Major loss in the battle against cheap freight!!

[Humble2drive]

I respect the well intentioned effort that many owners/drivers make to support the effort against “cheap freight”!

Of course, what I am talking about is the fact that some will refuse to accept even one load offer below a certain amount in order to take a stand against highly discounted rates.

If I understand correctly the basic thought behind this is:

If we all take a stand and refuse to run the “cheap freight” the company will not be able to deliver on it’s promise. The next step would be for the company to realize that they cannot continue to sell these low bids and they would be forced to limit their discounting policies in order to get drivers to actually accept and deliver.

In my opinion (and it just my opinion), it doesn’t seem to be working because the carriers are way ahead of the game on that. They have set up a win-win situation that takes control away from the drivers.

Here are a few examples:

* Fleets consist almost entirely of Independent Contractors, this means very little capital investment by the company. Brilliant!

*Constantly bring on new contractors. Why not? The more trucks that are out there and available to run, the better the chance of getting the load covered. Also, the more drivers that compete for that precious freight, the better the chance of getting that load covered for less money. Genius!

Now, it appears to me that the latest development could be the final knockout blow in the battle. THE LOAD OPPORTUNITY

Yea, I know. It’s been discussed here before, but now it is a little different. As this system is being perfected it is effectively taking away the drivers ability to negotiate a better rate while at the same time quickly locating the driver who is able and/or willing to take it. I have recently noticed that opportunities are being sent out to a high number of express centers covering a very wide geographic area. It makes perfect sense. If the load opportunity is sent out to enough trucks at the same time that there is bound to be a driver that will take it at what ever rate it is being offered at. Maybe their truck is paid off, maybe they are retired and just RVing it, maybe it is taking them home or maybe they are just poor at math.

How do you compete with that? How do you take a stand against cheap freight with a system like that??

I am posting this to the general forum vs. the FECC forum because any system that is this effective in helping a carrier locate a truck quickly that is willing to run at a deep discount will be of great interest to all other carriers.

Am I being overly dramatic or could this change be the beginning of the way expedited freight will be managed in the future?

Disclaimer: The above post is the humble opinion of one driver. It is not intended to be fact or to give advice. Please consult your Attorney for all legal matters, your Doctor for all health matters and your Accountant for all financial matters.

 

[OntarioVanMan]

Nope, your absolutely correct....it should be called a "Fishing Opportunity" if you throw your line out there into a stocked pond, one is going to bite for any of the reasons you stated above....I have enough friends at the Fed to confirm my belief.
The offers and the distances of DH are atrocious, especially in surface..And now dispatching as early as Thursday for a Monday or Tuesday pick-up? Whats that all about? ...WG/TVal seems better off....

 

[davekc]

I would say it depends on how the carrier operates. Your description of what would happen is exactly what I posted many months ago. Several cheerleaders complained because I wasn't with your carrier. Still don't think one would have to be in order to see a motive. But that aside, I don't believe every carrier will follow that path.
In our personal situation, if the load offer is something we don't like, we can broker own without any penalty. I don't believe I could operate in the environment you describe and remain profitable.
As far as bidding, we lost a load early Monday morning in Tulsa to a WG truck. The Fed bid that load at 1.40 and the TVAL truck parked next to us took it. Total surprise they would take something at that rate. That 1.40 was the total rate. Hard to tell what the truck actually got out of that? Thankfully we got another load several hours later at our regular rate. Load was 100 miles shorter though,
Just my penny in the pond.

 

[OntarioVanMan]

Davekc said

Several cheerleaders complained because I wasn't with your carrier.

I too have been told to get out of the pool as they are not my carrier...but a long list of friends and basic experience tells me otherwise....I don't think any other carrier is big enough to be able to pull off the "load opportunity" except for maybe P2...BUT at least you don't have that "exclusive use" crap..which really limits an owners earning capability...especially now....The Feds would be really wise to look that issue over again...

 

[Humble2drive]

...WG/TVal seems better off....

Yes, WG/TVal is our saving grace. It is only when the WG lock comes off that the opportunities start getting crazy.

