Is it the ECONOMY? Or are we to blame for the low rates?

[fastrod]

How do you justify those figures? How long do should I sit until I am offered $1.40 in a bad area while sitting next to my competition who would also like to get out of this area.

Because those fiqures would be the bottom rate for someone to make a decent living in that size of van or truck. How long you sit depends on what Fedex offers and how cheap you are willing to run.

[guido4475]

How do you justify those figures? How long do should I sit until I am offered $1.40 in a bad area while sitting next to my competition who would also like to get out of this area.

Not too long ago, Bob, those rates were the standard in this industry.But along with cut-throat-rate drivers, and Carrier kiss *****, it has went down, while prices of everything else has gone through the roof.I am surprised, with you being a numbers type of guy you are, with all of the fuel-saving things you spent thousands for on your truck, you don't see this!! It's called working smarter, not harder.It doesn't take a rocket scientist to see this.

[piper1]

Guido, I think Team C's point was that the "numbers" are different for everyone and that they should know "their own" numbers and not rely on what someone else has told them.

I can assure you, Bob and Linda know exactly what the numbers are for THEIR operation.

[fortwayne]

I believe it is a combo of factors, but the bottom line is when we have more trucks sitting in a lane than there is freight then the shipper is the one in command.
However, carriers, at least some, are finding new avenues and resources of customers and this in itself in a bonus for all of us. If company ABC has two trucks sitting and their new customers then fills both of those trucks - BAM, two less trucks sitting there for other shippers - creating a more profitable situation for all of us.
I believe we have some carriers that are sitting on the butts waiting for the economy to turn around, waiting for that gravy train to pull in again, instead of actually working to create their own customer base.
Thank goodness for me I am with a company that is always at work for their drivers, for their owner operators and does not sit around waiting for the economy or the government to solve the industries problems - because it ain't going to happen that way.
The industry is what it is - yes we have some low rates, yes we have trucks sitting and yes there are some serious issues.
But, we are not going to solve these issues by sitting on EO complaining about them. We solve these problems by finding an aggressive company that works to build its own future and its drivers future instead of waiting for the industry to weed its way through these problems.

[bubblehead]

Fuel went up, rates went down...tolls went up, rates went down...fines went up, rates went down, parts and labor went up, rates went down...insurance went up, rates went down...arrow went out of business, rates went down...YRC bailed out by AIG who was bailed out Obama, rates went down...cost of CMV registaration went up, rates went down...Qual Com is going up, rates went down...etc. If rates have really gone down (and they have at least to us), then why has everything else gone up? Why does a carrier add and another division/department between the shipper and contractor? Is the shipper really paying that much less? We are expediters, not common carriers. I went to the website of a large carrier today and did a rate quote from zip to zip on an area and load I am familiar with which I normally would get paid $2,200. The rate quote came out to over $9,000. Now that would mean I am only getting 20 something% of the charge which is not even close to my contract rate...so what gives? Is it 9k minus insurance, oh then maybe take $s from the revenue side and move them over to a fuel surcharge colulm (at a different rate) then minus a telecom fee, handling fee inter office re-broker fee, consulting fee and a fee fee. It just seems like for what ever reason, it still looks like as long as other drivers are willing to do this at a loss, we have to deal with the downward manipulation of freight. Cafee, it is supply and demand and the market can be played by the shipper and or carrier. As we are in competition with each other, the shippers and carriers reap the rewards. We will hold our line and if it gets too low then we will get creative and find other means to do this business. Each customer gets our very best service because I want them to call us (the company I represent) back and not brand X. If my service gets you the next load then I have done good because if your are on that next load, I am available for yet another opportunity. So service is what we strive, not cheap rates...I am exclusive use, not common carrier. And I wish that whoever shouted "GOLD" would just go away.

[jaminjim]

The rate quote came out to over $9,000.

And once every two or three years they actually get someone to pay that amount.

[greg334]

Greg, I see where you are coming from, but what I was trying to say was that if we all would stick together and say no to cheap freight, then maybe things would change.But they won't.Because we all can't stick together.Or some of us are too broke because of cheap freight rates to refuse cheap freight.Sounds funny, but it's sad and true.

I understand what you are getting at but reality seems to be a bit different from my point of view.

If we have say 11,000 trucks and 6000 vans in this niche market we call expediting, and a large percentage of these people are independent, then it makes no sense how "we" can band together to change anything when there are 1M to 1.2 M trucks in the industry who are actually effecting the rates and what we end up with.

Dividing the issue up further, we have three types of carriers out there, one is a package delivery company (that is as simple as it gets), one is a 3PL company and the rest are what you would call carriers, common and otherwise. They all have different positions within the market, different goals and needs.

