Is your company really smart? Are you?

[ebsprintin]

Sorry, young samuel. You misunderstand me. I was just choosing to not play. As for experience you could probably take me out of the equation and still be way off on your estimation of experience at hand.

eb

 

[Pilgrim]

Anyone here please feel free to respond and let's see what the consensus is. If you ran under your own authority and had a shipper call you to bid a load for them what would you charge for both a sprinter van and a 24' straight truck? Price for each individual run. You know there are 3 competing brokers and or carriers and all can make the alloted times. It is 4:30 est on Friday afternoon. Again your price to shipper all in. give per mile or total.
Shipment: Ball Bearings

Load #1- from Atlanta, GA to Columbia, MO 679 miles
sprinter weight 2800lbs. pick up:1700 est
straight weight 8500lbs. deliver direct


Load #2- from Atlanta, GA to Fort Wayne, IN 657 miles
same weight

Assuming your hypothetical shipper is a small company (not INA, Timkin, etc.) and are not frequent expediters; also assuming that their shipping dept is calling three carriers for quotes, one of which is my small one or two horse expedite company; considering this move is to pick up on Friday afternoon, my quote would be $1.15/mile for the van or sprinter and $1.65/mile for the st. truck - these prices include fsc.

It hasn't been that long ago that prices this low would have been unthinkable. Most decent expedite carriers would have easily charged smaller customers a base rate between 1.25-1.75/mile for a cargo van and 1.85-2.50/mile for a st. truck, plus an additional 15-20% fuel surcharge. In these times the major expedite accounts pay much less because they know some carrier out there will do the work for cheap - especially if their moves go out on a load board like NLM. So long as there is an excess capacity of cargo vans and sprinters out there along with willing drivers/carriers to run for peanuts, we will see low paying rates - it's just the function of the supply and demand curve. All the more reason for drivers to work smart during lean economic times.

 

[Tennesseahawk]

Chef... I understand about bidding what your drivers will take. And I understand ppl will take what they have to to survive. My take on it is this... these lowballers seem to be waiting for rates to go up before they raise them themselves, without realizing they are the ones holding rates hostage.

Leo... taking one on the chin, once in awhile, isn't the overall problem. Maybe it is for Laredo, in particular. But ppl go to Laredo KNOWING rates are generally low there. If they don't like it, why go? I choose to wait there till I get my rate. My company rarely bids too low to refuse one due to circumstances. I've also DHed out - Dallas or Memphis - when I knew it was hopeless. But there IS good paying freight down there... just have to be lucky (there's that word again). Again, I don't fault the occasional guy who wants to get out for .85. I fault the companies who think 1.00, on their end, is a winner. They are plain lazy!

 

[LDB]

Yes, it's imperative to look at the back side of the coin when looking at a load offer. You are exactly right about KNOWING what to expect on the back side. I know of a run that was HUGE and should have been about a 12-14 day total time span for $10,862 but wound up being 30 days due to weather and other circumstances. It was pretty obvious the risks were high and the odds were it would turn out like it did but the huge payday clouded things enough to bet against the odds. We have to know the potential on the backside not just what we see on the front.

Sticking with Laredo as an example and knowing that may mean a reduced rate load out of there, load Friday afternoon in MI, OH, somewhere and get 1200-1400 miles over the weekend at full rate and good fsc for a Monday morning delivery. Alternatively, load Tue. for the same run delivering Friday morning.

Presuming the reduced rate load goes out no later than first thing Tuesday morning the first scenario is probably a good one as it's a long weekend run. Presuming a 10 hour break is required after unloading, the second isn't very good since you're forced to sit over the weekend in Laredo before taking the reduced rate out of there.

As Larry said, we have to KNOW what we are doing and that means looking past the QC screen that appears to have a big money winner offer on it.

