Major loss in the battle against cheap freight!!

[CharlesD]

I don't see too many people answering the specific question that a few people probably have, and that is where these loads come from that people are brokering. If you're leased to a carrier and dont' have your own authority, chances are you're probably looking at the internet load boards which are essentially truckload and LTL freight. Occasionally there is LTL that pays ok, but most of the time it is extremely cheap and is generally good for paying for your expenses on a relocation. You're not going to make a whole lot of money off LTL, but if you're using it to move from an area where there isn't any freight, it can be better than deadheading. Those loads can be a very good resource when you're trying to keep your deadheading down and offset those costs somewhat. If used to supplement the traditional expedite freight, they can be very helpful. Looking for those loads and making the phone calls can be time consuming and frustrating, so it's not for everybody.

 

[jaminjim]

Dave can probably type a response quicker on a phone than I can on a computer.

Team asked:
Was the money good enough to make it worth it to do for the money alone? Was it to keep a fleet driver from quitting because he or she could not stand sitting? Was it to relocate a truck to a better area?

Well yes to all, I normally only do it if I think it will be more profitable than waiting on a load. As we all know there is a cost for the truck whether it is loaded or not. If we were to deliver on a Monday to say Los Angles, and be 9th out it would be reasonable to assume for the company to take 2 to 3 days to get the truck loaded. If we got there Thursday night and was 3rd out I would not look for a load.

Team asked:
A one-truck owner-operator like me does not have to worry about a restless fleet driver. What may be invaluable to you could be meaningless to me.

I really can't say what is important for other people, but my thinking is that if you want to maximize your profits while out on the road, brokering loads for yourself can help you maximize your opportunities. I'm not saying that I booked $4.00 a mile freight, by the same token I never moved the truck with a load for less than $1.00 per mile, just to placate a team. It' just business, if it did not make a profit it was not done.

Team asked:
Can you provide some context for the numbers you provided above? The two or three brokered loads a week you mentioned, how many trucks were in the fleet and how many runs a week did the carrier provide?

I only run 8 trucks, so it's very easy for me to do, after all my only job is to run a small fleet of trucks, when things are going well and I have little to do, I call Logistics companies, Shippers, brokers and shoot the breeze. Some would call that networking/relationship building. I spend time e-mailing people at our Carrier (helps a lot) Bottom line is I want the people to feel bad that they don't have a load to put on one of my trucks. (you know momma needs shoes, kids need new dress, son hurt his head playing football cause I couldn't afford a helmet. the list goes on depending on who I'm begging for freight.)

Can't really say a percentage because times change, sometimes none for the week, but as freight dries up I use that tool more often.

 

[cheri1122]

Spot on, Pjjjjj! In a nutshell, it's just one more tool that comes in handy when needed.

 

[Texpress]

This is a good thread. I was afraid the "Advice Please" thread might be the norm. This thread has some good info for someone looking for a carrier or even some new guy who was thinking about just getting their authority and trying to make it off the boards, hypothetically speaking of course

Thanks,
Dave

PS:Be patient with me when I go off on Fedex. My therapist says I'm doing much better.

 

[Humble2drive]

While we are FedEx Custom Critical contractors and operate under the same new dispatch system Humble2drive does, we are profitable. The difference is not in the system itself, but in how we view the system. Perceptions determine your choices and your choices determine your profitability. .

Our truck shows a profit as well. This is because we listened to you and other EO members and obtained all the credentials and equipment necessary to have access to the higher dollar freight.

Isn't the real "difference" the fact that you have all of the premium paying freight available to you and much less competition in an express center because of the credentials and the equipment that you possess?

We are often immune to what the surface expedite trucks are going through. While they are sitting waiting to move up the board a "VIP" shipper calls in and makes a request for a WG team, temp assured, DDPS, SMS run. We take it and go.

It is no wonder that you have little interest in brokering your own freight. Your well researched and thought out decisions in the beginning have positioned you to be in the drivers seat (no pun intended).

I really directed this post at the average surface expedite truck. The working Joe who did not have a pile of money saved and bought a basic expediting truck without all the bells and whistles. The ability to negotiate a better rate was a helpful tool for them and for us. That has been virtually eliminated or significantly reduced at best.

When making load acceptance decisions under the new dispatch system, we do it exactly the same as we did under the old..

Wow, that is very surprising to hear. Almost unbelievable.

Under the old system, a load offer was sent to you and only you. You had 10 minutes to make your evaluation. During this 10 minutes you were free to call dispatch and request more money if needed to make your profit goal. Because dispatch would be faced with having to take another 10 minutes and make the offer to the next driver, they seriously considered your offer. They checked how much more money was available in the load and worked with you to reach an amount where both parties could win.

