whats the answer

riverrat2000

Seasoned Expediter
I thought I would throw this out and see what everyone thinks, As we all know expediting is changing and from what I have seen if ain't for the O/o's benefit, It seems like a race to the bottom on freight rates they are the same or even less than they were eight years ago. Expenses in that time have at least tripled ect,ect,ect. I think the biggest change is that there is no customer loyalty with their agents anymore, they all throw their load onto the Internet and cheapest bid wins,so here's a thought, why do companies even have agents anymore, what do they do for the cut that they take? they don't hit the bricks looking for customers anymore,they just sit in an office bidding against each other, so why don't the expediting companies just hire a few people off the welfare rolls take an hour or two to teach them how to bid the loads and cut the booking agents out of the loop, and then pass the savings on to the people doing the major portion of the work "us", our rates would then rise to something close to what they should be, the system would run much more efficiently and all but the out of work booking agents would be a lot happier. The truth about the Internet "in my opinion" is that it is destroying this business. Ok so much for my musings anyone else got any thoughts on the subject???
 

terryandrene

Veteran Expediter
Safety & Compliance
US Coast Guard
Any savings the carrier can realize by reducing the size of its workforce or the compensation to its workforce will undoubtedly be retained by the carrier. Not until such time as there is a critical shortage of owner/operators willing to lease on at the current rates will they consider an imminent need to increase O/O compensation package. The same is generally true for fleet owner compensation to their hired drivers.
 

Tennesseahawk

Veteran Expediter
Sounds like you have a good idea of what's going on. The internet has made it easier to get into the biz, so of course there are more companies involved in the equation. Add to it companies that have no problem passing on cheap freight to their contractors. Add to that the fact that a number of loads go thru 3 or more brokers before it gets to the truck... each broker taking their share.

What I see is the internet being both good and bad for the industry. It gives access to loads the companies wouldn't otherwise have; at the same time drives the rates down as there is always someone wanting to get home (or back to civilization) "at any cost".

IMO, it's all a matter of "fine-tuning" one's strategy. Coming into the biz with a 1996 mindset will set you up for failure. As will the attitude that this is something anyone can do and be successful from the get-go. By knowing what is going on in the industry, and not just relying on a company to spoon feed you freight, will cause you to succeed where others fail. Now more than ever.

And as you said about companies not being loyal... all the more reason to be on the net. Contacts in this biz are key to running your own gig. Who you know and who knows you has become almost as important to having your truck in the right area.

-Vampire Super Slooth Trucker!!!
 

Pappy

Expert Expediter
I'll keep this simple!
It's all about the almighty dollar an to hell with the person!
I was an O/O wehe de-regulation came along. I watched loads that normally paid 700 dollars get bid on and hauled for 300 dollars. Do you think I hauled one for that? HELL NO--Let the starving to death SOB that hauled it thinking it would pay for his fuel form point A to point B have it! Sorry guys, but this business is not about paying for fuel---BUT MAKING A LIVING!

Pappy

37 year trucking veteran ;)
 

fortwayne

Not a Member
I will agree with the one statement the internet is good and bad for the industry.
Good because it gives access to customers we might never of had prior and bad because it provides an avenue for the customer/carrier/agent to reduce their cost by bidding out to a wider carrier base and in turn the driver really gets no benefit out of the deal except driving more miles at a cheaper rate.
Cheap rates will always be part of our industry, as the other post said, there is always someone who needs to get home or back to a prime area that will take a cheap load to obtain that result.
I agree with the other post that drivers and o/o will always get the short end of the stick, even though we do the majority of and the vital link of work in the chain.
As the post said and I quote "Not until such time as there is a critical shortage of owner/operators willing to lease on at the current rates will they (the carrier) consider an imminent need to increase O/O compensation package. The same is generally true for fleet owner compensation to their hired drivers."
While I agree with this statement the problem with this is that there never seems to be a real shortage of drivers or o/o as we all seem to just bounce around from carrier to carrier giving the carriers no reason to increase jack.
I have said it before, been name called, insulted, laughed at, cussed at, and much more - but it will NEVER CHANGE until we as a large group of o/o, fleet owners and drivers unite together and take a stand against these low rates. There is no reason for us to pay the ever increasing prices we face on the road and not see anything back in increases in our rates from these glorified freight brokers.
You can say that if we take a stand they will just find another driver or o/o that will work for the current rates. That may be true and let's say it is - but - if we reduce the amount of o/o and drivers that are willing to participate in the raping of our rates then it makes it more difficult in the carriers finding a resource to move their frieght.
How do we reduce the amount of o/o and drivers that would still work for these cheap rates?
In my mind, it all depends of how many of you are really sick of the cheap rates and are really willing to stand up, grap your sack and take a really really firm hard stand on this issue.
And if we want to make excuses and give all these bs reasons not to take a stand - then I would suggest it is just time to shut up and lets just go to work.


