Your Company Doesn't Care

[SBBExpress]

If you think the company your leased to care about your success as a business owner your sadly mistaken. They will continue to offer out cheap freight as long as someone will haul it and they don't care if you sink or swim. It's up to us in the industry to police ourselves, that means it's imperative that you know what it cost you per mile, every mile, to run and maintain your equipment AND make a living. After all, thats why we do this right? Last year it cost me .97 a mile to run my business, that excludes a capitol purchase of an APU and any personal compensation, that's stricktly business expense, ie.: truck payment, fuel, insurance, tolls, maintenance, office poducts, etc. Now, what should you get paid as a driver or team? I saw an advertisment on the back of a Heartland trailer offering .50 a mile for experienced solo company drivers... What's your time and effort worth as a expediter? My wife and I are a husband wife team, we can keep all the money in one family. I sympathize with those teams who are not related, paticularly in these times of cut throat rates, how you can survive is beyond me. If your only putting .20 a mile in your pocket after expenses it's pretty hard for two families to survive! The bottom line of this rambling is this. STOP TAKING CHEAP FREIGHT! I'm not saying not to compromise were and when you can in these trying time, but don't let your company starve you out either. THEY DON'T CARE if you make a living or not!! Know what you equipment cost to operate per mile and what you can reasonably survive on and stick to it. Expedited freight is a specialized industry. THose who use the expedited system do so for a reason and those reasons don't change just because the economy is slow. They will continue to use expedited service because they need it, for the vast majority of our customers it is not a luxury it's a necessity. My belief is companies will continue to pay premium rates for premium service, notice I said PREMIUM, if you go into a customer looking like you just slid off the bar stool, you smell like three day road kill and your truck looks like it just rolled out of the junkyard, that's NOT premium service and your dragging down our industry and contributing to our demise. If you want to look and act like a typical freight hauler from the big three then don't expect premium compensation. It's all part of policing ourselves, if you want to be in an elite service and get paid elite compensation then look and act the part so our companies stand a better chance of keeping their customer and keeping us busy. Have some self respect.

LOOK SHARP, ACT SHARP, AND DEMAND NECESSARY COMPENSATION FOR YOUR EFFORTS!

It's up to us, your company doesn't care. There's always another truck in line when you go out of business.

 

[CharlesD]

As a matter of fact, my company cares very much about my success.

You're right on the money though. What's the cure for low rates? People not running for low rates. The sad thing is that there are always going to be people who will take that cheap load because it's going home and the shippers and brokers know that wherever a load is going to, there is always going to be someone who lives near there and is willing to take the home town discount. Miles are miles, no matter which direction they are going.

 

[timothy_flood]

I can remember as an o/o with roberts Express how many of us wondered why there was no business west of the Mississippi. A lot of us thought just maybe if sales depts would get out and SELL our service that just maybe they'd see how much there is out there and other areas. I've gone to docks and they were shocked that Fedex had a division that provided this service. Could this be part of the problem for most of the carriers out here? If they don't know you exist, how can you do and grow as a business? As stated before, folks will take a cheap load to get home, but when it gets to be the rule, it seems they're hurting the business and more so themselves.

 

[davekc]

I think Charles has it right. That freight that you turn down because it doesn't meet your 1.50 per mile requirement is a self inflicted business decision. Remember, it was your decision to buy your reefer. They are becoming a casualty because of the high purchase and operating costs. The freight simply doesn't match the amounts that are out there. One can still survive, but in a limited market, you had better saved your pennies from years past or it is going to be a rough road.
Pretty much why I discouraged the purchase of the reefers over the last several years. Doesn't mean you can't survive, it just means much less margins.
The load you decide doesn't meet your requirement at say, 1.40, I am the guy without the reefer that will grab it. Maybe to send a truck home, maybe to put with another load.
A whole lot of variables go into the equation.
Probably not want you want to hear, but I am giving you the reality.

