6 weeks in and deeply disillusioned

[Quick2Ship]

After months of careful and cautious investigation we selected a company (the biggest and best known name) and purchased 2 new trucks. $225,000. Mortgaged our existing trucking business and home to do so. Attended the rigorous orientation, and comitted ourselves and our handpicked other drivers to excellent service and long hours. It is the most disappointing experience we can imagine!
We were quoted $1.57 - 1.87 per loaded mile for D units, with fuel surcharges and deadhead considerations. We're a team, have a 22' straight truck, pallet jack, D rings. We've been on the road 6 weeks, 95% of the loads offered were in the $1.10 - $1.20 range and some as low as 85cents. Deadheads of 250 miles plus are very common. We've had to renegotiate nearly every load offered to get it into the $1.30 range - and sacrificed our load acceptance percentage (now below 50%) to do so (refused the load based on $/mile until it was offered at a better rate).
Turns out the fuel surcharge is included in the quoted rate per mile. Also, that rate includes the tolls (many times thru Chicago and across CA bridge and the load indicates 'no tolls'). We're offered loads 200+ miles away with 30 minutes to pickup time. When we turn them down because it simply isn't possible, it affects our acceptance percentage.
Here's the biggest disappointment of all. We've grossed over $18,000. We've had less than $6,000 deposited to our account! We're only taking 20% on ComData for fuel, so that isn't it. It's the escrow account, the qualcomm installation, the weekly qualcomm fees, the decal fees, broker charges, customer rebates, etc. etc. And it's not that we're screwing up...our availability is 86% and our on time pickup and delivery is 100%.
HOW ARE YOU GUYS DOING IT! Did we get sold a bill of goods by the most recognized name in the industry, or is this really how this industry works? If so, how do you pay your mortgages, and your truck payments, and your drivers?
:(

[RichM]

Based on what you posted you are missing $8400. Q/Comm ,Escrow,Decals do not add up to that amount so something is wrong. Did the 18K gross in 6 weeks come from one or two trucks. These days competition in this industry is fierce and the shippers know it and play carriers off against each other.

There is no magic wand to wave and say you should do this or that. This time of the year is generally the slowest time so it will probably get better for you after March. Side note when you refuse a load,do it by phone and not Q/Comm,frequently the dispatcher will feel your pain and not log the refusal in against you. But the Q/Comm has no emotions and doesn't care about why you must say no.

Good luck and welcome to EO,keep us posted.

[bruchar]

1. I'd be curious as to which company you are leased.

2. I would not start out with 2 new units. ( depending on previous experience).

3. This is typically the slow period. Although, the last quarter of the year did not materialize as far as income projections and business levels.

If you need help or guidance, there are many people here to lend you advice. This is a tough business. Feel free to PM me if you would like and I hope things will get better for you.

[themagicoen]

Well by what you said it sounds like you went with Fedex CC. Well I drove for P2 for 6 months and I grossed at a team around $60-70k and fuel was $20k so not too bad. With 2 trucks you should be doing $300k to 400k/year. Being that it's been only 6 weeks you haven't had enough time to learn the freight lanes and learn where the good loads come from, where they go etc.

[LDB]

I'm guessing you are with FX and that's the reason for the broad range of load pay. In about 98% of loads offered we get full rate so we know going in what we'll make per mile. The unknown is fsc and any accessorials on that particular job. I tell everyone it takes a minimum of 90 days to learn enough of a company's operating systems and freight lanes to make good decisions as far as where to go and not go. That doesn't cover revenues that are significantly below promised amounts though. There's no way to overcome that with knowledge of lanes. With such a large portion of revenues not distributed yet I'd ask for an accounting of them and compare that closely with escrows etc. listed in your contract. Good luck straightening things out.

Leo Bricker, 73's K5LDB, OOIDA Life Member 677319
Owner, Panther trucks 5508, 5509, 5641
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.

