CharlesD
Expert Expediter
and backhaul. All things that a lot of naive people believe in but that actually don't exist. When you tell a child that Santa isn't real, you are explaining how things work in the real world, and that's what this post is. We're talking about the real world.
In mythical backhaul land, loads that are taking you home pay less than loads that are taking you away from home. In the real world, not everyone's home is in the same city. In fact, there are indeed people living in all of the cities in this country. There are even people who live in all of those major freight centers. Shocking, I know, but let's continue. You would probably find that there are people in all of those cities who are in the trucking industry, either driving general freight or expedite.
Yesterday I was sitting in New York City and I live in Cincinnati. I want to be home this week to get ready for Thanksgiving. I was looking for loads home. I was not looking for backhaul, because I figured out long ago that it's not worth wasting your time looking for things that don't exist. There was a load picking up in New Jersey and delivering in Hamilton, real close to my house. I got excited and submitted a very reasonable bid, $1 flat for the loaded miles. I was willing to eat the deadhead to the town in Jersey the load was picking up at. After not hearing anything for a while, I decided to call the company that was brokering the load and I was told that someone else outbid me. I wanted to know how much I got outbid by so I could know how I needed to bid on the next one I saw, and I was told that someone had bid $250 for the load. That's a 600 mile expedite for $250. Does that even meet cost?
For those who don't see the problem, maybe we need to have that little Lombardi "gentlemen, this is a football" talk. There are two types of freight that don't fill a semi trailer, LTL and expedite. LTL is cheaper because it is not time sensitive, does not require exclusive use, and is generally meant to be combined with other freight. Expedite loads, regardless of the size, pay a full rate because they often are time sensitive, do require exclusive use, and are not meant to be combined with other freight. What we had there was someone who didn't understand that very basic difference. He took an LTL rate to run an expedite. Heck, I've seen LTL that paid better than that.
And here's why. When I was told the amount of the winning bid I said, "That's an LTL rate for an expedite. Who can afford that?" He responded, "He was just trying to get home." My response to that was, "I'm trying to get home too, but I'm not about to cut the throats of my colleagues in order to do it."
There's an underlying mentality behind backhaul bidding, and it's selfishness. Here's a load going home, I want to get home, so I can bid at an LTL rate to undercut anyone else who might want expedite rates for that load because at this point all I care about is covering my fuel costs. I'm sorry, but that doesn't fly with me. Like I said earlier, every city is somebody's home. The shippers know that. The brokers know that. As long as there are expediters who are willing to take loads going home at cost or even at a loss, then we're never going to see the rates get any better. My wallet might be better off in the short term if I take that 600 mile run home for $250 rather than deadhead. That's $250 I would not have otherwise. It will cover my fuel.
But I have to take a stand somewhere. If a load is an LTL and I just want to get home, I'll take .50 a mile just to cover costs, but I absolutely refuse to run an expedite load for that rate, no matter where I'm trying to get out of or where I'm trying to get to. If we keep blurring the lines between expedite and LTL, we're only going to shoot ourselves in the foot. That $250 load might be more profitable in the short term, but in the long term it could cost us all more profit. If you are on this board and you're the one who took that load out of New Jersey yesterday, shame on you.
The bottom line is this. All miles driven cost the same to drive, no matter which way they are headed. 600 miles home is no different than 600 miles away from home. It costs you the same. Every piece of expedite freight out there is going to somebody's home. What happens if the shippers and brokers just wait it out and award everything to somebody heading home who is willing to do it for .50 a mile? Where does that leave the rest of us? It's time to leave mythical backhaul land and live in the real world where a piece of freight should pay a certain rate based on the kind of freight it is, not based on the proximity of the consignee to someone's house.
Eventually I resigned myself to deadheading home last night rather than cut someone's throat and I was pulling in somewhere to get a bite to eat before heading out. I was packing up my computer to take it with me into the restaurant and my phone rang. I have my vehicle's location posted all over the internet and someone had seen it. There was an expedite picking up in New York ASAP and delivering in Louisville on Monday. It's not much, just a small box, but I can have it for an expedite rate. I checked the GPS and I was only 10 miles from the pickup. No deadhead home. No backhaul rate home. A real expedite load at an expedite rate. Who came out better, the selfish person living in backhaul land who screwed everyone over to get his load home, or me who got a full rate to get home? It doesn't always happen, but sometimes justice is served. Selfishness is no way to do business.