 

[fastrod]

I just read another post on here that stated that expediting is a niche that involves moving time sensitive freight at a premium price to the shipper. Now I read here that the rates being paid to the O/O are really low. This leads me to believe that Fedex has found a system that greatly increases there bottom line by charging premium prices to the shipper and paying low rates to the O/O. And why would Fedex want to change the exclusive use format, that is a big reason why they can make a system like this work.

 

[OntarioVanMan]

I just read another post on here that stated that expediting is a niche that involves moving time sensitive freight at a premium price to the shipper. Now I read here that the rates being paid to the O/O are really low. This leads me to believe that Fedex has found a system that greatly increases there bottom line by charging premium prices to the shipper and paying low rates to the O/O. And why would Fedex want to change the exclusive use format, that is a big reason why they can make a system like this work.

Yup..you are right..if the Feds let thier O/O's off the hook of "exclusive use" they could not play the "Opportunity" game. As the fishin hole would be reduced.

 

[Moot]

I'm confused by Fastrod and OVM's use of the term "exclusive use". Are you talking one customer's freight and only one customer's freight on one truck?

If a carrier is selling expedite as exclusive use of a truck and is charging exclusive use in their tariffs but puts other freight onboard then they are being naughty and could be in serious trouble.

 

[OntarioVanMan]

I'm confused by Fastrod and OVM's use of the term "exclusive use". Are you talking one customer's freight and only one customer's freight on one truck?

If a carrier is selling expedite as exclusive use of a truck and is charging exclusive use in their tariffs but puts other freight onboard then they are being naughty and could be in serious trouble.

I suppose there could be 2 meanings to "exclusive use"

1. One load, one truck only..no doubling up.

2. They do not allow you to find your own loads.

The Feds its 1 and 2.

 

[fastrod]

What exclusive use means here is that Fedex has complete control over what goes in your truck. Panther will let you book your own loads for a 15% fee, but Fedex does not let you do this. They claim you can at Fedex but from what I have read on here there are so many restrictions to it that it is almost impossible to do.

 

[OntarioVanMan]

Control. domination, power...all words that stick

Like peanut butter and jelly....

 

[transporter]

fedx exclusive use policy means only one customer's freight in truck at a time.

 

[pjjjjj]

I'm confused by Fastrod and OVM's use of the term "exclusive use".

What can I say? OVM is at least part Canuck! As far as I know, all expediting carriers charging expediting prices expect exclusive use of the truck for the freight. I think he was more referring to exclusive use of the leased-on owner/operator and his equipment.. how could we shorten that?

How many carriers out there are realistically allowing their OOs to book their own freight under the carrier's authorities/risk, aside from Panther?

And when they do, what are the implications if the OO contracts with a non-payer? And does the OO wait the 2 months or so that it takes to get paid by the broker-of-the-load, or does the carrier pay the OO up front?

If instructions are wrong and the OO does some serious dh to find out the load won't fit on his truck, or if the OO ends up having to wait for hours to be loaded/unloaded.. how does all this work when there are multiple players involved?

If the OO really wants the load he booked, but it's overweight for his truck when he arrives.. or if the load doesn't give quiiiiiiite enough time to get there safely so the OO steps on the fuel pedal a little harder.. either of which could result in an infraction.. it goes on the carrier's safety record.

If an OO books his own load and ends up taking way more time than anticipated, and he's therefore unavailable to the carrier he's leased on to, it's no wonder that would be a concern.

Not so strange to me that many/most carriers aren't willing to bother even entertaining the possibility of taking on all that lack of control.

It's not so simple as seeing a 'perfect load' on a public load board (such as getloaded or whatever), and making a call to book it.

For the 15% pittance that Panther charges, like I mentioned elsewhere, it seems Panther is the place to be for OOs who want to dabble in being their own dispatcher, without jumping through the other hoops involved in being their own carrier.
(Keyword = seems, as I'm not familiar with how it exactly works over at Panther, it may only *seem* to be a good deal, but maybe it's not so much)

In these times of slower freight, reduced prices, and still way too many trucks signed on, I would guess that being allowed the opportunity to book some of your own freight if you wished to, would at least give some sense of control over your own destiny. Might not necessarily result in a better bottom line, but at least some might feel better.