[Lawrence]

Quick2Ship,

Welcome to EO! I'm sorry to hear that you are having a difficult time - even though it sounds like you may be running hard, just not earning enough.

I think you will get some great insight from this community, so maybe you can turn this thing around.

I did notice that this was your first post - however you mentioned you did research, I'm curious were you able to take in one of Workshops or Expos or read our forums?

Lawrence,
Expediters Online.com

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[davekc]

I would have the same question as Lawrence. If someone is just entering the industry, most give the advice of driving for someone else to learn the business and characteristics of a particular carrier.
This also provides a stream of revenue numbers in order to determine a proper investment strategy.
I hope your only source of information wasn't a handout or something in a truck stop.
Short of a few "you can be a millionaire" posts, your described path isn't what you would see here on EO or one of the workshops.

To be brutally honest, I would have never mortgaged a truck(s) against a personal asset. Maybe against another business depending on several factors, but NEVER your home.
Secondly, buying two new trucks would not have been the best advice either for someone new.
What a carrier tells you and what is reality in many cases, are two different things as you are quickly finding out.
The good news is, you are starting out in the slowest part of the year, so it should get better. There is intense competition, so don't expect much movement in rates until the 3rd or 4th quarter.
Additionally, because of these challenges, I would sell one of the trucks, and operate the other until you are in a cash only position.
Why? If the other truck stops producing revenue for whatever reason, (and there is a laundry list) you are in big trouble trying to carry the cost with revenue from one. Unless of course, one is already paid for.
My advice anyways is based on your limited information.
For new folks, don't get taken in by "300,000 a year is very doable", or "we always average $3.00 a mile" etc.











Davekc
owner
22 years
PantherII
EO moderator

[guest]

You are feeling exactly like we do a lot of the time. The numbers have never consistently matched what the recruiters spout, but overall, we are netting more in 1 D unit than we did with 2 tractors and 4 trailers (not expediting). If both of your trucks grossed $18,000 a month this time of year, I'd say you're doing something right. We have to negotiate a lot to stay over our minimum standard per mile, and it's the total revenue divided by all miles, and sometimes the next potential deadhead that influences our minimum per mile. We don't worry about surcharges, tolls, etc. People on here are obcessed with the fuel surcharge, but it's really the total revenue on the load that counts.

I know many people don't have the luxury to do so, but we run on our own money for fuel and have never activated our ComData card. Once the C-link installation, escrow and signs were taken out of our settlements in the beginning, we now get our full check every week. We just don't like anyone messing with our money and hate paying all the fees. We would go nuts sitting around waiting for a load so we could rush in the truckstop to cash out the advance, which probably isn't big enough on most loads to fill the tanks! I would advise trying to run on cash as soon as possible, if you can.

While not being the pie-in-the sky you were promised, it is an interesting job, and if you can keep on like you are you should do well.

Mike & Cindy

[TeamCaffee]

There are a couple of things I don’t understand on this post. Rigorous Orientation, which sure does not sound like [font color="purple"] FEDEX [/font][font color="blue"]Custom Critical[/font] or paying broker fees. We have found FedEx to be very accurate with their bookkeeping and I do watch our income very closely. We also found that what our recruiter told us was exactly what happened when we started. We started in January and where told to expect a very slow start which is what we wanted being new to this type of trucking. We have also been offered loads picking up 200 miles away and the pickup time is always adjusted and if we run into traffic the time is also adjusted again. We where also told when starting in expediting part of what you will learn is how to position yourself for loads which takes time and experience. You also mention researching the forums rigorously which has always been stated “do not mortgage� your home to get into expediting and also have a good cash reserve. It sounds like what would help you a lot is to start talking to other drivers more and try to find a mentor with the company you are with.

[jaminjim]

To talk about this further makes no sense, untill they come back and answer some basic questions. Like 18k per truck, or for the two? if for two thats real low for teams, even considering the time of year.

