Cheap Freight

[TeamCaffee]

We have been discussing cheap freight and have decided it is somewhat like a garage sale. One mans cheap freight is another mans treasure!! It is sure hard to actually define cheap freight and what the lowest amount you can accept a load for. If you do not know your cost to run the truck then it will very hard to figure out where your cheap freight line is. It is worth the effort to get the spread sheets out and figure out your costs then you will know what your definition of cheap freight is.

 

[Moot]

One mans cheap freight is another mans treasure!!

Very true! Even a load that pays for fuel only is better than sitting or deadheading if it gets you out of a bad area.

 

[marvinkwagner]

Hello

Ok I may be just a Wheel Turner however I will say this Ive taken lesser paying loads to get into a good area, it works and it beats
DH.

It works.

kevin

 

[bryan]

HI

I disagree.When you haul cheap freight you set a precedence.It will be assumed that you will haul the freight for that rate the next time.Also customers can only price shop for so long because of the nature of our business {JIT}.After awhile they will have to bite the bullet and pay a decent rate if they want it ontime.

We are a specialized carrier which use to stand for more money for a better service.Through the years that seems to have become blurred.

The industry seems to be leaning more towards mixing JIT with LTL.But LTL is based on picking up several loads,consolidating them and then sending them off to their locations.Since we don't have several terminals we can't do this properly or profitably.So we end up lowering our standards.

Also just because an area is a bad area for you doesn't mean its a bad area for everyone.Imagine if I a company came in and started cutting the rates in your hometown.You would have to bounce out of your hometown or just not go home.

Please rethink the cheap freight issue as it effects all of us.

 

[ATeam]

The American system has always rewarded the producers who can provide a product or service faster, cheaper, and/or better. Growing up in Wisconsin, I remember a time when margarine was illegal to sell in "The Dairy State." It seems the dairy industry felt entitled to a monopoloy on butter. Eventually, consumer pressure prevailed and the law was repealed.

I was not around before trucking was "deregulated" and my knowledge of it is limited. However, my sense is that consumer (shipper) demand for less-expensive alternatives trumped the carrier entitlements that were built into laws previously pased.

In expediting, there are those who's expenses are far lower than others. That is because they buy low-cost equipment, run debt-free operations, etc. If a financially-wise expediter can make a good profit hauling freight at say $1.00 a mile, he or she is under no obligation to honor the entitlement sentiments of other expediters who cannot run profitably at the same rate. America is on the side of the financially wise.

 

[easyrider2697]

when you add the cost of sitting and idiling for 2 or 3 days and being completely bored to death then deduct it from your "good paying load" then go back and look at the " cheap freight" load money, you will more than likely have made more money taking the "cheap freght" getting into a hot area and taking another load.
Now I do set a limit of the rate I will move my truck for, based on the cost of running drivers, paying for fuel and having enough left ouver for the truck to make money, but in the end my truck will not sit for over 24 hours unless I want time off or we are doing a wonderful restart.

 

[bryan]

HI

In 10 years we will be wondering why all expedited freight rates are equal to or lower than present day automotive expedites.Because 20 years ago automotive expedited rates were decent rates, now look at them.Use to be if I got a load going anywhere outside of the Great Lakes area I planned on bouncing back mt and was able to make a decent living.Now I have to get a load back because the expenses have increased but the income is stagnant.

Soon the only ones who are going to be making a modest living are the ones who come into the industry with $500,000 in capital.They would of been better off investing it into a savings account.Kind of like the farmer hoping to when the lottery just so he can keep on farming.

Also if a bum walked up to you and ask for money would you give it to him?If not then why give handouts to shippers.Also think of how it affects your salesman's job when he shows up at that shipper trying to get the best rate he can get(so than his o/o's can make a decent living)and the shipper says "no way, we already have your trucks hauling it for a discounted rate" The shippers get the impression that the salesman is gouging him so he doesn't make the sale.

PS don't just take my word on this. Check out what OOIDA has to say about it.

