Cargo Vans Who Run For More Than One Carrier: An Editorial

**Jefferson3000** · 01-11-2010, 11:02 PM

Originally Posted by Lawrence

This has had a dramatic and negative effect on rates. Do the math - a carrier has an office building, executive team, sales and marketing, operations, safety and dispatch.

Billy comes with his single truck and of course he can underbid everyone.

You never know who has impacted the rates with a load your hauling...at a discount. Might be someone here. It's also called the free market. The good, the bad and the ugly.

Sorry Lawrence. While I appreciate your loyalty to "big boys", as I know they fund your pocket here, I believe your info to be traditional to truckstop gossip, and not necessarily factual.

First of all, every large carrier (a very relative term) started out by being a smaller one. Even Roberts Express was once Roberts Cartage, with only a couple of trucks. Does that make them the only legitimate expedited carrier? Panther didn't come until later, so I guess it must.

Secondly, I must echo what CharlesD said about profit margins. No new business can grow without acceptable profit margins. As the manager of a small carrier, I can vow with truth that I have barely reduced my rates during this recession. Panther has. FDCC has. Most of my customers have been extremely loyal to us and have not jumped ship for price sake. All of my local customers in Orlando and Tampa are still paying upwards of $2 per mile for straight truck service. But in fact our greatest competition has come from Panther, Bounce Logistics and others who are attempting to steal my customers by offering them rates even as low as 1.50 and 1.60 per mile (including FSC) for expedited service. In fact, I have had brokers at Panther disgusted at me because we wouldn't give them "my best price" when they called at 3am. Although we have and will continue to do business with some of the advertisers of EO, I cannot rely on them for everything, as their rates are craaap!

I have never sold "lowest price", only "highest service." This thread was never meant as an angry ventilation, but rather a thoughtful commentary on a matter I have discussed with several people in the industry, and wished only to offer suggestion for discussion.

**Moot** · 01-11-2010, 11:42 PM

Hey I was just trying to keep the fruit local. I guess grapefruit/testicle would have worked also.

**guido4475** · 01-12-2010, 12:00 AM

I am leased to one carrier, and I couldnt be happier. They keep me as busy as I want to be, and my needs are being met.There does not seem to be much loyalty or trust when a person is leased to more than one carrier, as far as I am concerned.

Kinda like a person that cheats on their spouse and expects to be trusted.

**davekc** · 01-12-2010, 12:16 AM

I think the truth is really somewhere in the middle. There is pressure on rates for a variety of reasons. Every carrier including non expedite ones are fighting for freight. The bigger companies do have more costs, but are always battling smaller outfits that run cheaper. On the other side of the fence, you have small carriers that can't compete for the larger accounts or some specialty freight, so they live off the scraps of the larger carriers and compete where they can.
Lets not kid ourselves either in the fact that there is many van drivers not leased to a carrier and run on the cheap with no authority or anything else.
Should one feel sorry for the carriers? Absolutley not. Their internal competition between leased drivers creates and fosters the very thing they fight daily against.
As for exclusive use, it matters on certain loads if it pays. Outside of that, it doesn't exist.
Times have changed.

**fastrod** · 01-12-2010, 04:03 AM

I think it is the bigger carriers that are driving the rates down. Because of the large amount of trucks they have under lease and the large number of loads they do each day they can make a smaller profit on each load. It is the Walmart theory, make a small profit on each one but the large volume of sales makes the profit add up. The mid size carriers have no chose but to lower their rates even lower to try to maintain their market share. This only works when a carrier has O/Os willing to run cheap freight and so far there seems to be no shortage of O/Os willing to do this.
As far as van drivers running cheap and illegal I dont think that is happening on a large enough scale to affect rates for all vans. The bigger carriers are the ones driving van rates into the ground.

**OntarioVanMan** · 01-12-2010, 07:59 AM

Think also Jefferson is trying to point out...when there appears to be a whack of vans and there really isn't...there is a few ghosts out there...So when your carrier says there is no money in the load for DH because there were other vans in that area...just maybe there wasn't and you are taking the hit..for no reason. And it can happen to the straights as well...

**davekc** · 01-12-2010, 10:15 AM

There is certainly no shortage of o/o's willing to run on the cheap. We see daily that loads passing through the system and turned down by the carriers drivers are quickly picked up by a lot of brokers. For everyone that runs at a decent rate, there is another that will haul that same load for way less than the carrier would pay their own driver. That fuels the fire as I indicated earlier. One will notice a carrier willing to barter with their drivers only when they can't broker it out. You may think you're the only truck in town, when in fact there could be several broker trucks that the carrier sees and knows they will run it less than you will.
We are guilty as a willing participant because we will do broker loads, double dip, deck straight loads to get a tractor rate you name it.
The expediting environment has evolved into a different way of operating verses 10 years ago.

**x06col** · 01-12-2010, 10:42 AM

Yessir! Those that have that pie in the sky, big hotshot, "exclusive use" mentality, are a dying breed [literally].