In mythical backhaul land, loads that are taking you home pay less than loads that are taking you away from home. In the real world, not everyone's home is in the same city. In fact, there are indeed people living in all of the cities in this country. There are even people who live in all of those major freight centers. Shocking, I know, but let's continue. You would probably find that there are people in all of those cities who are in the trucking industry, either driving general freight or expedite.
Yesterday I was sitting in New York City and I live in Cincinnati. I want to be home this week to get ready for Thanksgiving. I was looking for loads home. I was not looking for backhaul, because I figured out long ago that it's not worth wasting your time looking for things that don't exist. There was a load picking up in New Jersey and delivering in Hamilton, real close to my house. I got excited and submitted a very reasonable bid, $1 flat for the loaded miles. I was willing to eat the deadhead to the town in Jersey the load was picking up at. After not hearing anything for a while, I decided to call the company that was brokering the load and I was told that someone else outbid me. I wanted to know how much I got outbid by so I could know how I needed to bid on the next one I saw, and I was told that someone had bid $250 for the load. That's a 600 mile expedite for $250. Does that even meet cost?
For those who don't see the problem, maybe we need to have that little Lombardi "gentlemen, this is a football" talk. There are two types of freight that don't fill a semi trailer, LTL and expedite. LTL is cheaper because it is not time sensitive, does not require exclusive use, and is generally meant to be combined with other freight. Expedite loads, regardless of the size, pay a full rate because they often are time sensitive, do require exclusive use, and are not meant to be combined with other freight. What we had there was someone who didn't understand that very basic difference. He took an LTL rate to run an expedite. Heck, I've seen LTL that paid better than that.
And here's why. When I was told the amount of the winning bid I said, "That's an LTL rate for an expedite. Who can afford that?" He responded, "He was just trying to get home." My response to that was, "I'm trying to get home too, but I'm not about to cut the throats of my colleagues in order to do it."
There's an underlying mentality behind backhaul bidding, and it's selfishness. Here's a load going home, I want to get home, so I can bid at an LTL rate to undercut anyone else who might want expedite rates for that load because at this point all I care about is covering my fuel costs. I'm sorry, but that doesn't fly with me. Like I said earlier, every city is somebody's home. The shippers know that. The brokers know that. As long as there are expediters who are willing to take loads going home at cost or even at a loss, then we're never going to see the rates get any better. My wallet might be better off in the short term if I take that 600 mile run home for $250 rather than deadhead. That's $250 I would not have otherwise. It will cover my fuel.
But I have to take a stand somewhere. If a load is an LTL and I just want to get home, I'll take .50 a mile just to cover costs, but I absolutely refuse to run an expedite load for that rate, no matter where I'm trying to get out of or where I'm trying to get to. If we keep blurring the lines between expedite and LTL, we're only going to shoot ourselves in the foot. That $250 load might be more profitable in the short term, but in the long term it could cost us all more profit. If you are on this board and you're the one who took that load out of New Jersey yesterday, shame on you.
The bottom line is this. All miles driven cost the same to drive, no matter which way they are headed. 600 miles home is no different than 600 miles away from home. It costs you the same. Every piece of expedite freight out there is going to somebody's home. What happens if the shippers and brokers just wait it out and award everything to somebody heading home who is willing to do it for .50 a mile? Where does that leave the rest of us? It's time to leave mythical backhaul land and live in the real world where a piece of freight should pay a certain rate based on the kind of freight it is, not based on the proximity of the consignee to someone's house.
Eventually I resigned myself to deadheading home last night rather than cut someone's throat and I was pulling in somewhere to get a bite to eat before heading out. I was packing up my computer to take it with me into the restaurant and my phone rang. I have my vehicle's location posted all over the internet and someone had seen it. There was an expedite picking up in New York ASAP and delivering in Louisville on Monday. It's not much, just a small box, but I can have it for an expedite rate. I checked the GPS and I was only 10 miles from the pickup. No deadhead home. No backhaul rate home. A real expedite load at an expedite rate. Who came out better, the selfish person living in backhaul land who screwed everyone over to get his load home, or me who got a full rate to get home? It doesn't always happen, but sometimes justice is served. Selfishness is no way to do business.