 

[ericmoss37]

geez how much is the OP's truck payment? .97 cents a mile seems very high considering O/O in LTL get about .90 cents a mile plus fuel surcharge and they drive fuel gulping tractors.

 

[davekc]

And there is where the problem lies. They are pricing themselves out of the market for the type of freight that is there. I believe most carriers do care that their operators succeed, but only if they are making money in the process.
One of those "Its business, and nothing personal".
If someone is expecting 1.50 on a straight for all miles all of the time, that is fine to meet the operating expenses of the type of vehicle.
But he better have more than one load on there at times or be operating under his own authority.
If not, one may do some extended sitting between loads.
Just remember, your company or yourself can only go after the loads that are there. Not loads that one MAY percieve are there.

 

[Xpediter]

If you think the company your leased to care about your success as a business owner your sadly mistaken. They will continue to offer out cheap freight as long as someone will haul it and they don't care if you sink or swim. It's up to us in the industry to police ourselves, that means it's imperative that you know what it cost you per mile, every mile, to run and maintain your equipment AND make a living. After all, thats why we do this right? Last year it cost me .97 a mile to run my business, that excludes a capitol purchase of an APU and any personal compensation, that's stricktly business expense, ie.: truck payment, fuel, insurance, tolls, maintenance, office poducts, etc. Now, what should you get paid as a driver or team? I saw an advertisment on the back of a Heartland trailer offering .50 a mile for experienced solo company drivers... What's your time and effort worth as a expediter? My wife and I are a husband wife team, we can keep all the money in one family. I sympathize with those teams who are not related, paticularly in these times of cut throat rates, how you can survive is beyond me. If your only putting .20 a mile in your pocket after expenses it's pretty hard for two families to survive! The bottom line of this rambling is this. STOP TAKING CHEAP FREIGHT! I'm not saying not to compromise were and when you can in these trying time, but don't let your company starve you out either. THEY DON'T CARE if you make a living or not!! Know what you equipment cost to operate per mile and what you can reasonably survive on and stick to it. Expedited freight is a specialized industry. THose who use the expedited system do so for a reason and those reasons don't change just because the economy is slow. They will continue to use expedited service because they need it, for the vast majority of our customers it is not a luxury it's a necessity. My belief is companies will continue to pay premium rates for premium service, notice I said PREMIUM, if you go into a customer looking like you just slid off the bar stool, you smell like three day road kill and your truck looks like it just rolled out of the junkyard, that's NOT premium service and your dragging down our industry and contributing to our demise. If you want to look and act like a typical freight hauler from the big three then don't expect premium compensation. It's all part of policing ourselves, if you want to be in an elite service and get paid elite compensation then look and act the part so our companies stand a better chance of keeping their customer and keeping us busy. Have some self respect.

LOOK SHARP, ACT SHARP, AND DEMAND NECESSARY COMPENSATION FOR YOUR EFFORTS!

It's up to us, your company doesn't care. There's always another truck in line when you go out of business.

DUH? no freaking kidding.

 

[davekc]

LOOK SHARP, ACT SHARP, AND DEMAND NECESSARY COMPENSATION FOR YOUR EFFORTS

Yep....what is your "NECESSARY" and what is reality might just be a little different.

Again, don't take it personally as I notice this is your second post. (Welcome by the way). Just giving you the industry view from my prospective.

 

[CharlesD]

Yep....what is your "NECESSARY" and what is reality might just be a little different.

No kidding there. I've been losing quite a few bids lately by bidding my "necessary" rate. If the people want to move their loads at LTL rates, maybe it's time to start treating it like LTL. Exclusive use of my vehicle will come back when the rates get high enough to pay for that kind of service. You get what you pay for.

 

[piper1]

Ya....the line between expedite and LTL is getting pretty blurry these days.