 

[chefdennis]

Laredo can be a bit tricky as can most all of the TEX/MEX border cities as to out going freight. From my short time doing this, I have found that if you drop friday the normal wait CAN BE till WEDS!! Now yea, you can get warehouse loads that have come in the week earlier..but freight coming in on fri most often isn't clearing until late tues or early weds....that is one of the reasons for the low rates as dispatch knows that freight coming in from mexico is sitting and will be mid week, so the freight they get sat thru tues can be cheap....

Now that being said, I was dispatched this Sat morning for a pickup in McAllen to Arlington, approx 475 mile...it paid a good rate plus extra for the long DH and hotel since i couldn't deliver until monday.....so it can work either way, but the norm seems to be (at least for my carrier) that if you drop on fri, chances are you are there until weds...that is why i will DH out up to Dallas.....

 

[LDB]

You are obviously looking at the back side of the load and I strongly suspect factoring in d/h to DFW in the overall rate per mile when deciding on what load to take. If it pays right to unload and turn around for DFW that's a good load. If it pays right to wait out 24-48 hours till the next load that's a good load too. It's the ones who don't get paid enough to wait or d/h and then complain about a reduced rate load that are the biggest problem.

 

[jelliott]

Pricing and costing are always a difficult topic. Supply and demand will ultimately provide balance. Much like owner operators that do not understand their costs, the same is true with carriers. Too many small carriers do not understand the true costs of running their companies, let alone their owner operators. These companies are slow to follow the market and raise rates. They are far more focused on the quantity of freight that they move versus the quality of it.

The economic slow down reduced the number of carriers and overall capacity. Yet, some carriers still bid below market or offer gimmicks or incentives. Cheap freight is simply cheap freight. Many of these carriers are still putting money through the cash register to make sure that they can pay next weeks bills. Much like factoring companies this is a slow death to a business. As these companies exit the market or wake up it will help everyone. Too many of these carriers rely on bid boards versus having sales departments and a solid customers base. While bid boards have their place, they cannot be a solid foundation for a company.

As much as owner operators need to say no to cheap freight, their carriers need to do it first!

 

[piper1]

Anyone can doubt my experience or intelligence, but the above post is exactly what I wanted to say...and I'm pretty sure no one can belittle the source or his experience level.

Thank you for the post John.

 

[guido4475]

Pricing and costing are always a difficult topic. Supply and demand will ultimately provide balance. Much like owner operators that do not understand their costs, the same is true with carriers. Too many small carriers do not understand the true costs of running their companies, let alone their owner operators. These companies are slow to follow the market and raise rates. They are far more focused on the quantity of freight that they move versus the quality of it.

The economic slow down reduced the number of carriers and overall capacity. Yet, some carriers still bid below market or offer gimmicks or incentives. Cheap freight is simply cheap freight. Many of these carriers are still putting money through the cash register to make sure that they can pay next weeks bills. Much like factoring companies this is a slow death to a business. As these companies exit the market or wake up it will help everyone. Too many of these carriers rely on bid boards versus having sales departments and a solid customers base. While bid boards have their place, they cannot be a solid foundation for a company.

As much as owner operators need to say no to cheap freight, their carriers need to do it first!

Awesome response and completely the truth. Alot of carriers need to take lessons from this.Thank you.

 

[Pilgrim]

... Too many of these carriers rely on bid boards versus having sales departments and a solid customers base. While bid boards have their place, they cannot be a solid foundation for a company.

As much as owner operators need to say no to cheap freight, their carriers need to do it first!

Here, here and amen!! The carriers that rely on bid boards for the majority of their loads are automatically placing themselves in the situation of offering their lowest price and getting the smallest profit margin with almost every shipment from these sources. Boards like NLM require extremely low rates to begin with, and when things go wrong there's no compensation for things like dry runs or detention. It would seem that most companies would only use these boards to reposition trucks or get out of areas like Nogales, El Paso or Laredo. However, that's obviously not the case in today's market.