Fort Wayne
Guided By God
 

horseman

Expert Expediter
Hello everybody. I normally don't have comments that I would deem worthy of the various topics discussed. In this case however riverrat has touched a nerve that is a bane to my own personal sanity and at the same time is the most frustrating aspect for a carrier to deal with in this business.

TranStewart Trucking was formed in 1996. Since about 2002 our rates have done nothing but tumble to a level that I never dreamed possible. As riverrat indicates a big part in this is the strategy of shippers posting expedite moves on the internet to the cheapest bidder. And as sombody else mentioned, market forces play another very huge part of the equation.(over capacity of carriers, equipment and personel) Another factor is the fact that most shippers have wisned to the strategy of assigning their moves to the large logistics companies. I can tell you that over the last 4 years our rates have been forced down about 36%. I know your rates haven't dropped that much as owner/operators but as a former operator myself my heart bleeds.

Our strategy in coping with these grim set of facts is two fold; First, in order to keep our operators moving we must remain competive in the marketplace. Most of our operators will tell you that we are succesful on this count. Second, to allow us to pay competive rates and at the same time keep the company sucessful we must compensate lower margins (rates) with additional volumn. We are also winning this count as evidenced by an extremely aggressive growth rate in the last 2 years.

I also have a personal goal which is to restore owner/operator compensation to pre 2001 levels through volumn. I know this can be done by maintaining low fixed overhead without the sacrifice of service. While we are paying competitive rates today, I believe that we are close to achieving my goal and will soon be able to raise to a level that is today almost non exsistant. I must admit however that with the continuing drop in shipping rates over the last several years, it has been a long uphill road.

To summarize, I strongly believe that the recent negative forces in our industry can be dealt with sucessfully if we are willing to adapt to the uncontrollable changes. Also, please know that there are honest carriers (in addition to TranStewart) that work hard to adapt for the better of everyone.


Be Careful!!! J. Stewart - TranStewart Trucking Inc.
 

fortwayne

Not a Member
WOW - nice free ad for TranStewart. Well, anyways - restoring through volume is not the answer for the drivers or for the o/o only for the carriers.
Carriers are still taking their same cut out of the billable amount if not more than previous years. Yes, their cost have risen as well, but not to the constant everday cost of the o/o and the drivers and certainly they DO NOT HAVE THE INVESTMENT tied up that an o/o has.
Forcing o/o and drivers to drive more miles to MAINTAIN wages of the past is unreasonable and a carriers lazy way out of the situation.
Carriers should show the respect to the o/o and the drivers and take a better look at the inter-office operations to GENERATE MORE BUSINESS AT FAIR FREIGHT RATES instead of pampering their current customer base with CHEAP DISCOUNTED FREIGHT RATES.
Yes, easier said than done - but while there is an effort by most carriers to expand their customer base there appears to be little effort in WORKING HARD AND EDUCATED TO DEVELOP A BROADER CUSTOMER BASE OF FAIR PAYING CUSTOMERS.
So, while we have heard from one carrier, stating his commitment of returning to better wages through volume ---- which of course is a solid plan for his financial goals, when will we hear from a carrier committing to better wages through an increase of better paying customers. Afterall Mr Stewart more miles on my truck means more maintenance more fuel expense more tires more expenses period.......it does not result in more profit for me....but it does generate more profit for you with no heavy capital expenditures.


Fort Wayne
Guided By God
 

kwexpress

Veteran Expediter
KW Express
o/o till i die

I guess maybe you should just cut out the carrier and do it all yourself.

after all you might as well be the one on the internet finding your own loads.alot of people will say its to much work and will just make you work more hours but the hours you spend at home is one less truck on the road and trucks would be in more demand.


I can sit at home for 2 or 3 days a week finding loads to run for the next 2 or 3 days and still make a decent buck.not get rich by no means but run legal and make a better than average wage and spend my downtime at home.

untill there is a cure for greed nothing will change.
you are all just a carriers pawn.
 

davekc

Senior Moderator
Staff member
Fleet Owner
Expansion on volume can be a reward for a carrier in certain situations. With the truckload carriers, just look at JB, Schnieder, and Swift. That plan works as long as there is a pool of drivers. In their cases, the pool started to shrink and they went after foreign labor. Much the same as the ocean cruise lines have.
I see little gained from a owner operators prospective. Driving more with accelerated costs for less revenue per mile is hardly a good business climate.
Kind of a slow action casualty.
It is a current and future reality to many of the smaller carriers as the larger ones are becoming full service logistic companies.
To obtain the higher rates, it has become a necessity to provide a service beyond just the dock to dock delivery.