 

[greg334]

I agree with the idea that we need to stop the cheap freight stuff but;

The customer will always find a way to get things shipped

AND

There will always be someone around to take the freight at what ever price the customer wants, period.

And

This industry is just like the Computer Industry, there is no unity, solidarity or what ever you want to call it - the brotherhood of trucking is D E A D. It is everyone for themselves when it comes down to the mighty dollar.

I subscribe to something I was told a while ago, the little things count. What it means is that you can and do accumilate revenue - if this load does not pay well, so what it keeps my truck rolling.

I really don't worry about what Phil is making, or Rich or anyone else for that matter is making (obviiously I don't belive in the political jelousy thing but knowing what others make allows me to set goals) but I also know that Phil, Rich and others can't control my ablility to make money - I can only do that. Also I trully hope we all make money, we are all in this game together.

 

[fastrod]

Everyone talks about cheap freight, but what is cheap freight? 1.00 per mile in a van, 90 cents, 80 cents, 70 cents. What about a straight truck? How about posting prices. I run a van and I go no less than 1.19 per loaded mile. Anything less than that I consider cheap freight.

 

[bryan]

HI

My idea of cheap freight is 75% of what the load would of normally paid you.So at 77cpm base pay; cheap freight is 58cpm or less.That is the way I see it.That a PII van.I see nothing wrong with a straight truck taking a load for $1.00 a mile, but when they run 250 miles for $70.00 there is something wrong.

 

[cowboyz]

Well, Im glad to see someone is concerned about cheap freight on a straight truck. Now I may not have as much experience as some, But lately I have been getting alot of cheap freight offers. I drive a DR unit for FEDEX and it hurts when you only get load offers that average 1.15 to 1.25 a mile. Now for a straight box trk this may be a good rate, But when you have the expense of a reefer, liftgate, etc... I dont think this is such a good rate. I try to find freight that pays a min.. of 1.50 at least,PER advice of others with the same type of equipment. Now I will take cheaper freight to get out of a bad area, But lately its hard to know where a good area is. So what is a man (or woman) to do? I belive that there is a demand for specialized equipment, But is the demand high enough to sit and wait for it? And if one with this type of equipment takes specilized freight at a cheap price, Then there, the standards are being set. Now I may be wrong in all this and if any have a diffrent approach please fill me in, Because as was said in a earlier post, We are all in this to make a good living and in this together.










He Who Sows Bountifully Will Also Reap Bountifully.

 

[davekc]

Your rate is really a LTL rate. Your post should go in the latest payback reefer thread. There have been numerous posts with regards to rates that folks really need to evaluate when making high dollar equipment purchases. If you just hold out for the higher revenue runs, you might be sitting a while.
Flipping x's and o's around doesn't mean anything if the rate is at or less than $1.25 mile. I think you would have to run coast to coast no DH, continously for that number to work.
I even think your 1.50 average is pretty low for that type of investment.
Keep your fingers crossed for better rates.








Davekc
owner
22 years
PantherII
EO moderator

 

[Vinnie T]

Each kind of freight pays a certain amount, transit time had a lot to do with it. Again the term cheap freight gets thrown around like a all encompasing phrase that is not acurate. A 500 mile expedite for a $1.50 (gross pay) per mile for a E unit to an automotive plant with a direct delivery...CHEAP FREIGHT. A load of paper for a E unit that has 3 days to go 500 miles paying 1.50 per mile...NOT CHEAP FRIEGHT. Market, supply and demand all dictate pricing in a capatalist economy, even a socialist economy (Canada). This is why we are called expeditors;-) Say no to cheap EXPEDITE freight! Let that broker find some cheap carrier and give them cheap service to do that load.

 

[RobA]

CHEAP SHOT RE: Cheap Freight

Market, supply and demand all dictate pricing in a
>capatalist economy, even a socialist economy (Canada).