 

[FIS53]

While the original post is relatively correct we do have a thing called a price war on right now. It is hard to keep getting those nice paying jobs and stay busy. So we have to be creative in how to run for a profit in lower priced times. While I agree most companies do not care if you make a profit or not they do care for the company as a whole makes money as otherwise their out of a job. So calls come and at what rates? Unfortunately the companies are finding no choice but to bid competitively or lose most of the calls and then no one is moving. We're seeing the lower rates and the company I'm with is trying to not bid too low as they know we need to make something on a run, but it's hard. They originally stated they would not engage in a price war but really had to when some large customers started shopping prices rather than just give out the runs. Now it's how to make those runs work and get done and the brokers make something. Lucky us fuel prices are lower! (hehehe).
Rob

 

[nightcreacher]

Your company does care,it may seem not,but actually they need the owner opp to stay in business,other wise they would have gone to a company fleet,and that my friends would never work,as now they won't be able to compete in the price market.As most of us have our drivers listed as contract labor,to cut down on the taxes,401,s workmens comp,so do the companies we are leased,so they save on the same.Bigest problem is one carrier to get the business,gives away his rate,and the others think they have to follow to keep busy.
Show me someone that is running for sub standard rates, and Ill show you a someone fixing to go under.
Our companies offer a service,and as long as that service is above par,the rate should stay the same,above par.When the paying party finds you get what you pay for,and the companies paying these substandard rates are out looking for trucks,the rest of us wll be better off

 

[ATeam]

A whole lot of variables go into the equation.
Probably not want you want to hear, but I am giving you the reality.

You are giving one person's view of reality, and there are others equally valid of consideration.

While freight has slowed for us too, 100% of the loads we have hauled in January have been reefer loads and none of them would qualify as cheap freight. Our reefer has given us a PROFITABLE January and the month is not over yet. The profitability figure includes all costs (including depreciation and everything else right down to the cost of shoe polish for our steel-toed shoes).

Diane and I belive that our reefer gives us the ability to pass over loads that do not pay our minimum cost per mile to run. Assumptions formed in good times are tested in bad times. In January, the assumption has proven valid. It would have been even more so had we not turned down a $6,000 reefer run so I could instead fly home for a funeral. That load would have given us a close-to-average revenue month.

In five years, I have never seen business as slow as it is right now, but we can live with that and make money too ... because our truck is reefer-equipped.

Your version of reality is valid. I do not dispute your ability to make a go of it at $1.40 a mile. Kindly note that because reefer-owner ways do not happen to be your way, their way is not wrong.

I presume that both dry-box and reefer trucks are falling by the wayside as the recession proceeds. That tells me it is not the reefer alone that drags them down. If it was the case, only reefer trucks would be dropping out.

 

[davekc]

There will always be exceptions. But there is a obvious reality or we wouldn't have a post of this nature in the first place.
It doesn't mean someone will go broke or anything like that. Way too many things to look at to make that any kind of conclusion.
But I can look at the amount of loads and average price that they are ran at, and put that up against the average operating costs and equipment investment.
And again, I can look at a reefer that someone paid $30,000 for, and I can look at one that paid $200,000
The reefer debate has been gone 1000 times over.
I just look at the overall averages, not the exceptions.

 

[Falligator]

A good example of cheap freight. On Thursday I dropped off a small load in Olive Branch, MS. There was 5 other vans in the area. I was 6th on the board, so I did a few things at the J in Olive Branch, and started to head on my merry way to Florida. I get 60 miles from Memphis and they hit me with a load that was 2,400lbs and was only paying a rate of .75/mi. the load was p/u in Southaven, MS. and was going to Poplar Bluff, MO. Only 154 miles. figuring in the weight and everything, I would have been running that load for free. Not to mention that I was the first person they called on it. So I turned it down. They finally sent it to me again at .77 and I told them i was 80 mi from shipper by this time and it wasn't worth running the load. my gas milage would have been horrid with all that weight on my van. So here I am in Florida. I got down here and already have a load p/u out of St. Pete going to Raleigh, NC on Monday. Guess I'll hang here in the nice weather.....

 

[ATeam]

The reefer debate has been gone 1000 times over.