Never could figgure out why someone would want to run "exclusive use" for a buk seventy, when they could go the same direction for tree seventy/

**davekc** · 01-12-2010, 10:53 AM

Originally Posted by x06col

Yessir! Those that have that pie in the sky, big hotshot, "exclusive use" mentality, are a dying breed [literally].

Never could figgure out why someone would want to run "exclusive use" for a buk seventy, when they could go the same direction for tree seventy/

Yep. And that is why I have never understood the mentality of spending upwards to $200k for a reefer truck only to haul something for two dollars a mile.

**greg334** · 01-12-2010, 11:41 AM

I'm not talking about exclusive use in the context of sales (FedEx) but within the context of the contract the the contractual limitations that an owner has. Most who sign with a company, like say E-1, have to provide their own authority, have their own insurance and remove the company signs in order to use your vehicle for anything outside the company while under contract - that is what I mean when I say exclusive use.

I am contracted with a company and have had multiple customers on the truck to increase my revenue. It is not exclusive use of the truck for the customer but of my property by the company.

**fastrod** · 01-12-2010, 02:01 PM

Originally Posted by x06col

Yessir! Those that have that pie in the sky, big hotshot, "exclusive use" mentality, are a dying breed [literally].

Never could figgure out why someone would want to run "exclusive use" for a buk seventy, when they could go the same direction for tree seventy/

Would I be correct in assuming that the difference between buk seventy and tree seventy would be the cost of the baby sitting service?

**Jefferson3000** · 01-12-2010, 03:16 PM

Originally Posted by fastrod

I think it is the bigger carriers that are driving the rates down. Because of the large amount of trucks they have under lease and the large number of loads they do each day they can make a smaller profit on each load. It is the Walmart theory, make a small profit on each one but the large volume of sales makes the profit add up. The mid size carriers have no chose but to lower their rates even lower to try to maintain their market share. This only works when a carrier has O/Os willing to run cheap freight and so far there seems to be no shortage of O/Os willing to do this.
As far as van drivers running cheap and illegal I dont think that is happening on a large enough scale to affect rates for all vans. The bigger carriers are the ones driving van rates into the ground.

It's amazing that in every other area of economics, it's well known that in almost every case, it's the big corporate conglomerates that come and attempt to force out the "mom and pops" by slashing rates. Can someone say "Wal-Mart?" Bank of America tried to kill every small, regional bank in its path by reducing everything and making it impossible for a small bank to compete. Yet in trucking, it's believed to be the "mom and Pops" that are destroying the industry.

**jaminjim** · 01-12-2010, 05:08 PM

Jeff said

it's believed to be the "mom and Pops" that are destroying the industry.

I think that would depend on your rates, If you are bidding competitively with the large Carriers, then you are not driving rates down. If on the other hand you bid with the mind set that you need to get this load and drop your rate then you are helping to drive rates downward.

**DannyD** · 01-15-2010, 08:12 PM

I'm gonna disagree here. If both parties know upfront then it's not cheating. I've been with one company & also recently tried multiple. If one company could keep me busy enough I agree I'd like to go that way.

However, as has been mentioned, there are some companies that would prefer you to also have another company. That's not cheating on anyone. If company A wants ya to use another company & company B knows upfront that they're the 2nd company ya are signing on w/, then I don't see the problem.

I'm paying all my insurance. A company has nothing to lose by having me on board. If they get me 1 run a year they've made a little something off me at least.

I'm not saying 2 companies is the perfect answer. I've even had gripes about the 2 company system. At the same time, if everyone knows upfront it's not cheating.

Originally Posted by guido4475

I am leased to one carrier, and I couldnt be happier. They keep me as busy as I want to be, and my needs are being met.There does not seem to be much loyalty or trust when a person is leased to more than one carrier, as far as I am concerned.

Kinda like a person that cheats on their spouse and expects to be trusted.

**guido4475** · 01-15-2010, 10:14 PM

Originally Posted by DannyD

I'm gonna disagree here. If both parties know upfront then it's not cheating. I've been with one company & also recently tried multiple. If one company could keep me busy enough I agree I'd like to go that way.

However, as has been mentioned, there are some companies that would prefer you to also have another company. That's not cheating on anyone. If company A wants ya to use another company & company B knows upfront that they're the 2nd company ya are signing on w/, then I don't see the problem.

I'm paying all my insurance. A company has nothing to lose by having me on board. If they get me 1 run a year they've made a little something off me at least.

I'm not saying 2 companies is the perfect answer. I've even had gripes about the 2 company system. At the same time, if everyone knows upfront it's not cheating.

But has the 2 or 3 carrier syndrome worked out for you? Where is the dedication and commitment in that to a carrier? From what I have been hearing, on here and elsewhere,it just isnt worth it.Stick to one carrier at a time.

When I ran a s/t I always had this way of thinking that if I cant make a living off of 70 hours a week, I need to do something else.