Driver Pay Falling as Demand Rises, Study Shows

[OntarioVanMan]

William B. Cassidy | May 19, 2010 4:27PM GMT
The Journal of Commerce Online - News Story



Morgan Stanley warns falling pay could hobble carriers in expansion

Driver Pay Falling as Demand Rises, Study Shows | Journal of Commerce

 

[geo]

say no to cheap freight

 

[davekc]

Interesting article. Might be worth a read for many of the expedite carriers. We have all seen the posts and seen many of the actions.
Game playing drivers, pitting drivers against each other in a bidding process to cover something cheap, reduced rate loads, reduction in rates, and the list goes on.

Some better wake up before they find themselves in a real bind and wind up paying a much higher rate to outsource freight they can't cover.
I notice broker rates are steadily on the rise because companies can't cover their loads.
Couple that with tight credit for new folks and CV2010 rules, some carriers are going to be facing some problems.
Might be seeing the start of it with throwing out sign on bonuses. I think some are going to need a little more than that.

 

[nightcreacher]

say no to cheap freight

But what is cheap freight?What one considers cheap,may not be cheap for another.When the carrier your leased to, commits to a load,if it doesn't make your standards you can turn it down,but here's the problem.The load doesn't pay enough to make you a profit,but the customer does a big business,and because of a dead head that is unreasonable,the all in pay, becomes unacceptable.The actual loaded miles pay is fine,it just doesn't go far enough to make up for the long dead head.What should the company have done with this load?Pizz of the customer and turn the load down,or try and find them a truck,when they know most of their trucks are going to turn it down.

 

[OntarioVanMan]

But what is cheap freight?What one considers cheap,may not be cheap for another.When the carrier your leased to, commits to a load,if it doesn't make your standards you can turn it down,but here's the problem.The load doesn't pay enough to make you a profit,but the customer does a big business,and because of a dead head that is unreasonable,the all in pay, becomes unacceptable.The actual loaded miles pay is fine,it just doesn't go far enough to make up for the long dead head.What should the company have done with this load?Pizz of the customer and turn the load down,or try and find them a truck,when they know most of their trucks are going to turn it down.

Those are the type of loads carriers might have to reach into their own deep pockets to subsidize...they don't come up a lot hopefully that they are not that bad...but when they do...well that is the cost of doing business...

 

[davekc]

I would define cheap freight as freight ran continuously below a operators cost for all miles. Whether OOIDA or several other places, one can get within 20 percent of a per mile average using their calculations. A paid for truck and other items won't change that number that much short of interest paid on borrowed money.
It won't be 100 accurate because of all the variables, but will be fairly close.
If a carrier has a cheap customer, they either let them go, or will have to subsidize some or all of their loads much like they do now. We are on a flat rate per mile, but numerous times our carrier has had to go to the well in order for us to do it.
If you know what it costs to operate, setting a acceptable rate is easy.

If a carrier can't compete in that environment, then they really shouldn't be in this business in the first place.

Businessman first, driver second.

 

[OntarioVanMan]

Exactly Dave..carriers know when they have a problem load but we have to play the game...all the time, same ole game...

 

[davekc]

I think carriers that are into that repetitive game playing will be paying a price before too long. Just reading the many posts on here shows many got complacent, then got behind, then tried to make up the financial shortfall on the backs of operators, to where we are now. Change is coming if the industry reports are anything close to being accurate.
The good news is that current operators are poised to benefit if they control costs and monitor and adjust to the new CV 2010 rules.
The ones hanging on with junk equipment are soon to be a liability to a carrier thus reducing their ranks. Plenty of people want to "jump in" that are unemployed, but lack the financial/credit resources to jump in. That is why you see very little for sale on dealers lot. Many financial institutions are looking for prior experience coupled with adequate finances to even be looked at. That shuts the door on a huge crowd.

Truckload carriers will still benefit with the revolving door policies as they have in the past but the pool will be smaller. Carriers operating with a owner operator model with few assets will certainly have some challenges.

 

[OntarioVanMan]

I much prefer a dispatcher being up front as well....
example: I know it is a real bad load but it is a must do for us...I'll give everything we have in it just to get it done..
Then thats where the trust comes in...is he offering everything in the load?..or is it anything close to making this show a profit for ME.

 

[davekc]

I much prefer a dispatcher being up front as well....
example: I know it is a real bad load but it is a must do for us...I'll give everything we have in it just to get it done..
Then thats where the trust comes in...is he offering everything in the load?..or is it anything close to making this show a profit for ME.

It is a give and take. Since we are at a large carrier, we will do a favor for specific people that ask and can deliver on the end of that favor. The new ones or bs'ers with load amnesia might get us once, but they won't get us a second time.

 

[OntarioVanMan]

It is a give and take. Since we are at a large carrier, we will do a favor for specific people that ask and can deliver on the end of that favor. The new ones or bs'ers with load amnesia might get us once, but they won't get us a second time.

We so many new staff now..it is not turnover but expansion....they sound like they are reading from a cue card...you know exactly what they are going to say...*LOL*

 

[nightcreacher]

as long as there are guys that are willing to haul anything anywhere,there will always be cheap freight.If some poor slob,that wants to go home,and there are everyday,then there will be cheap freight.When you have an area that gets more trucks in, than loads out,there will be cheap freight.Starting to sound like jeff foxworthy