That's right, and successful expediters keep coming down on both sides of it. So, as a service to new readers, it is best, I think, that when offering one point of viewin the debate, the respectful thing to do is to also mention that there are opposing views and practices; and that when it comes to "reality" there is more than one valid view of it. Doing so equips new readers to do better research and make their own decisions.

 

[nightcreacher]

So here I am in Florida. I got down here and already have a load p/u out of St. Pete going to Raleigh, NC on Monday. Guess I'll hang here in the nice weather.....[/quote]

now take your dead head to fl,add those miles to nc,was the dead head to fl really worth it?yes I realize,fl is home

 

[davekc]

That's right, and successful expediters keep coming down on both sides of it. So, as a service to new readers, it is best, I think, that when offering one point of viewin the debate, the respectful thing to do is to also mention that there are opposing views and practices; and that when it comes to "reality" there is more than one valid view of it. Doing so equips new readers to do better research and make their own decisions.

Don't see many supporting your thought now. Just as I indicated over several years. Show me a margin anywhere that is equal or greater, then I might change my mind.
Not some goofy exception.
At this point, not seeing it based on any industry reports.
I think I am doing the new folks a great service by advising them to shy away from any high dollar reefer vehicle investment at this point in time.

 

[nightcreacher]

Dave,in 1999 I purchased a refer trailer,equipped the way fdcc wanted it then.Trailer cost was 62500 bucks.With a 50 dollar down payment,100 bucks a month for insurance,trailer cost was 1450 per month.add in service and upkeep,trailer was costing me 20000 bucks a year,and with the depreciation and interest,it was almost a total right off.Now I did take in 22000 dollars more a year but,I lost loads because of size and weight of trailer.With a 48' trailer,and W/G equipment,only gives you 43' of floor space,and the weight is scarry,20000 lbs.Would i go out and buy a refer today?answer is no.A trailer today,Tval,wood floor,and ready to run,will cost $90000.Will you be any busier,yes in the winter,or sometimes in the summer,but I have been making the same money pulling their trailer as most of the Tval guys pulling their own trailers.i cant say how this would be if I were in a straight truck.For the same $90000 you can buy a tractor,or straight truck,put a team in it,and you will see much more profit

 

[davekc]

Dave,in 1999 I purchased a refer trailer,equipped the way fdcc wanted it then.Trailer cost was 62500 bucks.With a 50 dollar down payment,100 bucks a month for insurance,trailer cost was 1450 per month.add in service and upkeep,trailer was costing me 20000 bucks a year,and with the depreciation and interest,it was almost a total right off.Now I did take in 22000 dollars more a year but,I lost loads because of size and weight of trailer.With a 48' trailer,and W/G equipment,only gives you 43' of floor space,and the weight is scarry,20000 lbs.Would i go out and buy a refer today?answer is no.A trailer today,Tval,wood floor,and ready to run,will cost $90000.Will you be any busier,yes in the winter,or sometimes in the summer,but I have been making the same money pulling their trailer as most of the Tval guys pulling their own trailers.i cant say how this would be if I were in a straight truck.For the same $90000 you can buy a tractor,or straight truck,put a team in it,and you will see much more profit

Bingo!!!!
That is what I am talking about. We had reefers up until the early part of last year. If I didn't buy them for pennies on the dollar, I wouldn't have had them then.
There is the supposed lifestyle "prestige" of having one, but since I don't drive anymore, I only look at the numbers.
Like I said, if one can show me any, and I mean any, industry report that shows a reefer as a viable option for a expediter, I am game to change my mind. Nothing I have looked at supports it as a "more profitable" alternative.
Once one looks over several expedite load boards, they will see EXACTLY what I am talking about.
I look at reefers now with our carrier and our margins are way ahead of any straight truck reefer in the fleet.
In fact, it isn't even close using last years numbers.
I was only comparing straight trucks, but Steve also confirmed my numbers with a tractor.
They may at certain times run at a higher rate, but when you take the operating costs and initial investment and divide it by the rate and frequency of running, it is a new number.