Did you never negotiate? Do you really do it "exactly" like you did under the old system??

At present, and as has been the case for the last 5.5 years, our own best interests are best served by contracting with FedEx Custom Critical. That has been true in good times and bad. It has been true under the old dispatch system and new. .

With you all the way on that one and appreciate all the articles and posts that have helped us shorten the learning curve by leaps and bounds!!

We dream of someday simplifying our lives, buying a surface expedite truck and travelling the country with a dog a la Team Caffee style. I just hope it will be possible. For now, we will keep doing what we are doing and wait for that inevitable shake out that you are forcasting.

 

[Doggie Daddy]

of course WG/TVal are still doing pretty well.....just try being a surface truck for a month.....then ya might be dancing to a different tune...*LOL*

Still doin' just fine here in my lil' ol' surface truck Ken.

 

[davekc]

Ok....now I am somewhere I can answer this. Great comments from both PJJJJJJJ(how many J's again?) and JaminJim. Jim of course has seen how I operate up close and personal, and PJJJJ whom I have talked to and corresponded with.
After numerous posts on the subject, I am somewhat surprised that Phil asked the questions on this that he does.
But nonetheless, I will address a couple of things that some probably thought of but not mentioned in full.

Is there a grand secret to finding freight outside the carrier.
No.
Many do it everyday. Kinda like real estate sales. Some sell small houses and some sell large buildings. Just different ways of approaching the same things.

Why do I do this rather than run under my own authority. We have done both, and if I had just a couple of trucks, that likely would be my preference of my own authority. Since I have more than 2 trucks, the RIGHT carrier in the picture makes more sense.
Why?
All of the above listed reasons in the other posts, plus a major reduction in load insurance,in house DOT audit and drug compliance, fuel tax computation, instant pay with no collections, satellite tracking, and unobtainable loads if completely independent. I am referring to DOD, specialty loads that require a high bond or additional insurance.
As far as credentials, they have little value unless that freight is available. Apparently sometimes not or I wouldn't see TVAL conventions in different parts of the country.

Brokering can come from a variety of sources. I use 3PL's most of the time, but still will grab a occasional broker board load.
Some that are leased, have a exclusive use contract with their carrier. We don't.
If I find two expedites from two different sources, I would throw them on the same truck. Many carriers do this now. Not exactly a secret. Call it double dipping or whatever. That truck will run at or higher than any specialty truck would run at without the investment.
Additionally, most companies only look at the basic capabilities of a vehicle. If it is a 22 footer for example, that is all they will load. In many cases, much much less.
In some cases, I have seen a carrier have a truck they will call a "C" unit and limit it to 5k when the truck could carry 20k.
What a total waste.
They don't "assume" or factor in that I can use the 22 footer and put a 30 foot load in it. Have to know the drivers capabilities and then you can deck the remaining 8 feet and get a tractor rate.
As already mentioned, there is a whole list of reasons as to why this is very advantageous.
I also wouldn't recommend this for someone new. It is somewhat of a skill to develop. A large portion is the art of negotiating, and that isn't something that is read and then applied the next day. Takes a little time, but anyone can do it with some effort as many right here on EO have shown.
Remember, there are only 30 days in a month. Waiting days and days on magical load, isn't the best way to get a return on your dollar with what I see as "today's" rates.
I don't look at it as to whether I am making just money, I look at it as to whether we are capitalizing on ALL of the profitable opportunities.
Almost looks like a essay

 

[ATeam]

Did you never negotiate? Do you really do it "exactly" like you did under the old system??

We negotiated under the old dispatch system and new, and in "exactly" the same way.

If a load is offered to us at a price below which we are willing to run, we immediately decline the load so dispatch will know we are serious about refusing the low price. The immediate decline also frees dispatch up to look at other trucks and cover the load more quickly if they can.

After declining the load, and if we want the load, we send in a counter-offer via Qualcomm, saying what our price per mile is and what the total woiuld be for the load in question.

Then we wait for a reply. Sometimes we hear nothing at all as the load was dispatched and the dispatcher does not bother to reply. That's fine. No reply is a reply that tells us our counter-offer was not accepted. Other times we receive a reply telling us the load is covered by someone else. Still other times, the reply is the acceptance of our counter-offer, which usually comes in the form of the load opportunity resent with our price in the offer.

Under the old system, our actions were the same. What changed in the new system is the way dispatchers deal with and respond to a counter-offer.

It happened just this morning. An offer (load opportunity) came in via Qualcomm. The load ran coast-to-coast but the pay was too low. We declined the load and then sent a free-form message: "Will do run #12345678 for $X.XX per mile, all miles. Total: $X,XXX.XX."

