cannot increase the pay". I told her that it is hazmat and if she at least pay me the extra dollars for the hazmat, than we can talk about it, otherwise I am not interested. I cannot do all those miles for .85 per loaded and some .10 a mile surcharge. And a hazmat load at that.
I feel sorry for them, I would like to be able to help them, and I used to help them with cheaper loads when we were on the percentage since I knew it would even out with those great paying loads. But now, I cannot.
Just imagine we all band together and what rate should we jack the rates up to?
How about $1.25 or $1.50 all the way up to $5.00 a mile. Now let’s say we agree on $3.00 a mile and we are all happy! Now two things are going to happen one everyone is going to want to get into this business as we will make easy money. Two, we get an offer to go into an area where there is no freight and we have to come out free no one will take any freight into that area so now the private carrier buys their own truck and now we lose more freight. Now there are so many trucks trying to make easy money we will all have to wait longer for our turn at the $3.00 a mile rate how long will we wait for that load?
Next what will happen is we move our lifestyle up to $3.00 a mile we know it was easy for all of us to band together we now need to raise the rate again.
The real cost of freight is a combination of the least someone is willing to haul it for and then what someone is willing to pay to have the load moved. The combination of these two facts sets the rates.
This may seem cold or sad but this is reality of how capitalism works it comes down to supply and demand.
How about $1.25 or $1.50 all the way up to $5.00 a mile. Now let’s say we agree on $3.00 a mile and we are all happy! Now two things are going to happen one everyone is going to want to get into this business as we will make easy money. Two, we get an offer to go into an area where there is no freight and we have to come out free no one will take any freight into that area so now the private carrier buys their own truck and now we lose more freight. Now there are so many trucks trying to make easy money we will all have to wait longer for our turn at the $3.00 a mile rate how long will we wait for that load?
Next what will happen is we move our lifestyle up to $3.00 a mile we know it was easy for all of us to band together we now need to raise the rate again.
The real cost of freight is a combination of the least someone is willing to haul it for and then what someone is willing to pay to have the load moved. The combination of these two facts sets the rates.
This may seem cold or sad but this is reality of how capitalism works it comes down to supply and demand.
I sure can. Anything under 90 cpm in a van, $1.40 in a straight truck and $1.80 in a T/T would be cheap freight.
And if this happens Greg...you move on. If your acceptance rate falls below what the carrier thinks is acceptable, and most give you a pretty good latitude, YOU as a BUSINESS, are partnered with the wrong carrier.
If I open a store selling widgets at $4 and all my customers come in and tell me they are too expensive and leave without buying anything, telling me that Larry around the corner sells them for $2, I have choices to make. 1) lower my price to get the business if I can find a way to afford it, 2) Move to a different neighborhood where there is no competition or better demographics, 3) Decide that maybe the widget business isn't for me or 4) Be stubborn, blame everyone else and go broke.
There will always be guys who will move cheap freight, because to them it isn't cheap, or they are not smart enough to know what cheap is. There is a steady stream of newbies who many carriers prey on to be that ignorant of their own costs. This is a reality in the trucking business as a whole and it is addicted to this supply of cheap trucks, it isn't going to go away. If we all push back...the carriers will just get someone else to move it because they can.
Not to paint all newbies with the same brush but look at how many of them come on here and are mere days away from orientation and are asking questions like "how much money can I make" or "the recruiter said I would make $x.xx a mile is that true". When they ask questions about trucks they want to talk about big bunks and toys, not fuel mileage and repairs. Now tell me...how many of them are really prepared to run a smart profitable business? After 6 months it's FedEx's or Panthers fault and they are "crooks" or "liars" and now they are broke. Or they had a breakdown and got mad because they had no money to fix the truck and the carrier wouldn't help them out. Even spending just 4 hours reading posts on this website should at the very least send most back to the "is this right for me" phase and do more research.....sadly most just jump in because it sounds so easy.
If you are turning down many loads your carrier offers...why stay? They obviously don't have the freight that fits your business model. It's not thier fault...it's business.
Blaming a carrier for your lot in life is like complaining about the cold weather, if you hate it that much....MOVE.
How do you justify those figures? How long do should I sit until I am offered $1.40 in a bad area while sitting next to my competition who would also like to get out of this area.
pelicn
Veteran Expediter
Those may be your numbers for "cheap" but my numbers for "cheap" are higher than that.
So in that case you are hauling the "cheap" freight and not being a "team player".
We are all different, and have different needs. If you want a set rate, then you need to be a company driver, they get .xx per mile.
Fastrod, the "you" didn't mean you specifically.