[Quick2Ship]

Thanks for the replies...all good questions, good suggestions.
For the record, I never mentioned my lease company by name. If my experience is unusual, or if there are mistakes that can be ironed out, I'd hate to muddy the waters for another o/o or cause that company a problem.
We bought one truck "ready made" from a dealer with specs a bit beyond what we really wanted (the price was right and it was ready to roll) and had the 2nd truck made to order to our own -more conservative - specs. There was a six week delay between picking up the ready made truck and the 2nd made-to-order truck.
We climbed into the 1st truck as a team to 'learn the ropes' before putting hired drivers into either truck. Our plan is to have hired drivers full time and ourselves as backup to keep the trucks on the road.
The $18,000 in 6 weeks was for 1 truck, 1 team 86% availabilty December 15 through now.
The 2nd truck is ready, insured and sitting waiting for us to decide what to do.
We borrowed from our regular commercial bank for one truck, which cross collatoralizes all our loans. All our assets are at risk every time we borrow money. The other truck was through the manufacturer's lending program - a great interest rate (5.75%) - but also cross collatoralized to our personal assets. We never said "Here, take our house as collateral".
For research in advance, I spoke to 4 truck dealers who specialize in expeditor trucks, read this forum several times,in fact used it to find the 3 'final pick' companies and one of the truck dealers we purchased from. We asked each recruiter the same list of questions, wrote down all the answers. Called and verified the information, narrowed it down to 2 companies. Spoke to one expeditor from each company (picked at random from a local truck stop) Then repeated our final question- rate per mile - one more time, made our choice based on that and signed on.
I hope this clarifies. I'm truly looking forward to your feedback and advice.

[lanier1]

As TeamCaffee stated this doesn't sound like the FECC I know either. My pay has never been off a cent that I can tell and I watch it very closely as well. Orientation takes all of 2 days and off you go. Hardly rigorous I would say. It is the worst time of year to be starting and it definitely takes time to learn the freight lanes as already stated. I think its too early to jump ship with whoever you are with and I think we would all like to know who that is. I don't think you have said anything so derogatory against whoever it may be to prevent you from disclosing.

[RichM]

So you averaged $3,000 per week for one truck team during one of the slowest time periods of the year. Sounds decent to me. However the question is how many miles did you drive to earn that 18K.

[terryandrene]

Welcome to the EO forum, and welcome to expediting.

It's often difficult to provide concise comments on some posts here because of the belief by many posters that their truck dealers and carriers should remain a secret. It is no secret that every advertiser and sponsor frequently visits the Forums to see what's happening in the industry, how drivers feel about company policies, how drivers talk about various trucks and their accessories.

We have often encouraged folks to discuss facts, as they see them, about carriers and vendors. Facts, either pro or con, help everyone on the Forums as well as they carriers and vendors. Unsubstantiated, negative and inflammatory comments are not welcome here.

I too surmise that you are leased to FedEx Custom Critical. I also surmised that you mortgaged your house to pay for the trucks because you mentioned that in your original post. You also mentioned your concern for your percentage of run refusals. Whether you're with FedEx, or not, many of us believe that you should never allow a business decision about run acceptance to be swayed by your carrier's run refusal statistics. Business first!

The busy season is nearly upon us, our best wishes for you getting your fair share of the full tariff freight.

[Quick2Ship]

Thank you for the continued responses... if my comments were unsubstantiated, negative or inflammatory, I sincerely apologize. If I am correctly reading between the lines, the advice seems to be:

1. pay no attention to the rates per mile quoted by recruiters

2. slow time of year means lower pay per mile as well as longer waits between loads - but hang in there both will improve

3. expect about 1/3 of gross for deposit after insurances, decals, escrows, qualcomm fees and misc. installation chgs for the 1st 3 months or so

4. plan to have 3 months of truck payments, mortgage payments, and other ordinary expenses in the bank when you start

5. acceptance statistics are practically meaningless

6. Fed Ex and Panther are great companies to work with

7. This site is a good source of information and advice from some very sincere and dedicated people

Did I get it about right? Thank you all!



;-)