What is Cheap Freight, Really?

[ATeam]

I believe my post already explained how the conclusion was reached. It was reached by talking to truckers who wanted me to buy their trucks.

Allow me to add two more items to reply #37 above.

What is cheap freight, really?

11. Ateam: Cheap freight is a cop out; a reason given by some truckers that are failing in their business, that places responsibility for their failure not on their own poor business practices, but on other people that haul "cheap freight."

12. Tennesseahawk: Cheap freight is a state of mind of crossing a line where you believe the freight rate is dropping as a result.

 

[Tennesseahawk]

Then why ask us, if you've already come to a conclusion?

 

[ATeam]

To learn more and test the validity of said conclusion. Is that OK?

 

[greg334]

I would tend to think there is no conclusion, like other things in life and mysteries of the unknown.

Maybe this is groundwork for a novel?

 

[Turtle]

Yep. It's cheap freight if you wouldn't run every load, every day, for that rate.

 

[CharlesD]

So much of this depends on the vehicle and your fuel mileage. I want to make .60 or .70 cpm profit on a run. To get that profit margin in a Sprinter it isn't that hard, but for the larger trucks with higher fuel costs, you need a larger base rate to make that kind of profit. Now the NLM stuff is always going to be cheaper, but someone's always going to be running NLM loads. I don't see them going out of business anytime soon. Yes, I have been guilty of double dipping two small NLM "cargo van" loads to get a pretty good rate for my miles.

Within expediting there are rates that are cheaper than others, but what bugs me is when a shipper wants to take a load that is obviously an expedite load and run it as an LTL. There are still quite a few shippers and brokers who have worked general freight so long that they really don't have a clue what an expedited load is supposed to pay. I spoke with a shipper last week with a 1000 mile load picking up on Wednesday morning and they wanted it delivered by Thursday night. They wanted to pay $400 because it was "only a partial." I kept bringing up the time frame involved and he kept saying things like, "I'm not paying for a whole truck." That mentality is messed up, that anything not big enough to fill a 53 footer should run for .40 per mile.

 

[ATeam]

Within expediting there are rates that are cheaper than others, but what bugs me is when a shipper wants to take a load that is obviously an expedite load and run it as an LTL. There are still quite a few shippers and brokers who have worked general freight so long that they really don't have a clue what an expedited load is supposed to pay. I spoke with a shipper last week with a 1000 mile load picking up on Wednesday morning and they wanted it delivered by Thursday night. They wanted to pay $400 because it was "only a partial." I kept bringing up the time frame involved and he kept saying things like, "I'm not paying for a whole truck." That mentality is messed up, that anything not big enough to fill a 53 footer should run for .40 per mile.

That is the difference between exclusive use freight and freight that moves fast, is it not? As carriers and shippers are getting more skilled at moving LTL freight fast, exclusive use freight remains our market niche. With exclusive use fright, the shipper is indeed paying for the whole truck. That's why it is called exclusive use, and that is why our rates are higher.

 

[davekc]

The minute a load is time defined, I view and charge as a expedited load. On LTL loads, I give a projected day they will get it, but that is it.
Exclusive use in our industry is slowly shrinking as Charles posted.
That is why you see in some instances 2 NLM expedite loads go on the same truck. Not because they are exclusive, but because they are time specific shipments with expedited rates.

 

[greg334]

Dave,
Exactly, the days of the exclusive use expediter is dwindling and you see more and more LTL or what I call express LTL freight coming into the scene.

To me, and it maybe more me than anything else, this seriously blurs the line between mainstream trucking and expediting and forces us to actually stop looking at the freight as 'must get there or the company will lose money' to 'it will get there faster than a truck'. This line has been removed for many of the people like CharlesD and others, and maybe they would agree with me.

If we take a look at one example, LG freight, we can see that this is distribution style freight along the lines of LTL freight, not expedited freight. This is why my question was put in such a way to be calling it cheap regardless what others say they get. LG freight seems to be sold cheaply to the customer and should only be offered to the local CC owners and FedEx Freight but isn't.

The funny thing is I think there is no conclusion or any real answer unless there is a real examination of the industry. Again it is like other things in life and mysteries of the unknown.

 

[Jefferson3000]

I spoke with a shipper last week with a 1000 mile load picking up on Wednesday morning and they wanted it delivered by Thursday night. They wanted to pay $400 because it was "only a partial." I kept bringing up the time frame involved and he kept saying things like, "I'm not paying for a whole truck." That mentality is messed up, that anything not big enough to fill a 53 footer should run for .40 per mile.

The problem is, that that person doesn't realize that they ARE paying for a full truck (yours) if they want it tomorrow night. If they want it whenever, then they can have a "whenever rate."

By the way, most brokers have two rate systems, one for carriers and one for Owner operators (w/ their own authority). I have found that the way I present myself determines my outcome. If the shipper doesn't "get it", just move on and let it sit on their dock.....and leave them your number.

 

[nobb4u]

Let's see it cost you $.99 a mile to operate your truck and you take a load that pays $.95 if you run enough of these at this rate won't you just make up the difference in volume?

 

[TeamCaffee]

If I remember my studies right the more miles you run the less your fixed costs are per mile.

 

[CharlesD]

Let's see it cost you $.99 a mile to operate your truck and you take a load that pays $.95 if you run enough of these at this rate won't you just make up the difference in volume?

It's that new math.

 

[highway star]

When I was with Thompson we ran a lot of "corridor" freight. Detroit to Toronto. As time went on, I saw a sharp decline in loads that had a next day delivery. Other companies began specializing in next day LTL. A truck would spend the day on one end delivering and loading and take it to the other end for the next day, offering a reduced rate. It sure put the kibash on our double loads.

 

[Packmule]

Let's see it cost you $.99 a mile to operate your truck and you take a load that pays $.95 if you run enough of these at this rate won't you just make up the difference in volume?

NO!! This would only work if you bought a BIGGER truck!!

 

[iceroadtrucker]

From : ICEROADTRUCKER
SUB: Cheapo Freight
The way I see It Night Creature OR STEVE UR right on one thing the Cheapo Freight, The rest is a guessing game Turkey Hawk welcome back man finaly.
Now here is somthing to ponder U do a Load a couple of months ago and it was x amount of dollars with FS , lumper ect the works ect.
U get a load offer lets say To the same Company from and two the same Del Place and the DH is Longer but here is the Kicker. UR Company cut the Rate of the Freight and the only thing that got bigger was the Fuel surcharge but the overall price was less.
Now to me thats cheap Freight. Now if your Pulling $1.20- $1.40 all miles like some on here do then you might consider it not cheap.
By the way. My Handle In Iowa is Ridge Runner.
Im From Castana, R-Cola, Ticonic, Area The Rec Ranch Is Timber Ridge Ranch.
Im from the HawkEye State Not the Buckeye (Blackeye State) HG LOL
ICEROADTRUCKER

Ridge Runner
Just remember A Logging Tractor with a Cherry Picker will make U money if the Timber is Good.

 

[Moot]

From : ICEROADTRUCKER
Just remember A Logging Tractor with a Cherry Picker will make U money if the Timber is Good.

If U Put a Trailer behind it U should make Even more money.