Because those fiqures would be the bottom rate for someone to make a decent living in that size of van or truck. How long you sit depends on what Fedex offers and how cheap you are willing to run.
guido4475
Not a Member
Not too long ago, Bob, those rates were the standard in this industry.But along with cut-throat-rate drivers, and Carrier kiss *****, it has went down, while prices of everything else has gone through the roof.I am surprised, with you being a numbers type of guy you are, with all of the fuel-saving things you spent thousands for on your truck, you don't see this!! It's called working smarter, not harder.It doesn't take a rocket scientist to see this.
Guido, I think Team C's point was that the "numbers" are different for everyone and that they should know "their own" numbers and not rely on what someone else has told them.
I can assure you, Bob and Linda know exactly what the numbers are for THEIR operation.
I can assure you, Bob and Linda know exactly what the numbers are for THEIR operation.
fortwayne
Not a Member
I believe it is a combo of factors, but the bottom line is when we have more trucks sitting in a lane than there is freight then the shipper is the one in command.
However, carriers, at least some, are finding new avenues and resources of customers and this in itself in a bonus for all of us. If company ABC has two trucks sitting and their new customers then fills both of those trucks - BAM, two less trucks sitting there for other shippers - creating a more profitable situation for all of us.
I believe we have some carriers that are sitting on the butts waiting for the economy to turn around, waiting for that gravy train to pull in again, instead of actually working to create their own customer base.
Thank goodness for me I am with a company that is always at work for their drivers, for their owner operators and does not sit around waiting for the economy or the government to solve the industries problems - because it ain't going to happen that way.
The industry is what it is - yes we have some low rates, yes we have trucks sitting and yes there are some serious issues.
But, we are not going to solve these issues by sitting on EO complaining about them. We solve these problems by finding an aggressive company that works to build its own future and its drivers future instead of waiting for the industry to weed its way through these problems.
However, carriers, at least some, are finding new avenues and resources of customers and this in itself in a bonus for all of us. If company ABC has two trucks sitting and their new customers then fills both of those trucks - BAM, two less trucks sitting there for other shippers - creating a more profitable situation for all of us.
I believe we have some carriers that are sitting on the butts waiting for the economy to turn around, waiting for that gravy train to pull in again, instead of actually working to create their own customer base.
Thank goodness for me I am with a company that is always at work for their drivers, for their owner operators and does not sit around waiting for the economy or the government to solve the industries problems - because it ain't going to happen that way.
The industry is what it is - yes we have some low rates, yes we have trucks sitting and yes there are some serious issues.
But, we are not going to solve these issues by sitting on EO complaining about them. We solve these problems by finding an aggressive company that works to build its own future and its drivers future instead of waiting for the industry to weed its way through these problems.
bubblehead
Veteran Expediter
Fuel went up, rates went down...tolls went up, rates went down...fines went up, rates went down, parts and labor went up, rates went down...insurance went up, rates went down...arrow went out of business, rates went down...YRC bailed out by AIG who was bailed out Obama, rates went down...cost of CMV registaration went up, rates went down...Qual Com is going up, rates went down...etc. If rates have really gone down (and they have at least to us), then why has everything else gone up? Why does a carrier add and another division/department between the shipper and contractor? Is the shipper really paying that much less? We are expediters, not common carriers. I went to the website of a large carrier today and did a rate quote from zip to zip on an area and load I am familiar with which I normally would get paid $2,200. The rate quote came out to over $9,000. Now that would mean I am only getting 20 something% of the charge which is not even close to my contract rate...so what gives? Is it 9k minus insurance, oh then maybe take $s from the revenue side and move them over to a fuel surcharge colulm (at a different rate) then minus a telecom fee, handling fee inter office re-broker fee, consulting fee and a fee fee. It just seems like for what ever reason, it still looks like as long as other drivers are willing to do this at a loss, we have to deal with the downward manipulation of freight. Cafee, it is supply and demand and the market can be played by the shipper and or carrier. As we are in competition with each other, the shippers and carriers reap the rewards. We will hold our line and if it gets too low then we will get creative and find other means to do this business. Each customer gets our very best service because I want them to call us (the company I represent) back and not brand X. If my service gets you the next load then I have done good because if your are on that next load, I am available for yet another opportunity. So service is what we strive, not cheap rates...I am exclusive use, not common carrier. And I wish that whoever shouted "GOLD" would just go away.
greg334
Veteran Expediter
I understand what you are getting at but reality seems to be a bit different from my point of view.
If we have say 11,000 trucks and 6000 vans in this niche market we call expediting, and a large percentage of these people are independent, then it makes no sense how "we" can band together to change anything when there are 1M to 1.2 M trucks in the industry who are actually effecting the rates and what we end up with.
Dividing the issue up further, we have three types of carriers out there, one is a package delivery company (that is as simple as it gets), one is a 3PL company and the rest are what you would call carriers, common and otherwise. They all have different positions within the market, different goals and needs.
The package delivery company doesn't care about the contractors in their small niche service group, this is an afterthought in many ways and if they did, they could easily bring their brand force to the niche market to wipe out competition. Why don't they do this? Well I think they don't see much difference with this niche service market and what they do in other groups.