 

[OntarioVanMan]

Pjjjj....Express-1 lets us book our own loads for the same 15% charge....

 

[pjjjjj]

Pjjjj....Express-1 lets us book our own loads for the same 15% charge....

Ok, so Panther AND Express1 seem to be the places to be for OOs who want to dabble in being their own dispatcher!

One question tho.... if you're an E1 OO and you book your own load, and you negotiate the price with the broker-of-the-load, and it's a good paying load... you actually end up being paid more per mile than you would taking an E1 load at your contracted per-mile-rate?

 

[Tennesseahawk]

OVM... I heard they charged that magical 36%, or whatever it is they take out of accessorials. Sure it's only 15%?

 

[layoutshooter]

We almost always turn down the really cheap stuff that comes out via the "Load Oppertunities". They are often Van rate loads. We have never taken one of those. We have recieved several re-offers on loads we turned down, always at a higher rate. Some were high enough to take, if not, we turn them down. We always put down a comment in that section that the rate is too low, or something like, we don't do charity work. All we have to do is all of us turn down the junk rate loads, it is still up to us. Layoutshooter

 

[OntarioVanMan]

Hawk..straight 15% on loads...accessorials 36$ D-Time and hand unload

I should add..you don't get paid till they get paid...no advances.

Pjjj..yeah...so E-1 still gets 15% of the better rate of something they would have gotten 0 %....

 

[Roadpig]

I work for TS and they also let me broker my own freight when I can find it, if it is out of their normal truck lanes. They normally take 15% but there have been times that they have taken 0% to get me out of an especially bad area. I guess this benefits them as well because then they don't have to pay me miles to relocate to a better area.

There is a misconception by many of us drivers (and the well meaning but wrong OOIDA) about how "saying no to cheap freight" works in the current economy.

1.The carriers are bidding low because there is so much competition out there for what freight is left. Customer A knows that if they only want to pay X for a load that the chances are good that somebody is going to be willing to haul for that amount. They are also aware of our desperation as we struggle with this lack of production the country has found itself in.

2. The drivers who ARE saying no are only prolonging the amount of time they are sitting and, in turn, hurting their carrier. Just because the carrier has to turn the load back to the customer doesn't mean the customer is going to have the epiphany of "we really need these drivers, let's go ahead and pay them more". No, instead they just move on to the next carrier who is willing to haul for X amount. No loss to the customer, but a loss of freight for the driver and it damages the carrier's reputation.

That is why it is unfair to blame Panther, E1, FECC, TS, et al for the low rates and refusing to haul the freight because you feel the CARRIER is at fault. They are doing their best to find freight, but it is a customer's market right now.

I wish somebody at the OOIDA would wise up and mention this in a newsletter or something so that their more adamant followers will have a better chance at running. Instead they are conveying a Karl Marx message of "laying down on the machines" when the people being effected by that most negatively is us.

 

[Humble2drive]

. . . I don't believe every carrier will follow that path. .

Maybe not, but if you owned an expediting company and you could install software that would allow you to:

1) Dispatch loads within several minutes.
2) Dispatch loads at the rate you set.
3) Eliminate the drivers ability to negotiate.
4) Free up dispatchers to focus on other tasks.

It kinda seems like a no-brainer from a business aspect.

. In our personal situation, if the load offer is something we don't like, we can broker own without any penalty..

Sounds like a wonderful tool to have in order to reposition a truck to a better freight area. Don't know why that would keep your carrier from implementing an efficient system similar to the LO system.

. I don't believe I could operate in the environment you describe and remain profitable...

And I thought I was being dramatic. Of course you could. There are many o/o s with much less experience than you making very nice profits over the long term at the Fed.
The LO system is making things a challenge during this time of slow freight but I didn't mean to signal that the o/o s world is coming to an end.

In my mind, the Fed is still the best place to be until I am convinced otherwise. (repeat "in my mind")