Might Sequestration be a Boon for Expediters? If So, What Will You Charge?

[ATeam]

Sequestration (automatic federal government budget cuts) is scheduled to take effect March 1. Congress may kick the can further down the road to avoid the cuts, but, according to some commentators, it may not and the cuts may actually happen.

One agency that would be affected is the FAA, which provides air traffic control. They are saying that significant flight cancellations and delays would occur if their budget is cut.

A fair amount of freight travels by air; not only on large cargo planes but on passenger jets too. Many expediters tell stories about being escorted onto the runway to meet a plane to load hot freight onto it or off it. Well, if there are significant cancellations and delays of flights, how else would a shipper move that hot freight?

Might this be said in shipping departments nationwide? "Call an expediter, dummy! And do it quick before all the trucks are gone!"

There is no way to know if sequestration will happen on March 1, but it does, will you raise your price, and if so, by how much?

If the nation's gloom becomes your boon, how ready, willing and able are you to double, triple or quadruple your price?

 

[paullud]

I think it will cause the higher Spring rates to be postponed because there are to many people that will not understand how to use the situation to their advantage.

 

[Rocketman]

Fact is, we don't know that there will be a decrease in air traffic. Of course they say that there will be....but will there be? If there is, you are correct, it "might" improve the expedite market. I think it would be short lived though. If there is a "boon" there will be plenty of people with plenty of solutions to capitalize on it.

I hope you are correct with this prediction :thumbup:

 

[Slo-Ride]

Air freight pays very well now, (or should if you catch wind of it before ya aceppt load offer.)
I dont understand how a O/O under contract with a carrier can raise his/her rates? Hold out for more, and risk losing the load offer. Maybe.

Someone finding their own freight or the carriers may raise their rates, but that doesnt mean it will get passed on to the trucks.
So far with any air freight I have hauled I would have traveled back on my own dime to do it again (Well almost my dime). If I catch wind it is air freight and its not paying above and beyond my contracted rate I dont aceppt load offer.. Im not eating p/nut butter sandwiches while that pilot and crew climp in a taxi and go for steak and lobster. I love air freight, even when I lose a load as I did last week it still paid as good as running the load when all the pennys where counted. The carrier/dispatch seen to that. I didnt ask or say anything about money.Just sort of vented my anger after load canceled and they took care of the time.

I dont see the day to day operations of the towers/flight operations being cut...Maybe some more of the perks or hoildays get cut. But if those kind of cuts happen and it hampers flight operations then it would be consided a work stoppage and the airlines or the gov wont put up with it.. These guys in the towers took a huge hit a few years back and the jobs are still there. They will cut on paper, not in operations Im thinking.

As we all know the FAA has so much more then just flight controlers. Pleanty of places to cut Im sure. Like I said Im thinking any delays in air traffic or volumes should be consided a work stoppage.

 

[Moot]

I don't se castration as being a boon to expediters. Maybe 20 some years down the road when today's expediters don't have any offspring to replace them the rates will go up. I plan on keeping my stuff, rates be ****ed.

 

[Tennesseahawk]

I don't se castration as being a boon to expediters. Maybe 20 some years down the road when today's expediters don't have any offspring to replace them the rates will go up. I plan on keeping my stuff, rates be ****ed.

I was gonna say I hope they don't do that... I need it to reproduce.

 

[Rocketman]

Well...the title does ask "what will you charge?"

What are they worth to ya?

 

[skyraider]

Can you say sequestration 10 times really fast? now let us break that down, se quest ration I did it.........................

 

[Ragman]

I don't se castration as being a boon to expediters. Maybe 20 some years down the road when today's expediters don't have any offspring to replace them the rates will go up. I plan on keeping my stuff, rates be ****ed.

 

[ATeam]

I dont understand how a O/O under contract with a carrier can raise his/her rates? Hold out for more, and risk losing the load offer. Maybe.

Speaking for myself only, that's exactly how it's done.

Example: Once late on a Friday afternoon Diane and I were laid over in San Antonio, not a good freight area. It looked like we'd be there for the weekend for sure. Then an agent calls wanting a bid on a reefer load. Different agents serve different customers at Landstar and after you have been with them for a while and gotten to know some of them, you develop a sense of how to play the game.

I realized this was a new customer to this agent. Because this customer was reaching out to a new source for a reefer truck at that time of day and week, I knew the customer was desperate (or at least I thought I knew). Do I bid low to be sure to get the load and get running over the weekend, or do I bid high to capitalize on the opportunity that is presenting itself but also risk losing it.

I bid high, shocking the agent with my price. He does not usually do reefer freight and we often decline load offers from this agent because his customers like to ship cheap. "OK", he said with some apprehension. "I'll run it by the customer." The customer said yes and we were rolling a few minutes later.

That was a gutsy gamble that Friday but it would be much easier to do if a flight shortage developed. It would not be one customer looking for expedited surface transportation, it would be many. You might lose the first one or two that call but if you saw that more would call after that, bidding high is the way to go.

Some may say, "Oh but what about customer service? What about helping your carrier develop good customer relationships so you can get more loads later?"

To that I say, poppycock.