 

[jelliott]

To many carriers use the bid boards as their primary freight source. This situation seemed to get worse with the economic downturn. When carriers had to cut cost and staff, many of them downsized their sales staff. Maybe I am crazy (most people in this business are!), but if sales are down you actually should be doing the opposite. You should be cutting costs where you can and actually increase your direct sales efforts!!!!!

Don't get me wrong, the bid boards have a useful place in our industry. They act much like the brokerage companies do in the truckload market. But, with that being said, not too many truckload companies are very successful when brokers are their largest customers.

 

[davekc]

The closer one is to the ACTUAL origin of freight is usually the ones controlling the purse strings.

 

[jelliott]

Dave, you are entirely correct. I think owner operators need to look at other items than they traditionally do when choosing a carrier.

Does the company have a true sales force?
Where is the majority of your freight generated?
Is the company financially solid?

The last one is a challenge. But some items help give insight:

Does the carrier have a long hold back period on owner operator pay?

Does the escrow seem extremely high?

Does the company have any assets such as real estate or trailers?

 

[davekc]

I agree,
There is a lot that goes into the mix. The source of freight and where they are actually obtaining it is a big one. Many of the small companies are at the mercy of the management companies or large logistic/carriers for their freight. A lot of that shows up to the driver in their rates. That is why (using Laredo) some come off the border at full rate, and others are coming out at much cheaper ones.
As for carrier bid boards, they can be a winner for a small outfit because the larger one lacks coverage or the load went through their system and the in house trucks turned it down. That loser load will go for usually a higher rate. The bad news is if there are too many outside carrier trucks, they cut each others throats to haul it. Sometimes cheaper than their own trucks.
That is the case now where two years ago, many bid loads went for high dollar prices. As mentioned, that supply and demand thing.

 

[jelliott]

I agree. Once upon a time the bid boards such as NLM were the "premium" transportation option. Then pricing pressures from the big 3 made them sign up far too many carriers. Supply and demand set in and we saw the result. I guess for a really small carrier it makes sense to run the boards and haul for the bigger carriers. If the rate loss is less than paying for a sales team, it works. The problem is too often the owner operator shares in the downside of that decision.

 

[Jefferson3000]

Dave is right. In a perfect world, all rates would be high. However, if there are five loads coming out of Laredo a day, and 25 trucks waiting for a loads in Laredo, someone is going to be cutting someone's throat, so as not to move north completely empty. Who wants to stay in Laredo for a week, waiting for that perfect high paying load?

 

[Jefferson3000]

BTW, I believe there are greater foes to the rates than lowball expedite carriers. Truckload brokers are currently offering "exclusive use" loads that would fit on a straight, to shippers for the same they pay for truckload. Buck forty? Then the broker finds a carrier to run it for 1-1.05 per mile. I have a customer who does this on a weekly basis. I decided not to compete for all of that. Yes, they know who to call on when the truckload guys drop the ball on pickup and the shipper wants to go home. Or, my customer needs a straight, because a T/T can't maneuver at pick or drop, or they need liftgate. They get just what they pay for.

 

[CharlesD]

I get the bulk of my freight from boards and you can still get good rates if you just stick to your guns and take advantage of the supply and demand thing. If you're in an area where there just aren't that many other trucks, you can get that higher rate if nobody is bidding against you, or if it's a load that many people aren't going to want, like that all night run that shows up late in the day.

 

[moose]

It is none of your business as an owner of a truck , to know your carrier rate .
the one thing you should do , is work with your carrier , to find out what are the true circumstances around your location , or the place you are heading too .
every time you are 'being asked' to low bid your truck , you need a very good rezone to do so , the lower the 'bid' the more questions you should ask.
in many cases , this industry is a 'per load' operations , but as an owner , you should always 'average up' a load .
you can only do that , if you have a written business plan , and know your costs & your goals .
unlike trucking company's ,the well prepared O/O can adjust , and still be profitable over time .

one more thing , Flat rates are not good .
they keep the ball in the carrier field .
you are at their mercy .
Got2Go...