Reply: "The load is covered."

Under the old system, the offer/counter-offer often happened by telephone but the process was the same. We know our price. By phone or Qualcomm, the same thing happens. We decline a low-priced load and, if we want the load, make a counter-offer. Sometimes we get the load at our price, sometimes we don't. Today, we don't.

Diane just remined me of this so let me add that in the rare times when dispatch replies to our counter-offer by splitting the difference, we decline the load. We are not negotiating to play games or spend time quibbling in hopes of getting a better result. If our carrier wants to put freight on our truck, they must meet our price.

Dispatchers are busy people and we are not playing games. When we state a price, it is take-it-or-leave-it. That respects both the dispatcher's time and our profit margin.

Let me also add that this negotiation technique has worked well the whole time we have been in the business. But I cannot say it will continue to work as the the recession progresses and grows deeper. We are making money now but a few months from now, who knows what will work and what won't?

Thus my interest in things we have not done before, like self-brokered freight.

 

[Doggie Daddy]

I get William Shatner to do all of my negotiations with dispatch.

 

[ATeam]

Is there a grand secret to finding freight outside the carrier.
No.
Many do it everyday. Kinda like real estate sales. Some sell small houses and some sell large buildings. Just different ways of approaching the same things.

Thank you for your informative reply, and especially for acknowledging that there is more than one way to approach the business.

 

[davekc]

No problem. There are a lot of ways to do this business as we see right here on EO. Since I don't drive, I only look for the best return and the best ways to capture those opportunities.
From that, I benefit as well as the many folks with whom we work with.

 

[aileron]

For me, I do the same thing I have done under the old (non opportunity) and new (load opportunity) system. If the load doesn't pay my profitable rate I turn it down. The difference now is that I rarely, very rarely I get the opportunity to negotiate any more since almost all the time someone will do the run for the bone that FedEx is throwing.
Now, even worse, since we went to a flat rate for B units, it is even less to negotiate.
The other day I got a load opportunity of about 200 miles picking up in Atlanta, going to some place in TN. (It looks like about 80% of the loads that are offered to me in Atlanta are of the same mileage). Of course I turn it down, It just doesn't make sense to do this and end up in a dead area and then need to DH back to Atlanta on my dime and end up 6th in line. I guess nobody else wanted this load so I get a call from dispatch. This time a live person on the other end, a person that I will not name here, but a nice person that I have dealt with for a long time. She says if I can help her with this load, I think she threw in a 'honey' also somewhere in there. I politely said no thanks, no more helping out anybody. She knew that I helped her many a times with loads in the past that nobody would do, but no more, since FedEx never, and I repeat, NEVER helped me out with anything when I needed it.

 

[davekc]

I think there in lies the difference.
Someone else is controlling the opportunities rather than yourself.

 

[TeamCaffee]

I know we are one of the people DaveKC refers to as a FedEx Custom Critical Cheerleader and I still support our company. Just as DaveKC is a cheerleader for his company as well as OVM is for his company. Our company is still providing us with enough loads to make a good living and we like working within the structure of FedEx Custom Critical. To us one of our strong points is we are exclusive use and this is a question we are often asked by our customers. They are paying the higher rate to make sure their freight is not being touched or moved till off loaded.
We are seeing a lot more load opportunities that we would never have seen when FCC just used load offers. To our way of thinking the loads opps are great for FCC as they can quickly tell the customer we can cover their load so in turn that helps the fleet as we lose less loads to the competition. One of the ways we like seeing more load opportunities is if we are sitting in a bad area we have a much better chance at getting out or we at least can see freight is moving. That is a two sided coin though we also see loads that do not pay well to begin with and then have excessive dead head on them. The load opportunity system still drives us nuts in many ways and one is dealing with the load opp going out to trucks in multiple express centers. This has always been the way loads have been dispatched but now we can see this happening and it is difficult to know which express centers you are competing with. As an express truck we have always felt that where we position ourselves is very important but now are rethinking some of that.
There is so much competition right now in this market we feel we need to really whittle away at what our pay per mile has to be. We have found we are much more careful when we are offered a load to look at where the pickup is and where the delivery will be. We can run much cheaper in the center of the country then we can in the north east. If we are not sure of where a city is located we map the pickup city and the delivery city and double check to see if we are going to run a lot of toll roads or even a lot of back roads. Both eat away at our bottom line. To us it is impossible to have a set PPM as we look at each load individually. One of the great things is that we can turn down one load or many loads and we are not penalized and are still first to get the next load opp.
The comment that any carrier does not care when they lose a truck is way off mark. Losing an experienced truck is a harsh blow to a company. The average cost to put on a new truck is around $3000.00 by the time they go through orientation and start become productive. We also fell for the talk of how many trucks were in orientation each week till we looked at the fleet size. It appears to us that our company is basically recruiting to maintain the fleet size not increase the fleet size. We also then hear the question why are they recruiting so many trucks when there are not enough loads and then the next complaint is usually can you believe they offered me a load with so much dead head on it. Well the loads need to get covered and with fewer trucks there will be more dead head. The customer is not going to pay more to dead head a truck is they will find a company with a truck that is closer as they are also trying to figure out cheaper ways to survive.
Our carrier has cut back on expenses and has cut back on the work force. Familiar voices no longer answer the phones when we call in and one person has often taken on more responsibilities. We are also cutting back on our expenses to stay profitable. The idea that the company should be more caring that we can no longer pay our bills seems odd. Each of us has our own liabilities and my cheap freight is not the same as say a T-Val trucks cheap freight. We signed a lease saying we would run for a percentage of what a customer is being charged we did not sign a contract saying we would negotiate each and every load. When a load is offered that we cannot afford to run we refuse and we put the amount we can run the load for. With the new load opps we often do not get the load and a truck that can run for that pay per mile will get the load. I do not begrudge that truck for being able to run cheaper then we can. We have found that we can run much cheaper than a fleet truck and much cheaper than a truck being run by two different households. That is just the nature of this game.
This is a great time of year to review your all miles you ran last year and your income. We are looking at ways we can cut back on our expenses for this upcoming year. The really high paying loads seem to be further and further apart.