The package delivery company doesn't care about the contractors in their small niche service group, this is an afterthought in many ways and if they did, they could easily bring their brand force to the niche market to wipe out competition. Why don't they do this? Well I think they don't see much difference with this niche service market and what they do in other groups.

The 3PL company is a bit different too, they deal with all kinds of Freight, and again their niche service group is small but augments some of their other work, so it works well for them, even if they farm a lot of their work out.

The others are too vast to comment about, from independents to medium carriers are all scrambling to make a buck in this.

The difference between contractors alone causes any solidarity to fall apart quickly; what one group can do with solidarity, the others can't.

I think that some of us are taking what others are calling cheap freight and using it to get by until things shake out while others don't know better.

And if this happens Greg...you move on. If your acceptance rate falls below what the carrier thinks is acceptable, and most give you a pretty good latitude, YOU as a BUSINESS, are partnered with the wrong carrier.

This is true to a certain extent. Many companies do not give any latitude in regards to real choices, you can't seek out and make a sale to move your truck and want to control where their fleet is to service the customer. The only latitude you have as a 'business' is watching your budget and/or refusing or accepting any work that comes your way.

There will always be guys who will move cheap freight, because to them it isn't cheap, or they are not smart enough to know what cheap is. There is a steady stream of newbies who many carriers prey on to be that ignorant of their own costs. This is a reality in the trucking business as a whole and it is addicted to this supply of cheap trucks, it isn't going to go away. If we all push back...the carriers will just get someone else to move it because they can.

This is true but ... who are we to say what is not smart? Removing the Newbie factor out of the equation for a moment, why would someone think that an average $1.10 a mile is all that bad for a straight if they have a tight grip on finances? This doesn't mean someone isn't smart enough but rather looking at what works for them.

The Newbie factor is another contentious issue, we shoot ourselves in the foot many of the times by promoting this business as easy money or some prestige thing to do.

Not to paint all newbies with the same brush but look at how many of them come on here and are mere days away from orientation and are asking questions like "how much money can I make" or "the recruiter said I would make $x.xx a mile is that true". When they ask questions about trucks they want to talk about big bunks and toys, not fuel mileage and repairs. Now tell me...how many of them are really prepared to run a smart profitable business? After 6 months it's FedEx's or Panthers fault and they are "crooks" or "liars" and now they are broke. Or they had a breakdown and got mad because they had no money to fix the truck and the carrier wouldn't help them out. Even spending just 4 hours reading posts on this website should at the very least send most back to the "is this right for me" phase and do more research.....sadly most just jump in because it sounds so easy.

Yes I agree to a point. But look at how many are hell bent on joining FedEx for example. Don't know what makes people think that this is the place to be when there is a few hundred companies to choose from. I asked the question – if you are making money doing something else, why venture into this mess? I get odd answers but most of them come down to two simple things, either they think this is an easy way to make a buck or they are tired of their own lives and want something different. I can understand both but just because life's a b*tch doesn't mean it is better in a cab of a truck waiting for a call.

However many see the “successful” expediter and ask how they did it but don't get the truth how they made their first million or how much work actually went into paying for their truck when times were better. A lot say “work smart” but what does that really mean? I have yet to see an inclusive explanation of how to actually work smart within some of the limitations we have and with newbies the learning curve that they have to overcome.

Yes many times the company is to blame, of course they are. They are the ones who didn't tell the newbie what to expect on the road or even how to handle life in general, they just gave the newbie a lot of incentive to sign on that line and make millions.

I go right back to my question; "Is it the economy or is it the company?"

[piper1]

This is true to a certain extent. Many companies do not give any latitude in regards to real choices, you can't seek out and make a sale to move your truck and want to control where their fleet is to service the customer. The only latitude you have as a 'business' is watching your budget and/or refusing or accepting any work that comes your way.

True...which was why my point was if it doesn't fit...don't waste your time blaming the carrier...either figure out how to make it work or go to another carrier that is a better fit (and for God's sake do the research!!)



This is true but ... who are we to say what is not smart? Removing the Newbie factor out of the equation for a moment, why would someone think that an average $1.10 a mile is all that bad for a straight if they have a tight grip on finances? This doesn't mean someone isn't smart enough but rather looking at what works for them.

The "smarts" I refer too are the ones that you use to actually figure out what actually does work for you. I have sat and talked with guys who run for rates I think are awful....yet...they run successful businesses because they know what their true costs are.

The Newbie factor is another contentious issue, we shoot ourselves in the foot many of the times by promoting this business as easy money or some prestige thing to do.