Never forget how eager and willing these same shippers were willing to ship at rock-bottom rates when they could during the recession. Not one of them, not a single one, said, "We know you will do the run for $1.50 a mile but we want to throw in an extra $0.25 to help you through these difficult times." Or if any of them did say such a thing, they said it to a carrier that did not pass the help along.

If there is customer out there who is willing to develop a mutually-beneficial, long term relationship with us, they would receive from us from a response in kind. But they must show good faith up front.

We have that very relationship with a couple of Landstar agents now. I'm thinking of one in particular who has put many thousands of dollars of business on our truck, long loads at very lucrative per-mile rates.

Once, she called with an offer that stunk. I don't remember the details but it stunk. And I told her so, and also told her that she has put a lot of good freight on our truck in the past, so, for that reason, we would be pleased to help her this time. "Oh, you don't have to do that," she said. "If you don't want the load, just say no." I'll get it covered."

That was amazing and Diane and I stand ready to help that agent anytime. But for most others, the highest price the market will bear is the price we seek to charge.

 

[BobWolf]

We will make awesome money if the shut down takes place but remember, a U schit guy will move it for gas money a van at less than .50 a mile at the most, The FMCSA will have to shut them and most of thier drivers down before we will make money.

Yes a small increase will be in order especialy to N.Y.C. and major cities.
Bob Wolf.

 

[paullud]

We will make awesome money if the shut down takes place but remember, a U schit guy will move it for gas money a van at less than .50 a mile at the most, The FMCSA will have to shut them and most of thier drivers down before we will make money.

Yes a small increase will be in order especialy to N.Y.C. and major cities.
Bob Wolf.

Couldn't agree more, I think there would be a very small window of opportunity to make some money and then the idiots will screw it up.

 

[Tennesseahawk]

Couldn't agree more, I think there would be a very small window of opportunity to make some money and then the idiots will screw it up.

Don't the idiots always screw something up? That's why they're idiots.

 

[ATeam]

We will make awesome money if the shut down takes place but remember, a U schit guy will move it for gas money a van at less than .50 a mile at the most, The FMCSA will have to shut them and most of thier drivers down before we will make money.

I might be wrong but do not see air-freight shippers listing their loads on cut rate boards and with unproven brokers, at least not unless they have no other options. They pay a healthy sum to ship their important freight by air. I don't think they would be inclined to entrust their freight to riff-raff operators.

 

[zorry]

We put a load on a little Falcon cargo jet that was scheduled to make the 1800 mile flight in 3.5 hrs, if I heard right.
There was no way ground transport would ever be considered for that shipment.

 

[ATeam]

We put a load on a little Falcon cargo jet that was scheduled to make the 1800 mile flight in 3.5 hrs, if I heard right.
There was no way ground transport would ever be considered for that shipment.

Actually, that's the point of my post. There may very well be a way that shipment would be considered for ground transport. Now, we have no idea how sequestration will actually play out. It does seem at this point that it will happen come March 1.

Speaking hypothetically, and in view of what LaHood said about the FAA and air traffic control, it is conceivable that some of the smaller airports will be closed and smaller cargo flights be canceled. If there is no Falcon that can fly because higher priority flights got the air space, it is very conceivable that the freight would go on a truck. It will arrive later but it will arrive.

We don't have to speculate much longer. March 1 is less than a week away.

 

[Moot]

Now, we have no idea how sequestration will actually play out. It does seem at this point that it will happen come March 1.

Dateline: 03-01-13, Washington, DC.
America Held Hostage:
Transportation Secretary Ray LaHood said cuts to the FAA and air traffic control could conceivable lead to smaller airports being closed and smaller cargo flights being canceled. He also stated that the sequestration would lead to delays for air travelers (and presumably air freight) because of the cutbacks in the air traffic control system. Oooh, scary potatoes!


Dateline: 03-01-13, Washington, DC.
America Held Hostage:
Secretary of Homeland Security Janet Napolitano stated that wait times (presumably for passengers and freight) to clear customs will increase by 50%. Oooh, more scary potatoes!

Dateline: 02-24-13, Common Sense USA
America Held Hostage:
Another bureaucratic classic: My department is much too important to undergo budget cuts. Woe to you, the country and the rest of the world if you cut my department's budget.

How about cutting the department of Internal Revenue Service's budget?

Dateline: 03-01-13, Washington, DC.
America Held Hostage:
Acting Commissioner of the Internal Revenue Service, Steven T. Miller announced today that due to sequestration, smaller tax brackets will be eliminated, past due tax obligations will be forgiven and checks to the IRS for tax year 2012 will take 50% longer to process. Oooh, I be likin' them potatoes!

 

[skyraider]

u all call me if there is a freight boom , I will get me a Sprinter................

lets get that stuff boys.....

 

[Rocketman]

I really hope that nobody's freight "booms", but if it does.... you can have it

 

[ATeam]

I spoke with a Landstar agent today whose main business is air freight. His view -- one view among all others -- is that the FAA would close down feeder airports to keep the big ones open. He saw no dramatic difference developing in air freight if sequester occurs. That was an opinion he offered up. He had no insider information or facts to back it up other than his sense of the business developed over many years.