 

[ATeam]

TeamCaffee's point about fleet coverage raises an interesting question regarding the ability to broker outside loads.

A carrier that allows its trucks to broker outside loads will, at any given moment, have a number of trucks on outside loads, and thus unavailable to cover carrier-dispatched loads.

If a carrier must maintain a certain number of trucks to maintain availability to its customer base, the logical thing to do is to increase the fleet by the number of trucks that are typically preoccupied on outside freight. This enables the carrier to cover its customer base while profiting from the 15% it charges its contractors to do their outside-freight thing.

In other words, does allowing its contractors to broker outside freight mean that a carrier will maintain a larger fleet of trucks than it otherwise would?

 

[OntarioVanMan]

Dave and I...In pom poms..what an image...*LOL*

I can't see it....raising the fleet to cover whom maybe running brokered loads....it maybe an excuse to raise the fleet numbers...Judging from the good members on here very few broker their own....

 

[davekc]

TeamCaffee's point about fleet coverage raises an interesting question regarding the ability to broker outside loads.

A carrier that allows its trucks to broker outside loads will, at any given moment, have a number of trucks on outside loads, and thus unavailable to cover carrier-dispatched loads.

If a carrier must maintain a certain number of trucks to maintain availability to its customer base, the logical thing to do is to increase the fleet by the number of trucks that are typically preoccupied on outside freight. This enables the carrier to cover its customer base while profiting from the 15% it charges its contractors to do their outside-freight thing.

In other words, does allowing its contractors to broker outside freight mean that a carrier will maintain a larger fleet of trucks than it otherwise would?

Actually it has the oppisite effect.
Why?
Because trucks going to slower areas, outbound much faster back to the more productive areas. See that a little more now where a carrier gets unbalanced. Tons of loads to the south, and then they sit for days. Using this tool effectively, that truck is back up north in a much shorter period of time, thus needing less trucks to cover the same amount of freight.

BTW OVM.....that pom-pom image is frightening

 

[piper1]

BTW OVM.....that pom-pom image is frightening

"Gimme a U...G....L............."

 

[Humble2drive]

Thanks for all the great posts! They have been very helpful and informative.

Once in a while, a leading and innovative company like FECC will come up with a change to the system which will better serve the customer while at the same time streamline and improve internal operations and profitability.

It may not always be in the very best interest of the driver so we tend to get our feathers ruffled a bit and complain to each other. I personally feel it is helpful to have a civil debate on a public forum where all opinions can be expressed. That way we can take the good advice that comes out of it and decide on a strategy to move on.

Bottom line. If it actually improves customer service, enhances the Fed Ex brand and creates an increase in business, we will come out ahead when the smoke clears.

P.S.- I have bookmarked all posts regarding booking outside freight. That could be a major factor in any future decisions because we always keep a plan B on file.

 

[OntarioVanMan]

oh stop beating the drum...when they stop offering C's and D's loads at 78 cents all miles I might believe all the hype....till then they are just another dog and pony show...like the rest..