Yes indeed sir.....yes indeed!

Yes I agree to a point. But look at how many are hell bent on joining FedEx for example. Don't know what makes people think that this is the place to be when there is a few hundred companies to choose from.

What makes people buy a certain brand of car? Perception and slick advertising (or in our case recruiting). FedEx has that going for it in spades. Truth is, I think you can be successful at any carrier depending on what you need for "success" and how willing you are to work within and learn to work a carriers systems to your advantage.

I asked the question – if you are making money doing something else, why venture into this mess? I get odd answers but most of them come down to two simple things, either they think this is an easy way to make a buck or they are tired of their own lives and want something different. I can understand both but just because life's a b*tch doesn't mean it is better in a cab of a truck waiting for a call.

True, that's where the advertising comes in. A car salesman sells you on the "new car smell" not the true costs of ownership. Recruiters are hired to recruit, not decide if the business is right for you. Sad...maybe but business is business.

However many see the “successful” expediter and ask how they did it but don't get the truth how they made their first million or how much work actually went into paying for their truck when times were better. A lot say “work smart” but what does that really mean? I have yet to see an inclusive explanation of how to actually work smart within some of the limitations we have and with newbies the learning curve that they have to overcome.

I can't come up with a simple definition of work smart, but if you don't know what your costs are, working smart will be a whole lot harder. I had a guy last night complaining to me about the business and one thing he cried about was how much he spent on hotels each year. Hotels I asked, ya he said it was cheaper than idling the truck all night to keep WARM sometimes. I asked him why he didn't have an Espar? "Ah those things are too expensive". So he would rather spend 30-35 dollars a night at a motel or in fuel idling away? "Well ya...I gotta keep warm".BTW, he was also a Canadian guy so cold nights far outnumber the hot ones.

Yes many times the company is to blame, of course they are. They are the ones who didn't tell the newbie what to expect on the road or even how to handle life in general, they just gave the newbie a lot of incentive to sign on that line and make millions.

I don't see this as the carriers responsibility. You as a business are entering into an agreement with another business. I don't expect Wal-Mart to tell me that if I use the frying pan they sold me I may develop high cholesterol from eating fried foods, nor do I expect the car salesman to tell me that if I drive my new Mustang at 140 all day I might end up dead or in jail. IF....I was an employee, maybe I might see it a bit differently but again, buyer beware. Most people I find who are upset and complaining have one thing in common, they fail to take any responsibility for their own actions in how they got to the point they are at. Sometimes that responsibility is to know when to get out or realize that this ain't the life or business for you.

I go right back to my question; "Is it the economy or is it the company?"

It's neither, its us. As long as people either figure out a way to make a living running for low rates OR the carriers can keep selling newbies the positives and the newbs fail to do the research thus, ensuring a steady supply of new "keeners" who don't say no...this will continue. I hear everyone complain about the loss of jobs in their towns yet if they can save a buck by buying something made in China they will. Everyone loves to save a buck, shippers, carriers, us. As long as we as a world continue to look only at low cost, the company who can provide low cost....wins. People in this biz who figure out how to run at the low rates will be the winners, those of us who long for the good old days or expect that we can do something to make them return are wasting their time.

At the very least, I hope that CSA2010 will drive the irresponsible operators off the road...those who make low rates profitable by flouting the law

My apologies for the bold type....I was having to much trouble separating the quotes....a skill I still for some stupid reason have yet to master.

[Dabus1952]

I really dont think ,this industry will have such a big influx of newbies as you might think.First money and loans are very tight , you must have a positive track record (good credit Score) If someone has a good score and x amount of money to invest, Money put away for the rainny day fund.He comes into the business after doing his or her home work. They can run a smart business.
The days of leasing an expediter truck out of Wilmington Oh. (Roberts days ) are long gone.This is a business with a large investment.The price of fuel will shoot up again, your maintance on truck, tolls , cell phone, quad com etc continue to rise. No matter how you look at it. You need to make x amount of revenue per mile to stay in business.A team with out a truck payment can run for less per mile ,then the guy with the big truck payment.I by no means are pushing the idea of cheap freight.Or low pay per mile.I am just stating what Bob and Linda said there cost per mile can be less than the next guy.In the old days life was simple , cheap freight was called a back haul cause its getting me back to the house.Never could figure out how the back haul took them to Michigan and they lived in Georgia.LOL Listen recruiters are no different then a salesman,there out here selling you a dream .There not going to tell you negatives or they couldnt recruit anyone.I understand the fustration of getting low balled on a load.You as a owner operator knows what it takes to make a profit . Therefore you have to take the hit and decline. Its all about your own decisions as you cant expect everyone to ban together and say no. Sad fact but true.