Vinnie ; Here I was reading your posting and agreeing with you until I came across this cheap shot aimed at Canada.
Canada is NOT a socialistic country. We have more services provided at tax-payer expense for which we pay a higher level of taxation.
Freight rates are not regulated here; they are not subject to some government edict or bureaucratic fiat. We have a vibrant free market economy in transportation.
The Trans Border cheap shot served merely to cheapen your argument about cheap freight.

 

[LDB]

>A 500 mile expedite for a $1.50 (gross pay) per
>mile for a E unit to an automotive plant with a direct
>delivery...CHEAP FREIGHT. A load of paper for a E unit that
>has 3 days to go 500 miles paying 1.50 per mile...NOT CHEAP
>FRIEGHT.

I believe these examples are reversed. A straight through run for $750 is far better than a load you have to sit on 2 extra days for the same $750. The first example is $750 gross for the day and the second example is $250 gross per day for 3 days. Unless I'm missing something the second example is much cheaper freight than the first example.

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

 

[dhalltoyo]

Bryan,

I salute you sir! About one in ten seems to get the message.

Motto: If you don't stand for something...you'll fall for evrything!

Anyone with a lick of sense may be inclined to take a reduced rate to move out of a dead freight area. That is NOT the focal point of the discussion. We are talking about saying yes to reduced rate loads on an everyday basis!

XYZ Corporation may find a carrier to haul their freight at a reduced rate in the short term, but it has been my experience that they will eventually return to the most professional carrier to avoid service failures.

When the production lines are shutdown because the Exprez Expedite driver was sleeping at the truck stop or decided take the scenic route...it won't be long before XYZ Corporation is calling the carrier who always delivered on time. I have seen it happen time and time again. Every "Bean Counter" I have ever known has always had their moment of: Tripping Over Gold Boullion To Pick Up Pennies; or Penny Wise And Pound Foolish.

If you say "NO" to reduced rate freight, it will be only a matter of time before your carrier is able to once again provide the valuable service for which we are fairly compensated.

 

[ATeam]

cowboyz,

Do you have specific expecatations about what kind of loads you should be getting, how often, and at what price? Your frustrations may be sourcing from unrealistic expectations. Are you looking for $1.50 a mile with every mile? How many loads do you expect a month? How much money do you feel you need to make to justify the truck you purchased?

 

[davekc]

He says he is running a DR unit and getting 1.15 to 1.25 per mile load offers.
I think he clearly explains that isn't meeting his expectations.
I can see why.
He says he needs 1.50 per mile.
No surprise there.
If you have a reefer unit, you better have a rate above 1.15 a mile to justify it.









Davekc
owner
22 years
PantherII
EO moderator

 

[cowboyz]

I don't really know if my expectations are to high, or unreal. I know that I try to keep all miles at a min. of 1.50, Now I am at about 1.45 all miles, I think 15 to 20 loads a month is about all I can handle at this point and time.(2 small kids) So really trying to make the best of my time and equipment. And I know every month may be diffrent, Depending on time of year,locations,keeping deadhead down and expenses to a min. So many factors. Depending how much cheap freight I turn down, I could end up sitting 6 to 7 days in a 3 week period. Seems like wasted time to me. But.... I still don't know it all and keep posting so all of you guys (and gals)can help me along. Thanks for all the info.






We Are Dealing With A We Thing, Not A Me Thing!

 

[ATeam]

>He says he is running a DR unit and getting 1.15 to 1.25 per
>mile load offers.
>I think he clearly explains that isn't meeting his
>expectations.
>I can see why.
>He says he needs 1.50 per mile.
>No surprise there.
>If you have a reefer unit, you better have a rate above 1.15
>a mile to justify it.
>
Dave,

First, I believe cowboyz can speak for himself. Second, how many times is it now that you have mentioned the $1.15 per mile figure cowboyz posted? You sure seem fond of doing so.

You may be interested to know that today, Diane and I accepted a reefer run (non-T-Val) from California to Kentucky. This run pays $1.91 per mile for all miles (loaded and deadhead combined). In the interests of being fair and balanced, would you be so kind as to mention my $1.91 per mile run as often as you mention cowboyz's $1.15 per mile run?