Davekc
owner
22 years
PantherII
EO moderator
 

riverrat2000

Seasoned Expediter
so far this has been a very interesting discussion let me throw this into the mix, I have been a member of OOIDA for a number of years and believe in the say no to cheap freight campaign and try to follow that principal but is seems like i am doing it alone why do you think this idea hasn't caught on with more O/os after all its to everyones benefit to stick together on this idea
 

fortwayne

Not a Member
The problem with the OOIDA is the small membership compared to other groups. The OOIDA in which I am a member lacks the needed power by numbers.
You are right we ALL need to take a stand on this and stop looking at just trying to make money now but looking at the long term benefit of taking a stand against cheap freight and carriers who refuse to compensate their o/o and drivers in relation with inflation.
Glad to see most of us agreeing that TranStewart's plan of increase of wages through volume WILL NOT WORK and only benefits the carrier!
Excellent! WE JUST TOOK A STAND AGAINST A CARRIER'S PLAN!

Fort Wayne
Guided By God
 

davekc

Senior Moderator
Staff member
Fleet Owner
The biggest issue is that less than 5 percent of operators are solvent enough to sustain a long controlled rate structure. The problem is a supply and demand issue. The results of that climate is what Transtewart is challenged by. OOIDA is very effective at government regulation issues, but is powerless against a driver pool that is larger than all of the current operators. Like many other industries, unless you are offering something that the others aren't, very little will change. Too many operators are running just week to week and are one repair away from financial ruin.
Customers want a one stop shop with SERVICE and COVERAGE. If a carrier fails to provide that, they will get swallowed by the ones that can.








Davekc
owner
22 years
PantherII
EO moderator
 

fortwayne

Not a Member
Transtewart and all of the others are challenged by customers wanting cheap rates and I agree with that.
However, along the way these carriers have allowed the customers to dictate to them what they can charge for their services by getting into this cheap freight bidding war.
If the carriers never would have lowered their standards and become cheap frieght brokers they would not have gotten themselves into this situation thus dragging the o/o and driver wages down with them.
If when the customer went looking for the best price and one carrier was at $2, and the next one went down to 1.80, 1.60, 1.30 and so on just to get the job the customer would still know there was a limit to how low these carriers would go.
But now, the customers know the carriers are willing to go to the bottom of the barrel for the sole purpose of just getting the order and the customer takes advantage of that. Heck, who wouldn't we can not blame the customer.
The carriers started this tragedy, we as o/o and drivers added to it and continue to add to the problem by accepting this cheap freight!
Now, the claim was made in the other post that like many other industries, unless you are offering something that the others aren't, very little will change.
No, nothing will change UNTIL we eliminate industry wide cheap freight!
It will not be the carriers that do this and it will not be the o/o and drivers that do this - but it will take a combination of the carriers, o/o and drivers working together to solve this.
As a driver unless a load puts $75-$100 in MY pocket it makes no sense on me taking it or for my owner to move the truck, Thus, this forces the carrier to look for a DIRT BAG DRIVER that will work with cheap freight and a DIRT BAG O/O that would want it.
Now, if they pass on it and the next one passes and the next one passes, and so on down the line, the carrier has to either get more money out of the customer or the customer is forced to go else where and the process has to start all over again.........and hopefully if we all work together the process will bring the same result and the customer finds out the cheap freight days are over.
This will not be a overnight solution, it will take time, but we have to start somewhere and sometime soon. So, if you are tired of working week to week and being one repair away from shutting your operation down, if your tired of making bs money - THEN START TODAY BY SAYING NO TO CHEAP FREIGHT. Or like I said before, if your not willing to stop working this cheap freight and sacrificing some today for a brighter tommorrow then just shutup and go back to work!
Fort Wayne
Guided By God
 

davekc

Senior Moderator
Staff member
Fleet Owner
No, nothing will change UNTIL we eliminate industry wide cheap freight!
It will not be the carriers that do this and it will not be the o/o and drivers that do this - but it will take a combination of the carriers, o/o and drivers working together to solve this.
As a driver unless a load puts $75-$100 in MY pocket it makes no sense on me taking it or for my owner to move the truck, Thus, this forces the carrier to look for a DIRT BAG DRIVER that will work with cheap freight and a DIRT BAG O/O that would want it.
==================================================
I think you missed my point. The problem is there is a larger pool of drivers willing to haul for these cheaper rates. There is little incentive for the carrier to change as long as that pool exists. Opening the borders to foreign competitors will certainly compound the problem for some at the bottom of the barrel. Many carriers look for these "dirt bag drivers" and they are hauling for pennies. Walk through any truckstop and some of these folks look downright pathetic. Unless you have something else to offer, the customer will of course migrate to the cheapest cost.