[Moot]

However, carriers, at least some, are finding new avenues and resources of customers and this in itself in a bonus for all of us.

The "true expedite" market is finite. Where do these new customers come from? All carriers scream the "service" mantra because it sounds good. Some shippers are willing to pay high rates for service, but many are looking for the cheapest rate for a particular mode of transportation to ship their freight.

If company ABC has two trucks sitting and their new customers then fills both of those trucks - BAM, two less trucks sitting there for other shippers - creating a more profitable situation for all of us.

You lost me on this one!

[Dynamite 1]

a fine example to the previous post . we had a truck del. to sony in pitman, nj. upon del. they were informed that they wanted part of the load to be taken to ca. and wanted our carrier to do it since it was sat. and we were there. before i go any further be aware the load out was a partner carrier load. so anyway, when he contacted our disrach and got a rate for us to take it to ca. the load was not booked. the team took the load to nj. for the partner carrier about .07 mile cheaper that we would get to haul it. so all in all there is some truth to getting it done for cheap or less expensive which ever term you like. so just on avg. we lost the load over 175.00-200.00 depending on the mileage. we are of the addage that we know what we need to run at to be profitable and we also will not budge from our minimum. if all loads are profitable then so are we. we can afford to sit and wait on our rate and some cannot that is why everyones business model is different.

[x06col]

I don't feel it's a matter if you can "afford" to sit, as in my case I would choose not to sit. Particularly, in NJ this time of year. I'd much prefer to continue to run NJ-CA for $1.93, steada two buks to have something to do. Those that think $175-$200, more or less is the end of the world on a run like that, must be doing "fuzzy" math. I wouldn't want to drink any of that koolaid. Also it seems, many think their time and equipment is more valuable than the rest of us. And i'm going to suggest.......it ain't. To each their own..tho. To those of you that are way top heavy in equipment expense, driving those Taj's......I feel for you, but, jes can't quite reach ya.

Those that are still of the mindset that thw world owes you jes because you are out there, available and have a few expenses......all I can type is, keep up with that mindset for as long as you can. If'n it makes you happy.

[greg334]

I don't feel it's a matter if you can "afford" to sit, as in my case I would choose not to sit. Particularly, in NJ this time of year. I'd much prefer to continue to run NJ-CA for $1.93, steada two buks to have something to do. Those that think $175-$200, more or less is the end of the world on a run like that, must be doing "fuzzy" math. I wouldn't want to drink any of that koolaid. Also it seems, many think their time and equipment is more valuable than the rest of us. And i'm going to suggest.......it ain't. To each their own..tho. To those of you that are way top heavy in equipment expense, driving those Taj's......I feel for you, but, jes can't quite reach ya.

Those that are still of the mindset that thw world owes you jes because you are out there, available and have a few expenses......all I can type is, keep up with that mindset for as long as you can. If'n it makes you happy.

Now for some reason I can imagine Lum or Abner saying all of that, but either way it makes too much sense.

[guido4475]

Guido, I think Team C's point was that the "numbers" are different for everyone and that they should know "their own" numbers and not rely on what someone else has told them.

I can assure you, Bob and Linda know exactly what the numbers are for THEIR operation.

And I never said they don't know their numbers.Anyone can plainly see that Bob and Linda definately know thier numbers and keep track of them.Any one who can tell and see the difference of fuel mileage by removing a sun visor in my opinion, would definately know them.

I was saying that it surprised me by what they said,watching their numbers as closely as they do, that's all.

[bubblehead]

Team C and others have helped us by their writings. Their mistakes didn't become ours because of their willingness to share valuable information. I have never met them but hope to do so in the future. The purpose of the original post was because of the similarities between a few in this business and that of the California Gold Rush...specifically that of 'Sam Brannan' who so publicsized the discovery of the gold it deminished the profit opportunities. When this niche (expediting) was more of a word-of mouth type of thing, the number of trucks to freight was at a reasonable level. The mom and pops and small fleet owners were able to make a good living even after calculating taxes, ssn health insurance etc. But at sometime, someone(s) became the 'Sam Brannan' and the rush began. Now we have Super Fleets & lease schemes that have spread the gold (profits) so thin, the pay isn't much better then drivers working for a transport company as employees. Perhaps this is the nature of the industry and would have happened no matter what. But likely the time table would have been much later allowing us to weather this current economic storm much easier. I say to Team C, thank you for your contributions. And to the loud mouth 'Sam Brannan' types, thanks for nothing.