The 3PL company is a bit different too, they deal with all kinds of Freight, and again their niche service group is small but augments some of their other work, so it works well for them, even if they farm a lot of their work out.
The others are too vast to comment about, from independents to medium carriers are all scrambling to make a buck in this.
The difference between contractors alone causes any solidarity to fall apart quickly; what one group can do with solidarity, the others can't.
I think that some of us are taking what others are calling cheap freight and using it to get by until things shake out while others don't know better.
This is true to a certain extent. Many companies do not give any latitude in regards to real choices, you can't seek out and make a sale to move your truck and want to control where their fleet is to service the customer. The only latitude you have as a 'business' is watching your budget and/or refusing or accepting any work that comes your way.
This is true but ... who are we to say what is not smart? Removing the Newbie factor out of the equation for a moment, why would someone think that an average $1.10 a mile is all that bad for a straight if they have a tight grip on finances? This doesn't mean someone isn't smart enough but rather looking at what works for them.
The Newbie factor is another contentious issue, we shoot ourselves in the foot many of the times by promoting this business as easy money or some prestige thing to do.
Yes I agree to a point. But look at how many are hell bent on joining FedEx for example. Don't know what makes people think that this is the place to be when there is a few hundred companies to choose from. I asked the question – if you are making money doing something else, why venture into this mess? I get odd answers but most of them come down to two simple things, either they think this is an easy way to make a buck or they are tired of their own lives and want something different. I can understand both but just because life's a b*tch doesn't mean it is better in a cab of a truck waiting for a call.
However many see the “successful” expediter and ask how they did it but don't get the truth how they made their first million or how much work actually went into paying for their truck when times were better. A lot say “work smart” but what does that really mean? I have yet to see an inclusive explanation of how to actually work smart within some of the limitations we have and with newbies the learning curve that they have to overcome.
Yes many times the company is to blame, of course they are. They are the ones who didn't tell the newbie what to expect on the road or even how to handle life in general, they just gave the newbie a lot of incentive to sign on that line and make millions.
I go right back to my question; "Is it the economy or is it the company?"
My apologies for the bold type....I was having to much trouble separating the quotes....a skill I still for some stupid reason have yet to master.
I really dont think ,this industry will have such a big influx of newbies as you might think.First money and loans are very tight , you must have a positive track record (good credit Score) If someone has a good score and x amount of money to invest, Money put away for the rainny day fund.He comes into the business after doing his or her home work. They can run a smart business.
The days of leasing an expediter truck out of Wilmington Oh. (Roberts days ) are long gone.This is a business with a large investment.The price of fuel will shoot up again, your maintance on truck, tolls , cell phone, quad com etc continue to rise. No matter how you look at it. You need to make x amount of revenue per mile to stay in business.A team with out a truck payment can run for less per mile ,then the guy with the big truck payment.I by no means are pushing the idea of cheap freight.Or low pay per mile.I am just stating what Bob and Linda said there cost per mile can be less than the next guy.In the old days life was simple , cheap freight was called a back haul cause its getting me back to the house.Never could figure out how the back haul took them to Michigan and they lived in Georgia.LOL Listen recruiters are no different then a salesman,there out here selling you a dream .There not going to tell you negatives or they couldnt recruit anyone.I understand the fustration of getting low balled on a load.You as a owner operator knows what it takes to make a profit . Therefore you have to take the hit and decline. Its all about your own decisions as you cant expect everyone to ban together and say no. Sad fact but true.
The days of leasing an expediter truck out of Wilmington Oh. (Roberts days ) are long gone.This is a business with a large investment.The price of fuel will shoot up again, your maintance on truck, tolls , cell phone, quad com etc continue to rise. No matter how you look at it. You need to make x amount of revenue per mile to stay in business.A team with out a truck payment can run for less per mile ,then the guy with the big truck payment.I by no means are pushing the idea of cheap freight.Or low pay per mile.I am just stating what Bob and Linda said there cost per mile can be less than the next guy.In the old days life was simple , cheap freight was called a back haul cause its getting me back to the house.Never could figure out how the back haul took them to Michigan and they lived in Georgia.LOL Listen recruiters are no different then a salesman,there out here selling you a dream .There not going to tell you negatives or they couldnt recruit anyone.I understand the fustration of getting low balled on a load.You as a owner operator knows what it takes to make a profit . Therefore you have to take the hit and decline. Its all about your own decisions as you cant expect everyone to ban together and say no. Sad fact but true.
The "true expedite" market is finite. Where do these new customers come from? All carriers scream the "service" mantra because it sounds good. Some shippers are willing to pay high rates for service, but many are looking for the cheapest rate for a particular mode of transportation to ship their freight.
You lost me on this one!