Davekc
owner
22 years
PantherII
EO moderator
 

fortwayne

Not a Member
I really did not miss your point. My point is we as professionals in an industry laced with scum drivers willing to drive for cheap must find a way to PUSH those scum drivers out of our industry.
Sounds rude but that is only one of the solutions - but I get your point.
Fort Wayne
Guided By God
 

simon says

Veteran Expediter
Charter Member
Hmmm- if history teaches anything, seems back in the day (2 far back for most of you to recall), those who were taking jobs on the cheap, got reminded that all need to make a decent living (if you catch my drift). I'm not advocating a nasty campaign of extra-ordinary means, but when I see a certain company utilizing 24' straight trucks with a non-DOT approved sleeper inside the box, I get real irritated. A lot of us have invested big money & effort to be professional expeditors, only to see the biz overrun with bottom of the barrel types...
As others have alluded to: a lot of solo O/O's have left altogether or have become fleet owners. No, sorry, I'm not fond of fleet owners: some of you have let the worst of the worst come out here and give us all a black eye. Some of those team folks came right out of a Swift truck, and look and act like fools, badly in need of a shower.
I have become a dinosaur, but still maintaining an existence at this point. Seems like the Canadians are the only ones who thrive with larger boxes like mine, and run solo, and work that border back and forth.
 

x06col

Veteran Expediter
Charter Member
Retired Expediter
US Army
I can assure you, the Canadians are not the only ones doing well.
 

horseman

Expert Expediter
Just a few points of clarification from TranStewart with regard to my previous post.

In the last four years, we as a company have taken an average drop in gross operating margin of more than 35%. Our owner/ operators have swallowed an average of 4.16%. These numbers are based on total averages of 2002 vs now. The key to staying alive during this transformation for our company as been increased growth and volumn. This strategy does work, is not origional and we obviously have the proof.

Contrary to some accusations in this thread we are not taking the same cut that we always have. I am also not saying that we expect drivers to drive more miles for the same revenue. That strategy has been undertaken by the carrier in order to spare the owner operator the same margin cut that we have had to endure due to over capacity in our industry at this time.

I also would like to re=emphasise that we are getting close to our goal of restoring O/O rates back to 2002 levels. I firmly believe we will achieve this soon due to the low margin/high volumn strategy.

Just one more point. I apologize if anyone believes that the purpose of my posts are to gain an advertising advantage. I assure you that is not the case. Its just that this particular subject matter evokes much frustration and emotion. I'll probably not post on this site again in order to avoid a wrong appearance.


Be carful!!! J. Stewart-TranStewart
 

x06col

Veteran Expediter
Charter Member
Retired Expediter
US Army
Jerry, Don't believe i'd worry too much about your image, I aplaud you for trying to splain the facts to folks that usually have the reply screen open before they read the post. Regardless, I'd only be looking at the ones that are thinking, wow, this guy is getting a little bang for his buck, steada the ones that think you are getting over. Ya gotta get a little fix on the beast you are dealing with.
 

louixo

Veteran Expediter
Charter Member
This is an emotionally charged issue, and always has been. I´d like to jump in with this: Truckers being the independent cusses that they are, are next to impossible to organize to do anything as a group for the greater good. There are plenty of idealists out there that want us all to hold hands and sing a couple of verses of Kumbaya, to get to their ideal of what this industry should do for the O&O´s, the company drivers, the small fleet owner etc. Depends on where your Peter Principle economic goal lies, in the great scheme of things. The reality of it is that we are in a global economy. It got global, because we let it go global. It´s the new generation, the latest business model, and curently the way of the capitlist world. We are all after a piece of the capitalist pie, and in true capitalist form we all want a larger slice, year in and year out. Add to the mix, the changing technology, the changing business climate that never stops, and all of the competitors that are in the game to win whatever they can, and you better know it´s not going to change. It hasn´t changed in 200 years, and is unlikely to change anytime soon. In competition there is always opportunity, that goes along with the change. The winners and the survivors will adapt, regroup, and compete better. The customer is alwyas right, pays the frieght in the end, and the employer will do whatever is necessary to get more biz. The survivors won´t be on the sidelines whining about whose fault it is that they are not getting their morsel of the coveted pie. Horseman, put it in perspective in my opinion, because he´s trying to find a solution, not crying in his beer about the problems. Beleive him, or don´t beleive him. That´s your choice. His company is competing at a level with it´s own specific problems. Too many look for trickle down goodies, as their right, because they happened to take a shot and become an O&O. There are no rights, for any of us. It´s time to make the decisions that get you to, or close to the goals that you set out to achieve no matter where you are in the food chain. If you don´t live up to your expectations in expediting, there are several other areas in trucking, that may be for you, if you want to work a little harder, stay out a while longer, and put the crying towel away, and make it work. All business is cyclical in nature, and expediting is no exception. Companies, and individuals enter into this business for the same reasons, which is e pluribis unum. The strong will survive, like in any industry. If you can´t play with the big dogs, stay on the porch, and go find another vocation where they do hold hands and you can do things like get face time, think out of the box, and let´s do lunch.
 
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