Cheap Paying Freight!!!!
- Thread starter blizzard2014
- Start date
greg334
Veteran Expediter
OK, I was thinking about this today after I dropped off at the Mexican border and got to say something to add.
You know with this talk of cheap freight and the competition within the industry, there comes a time when you start questioning the idea of helping others into this business because the idea has been fostered in this and other threads that the more competition, the less opportunities for you. Increasing the ranks, increases competition.
I mean when does it really matter how many vans or straight trucks saturate your market share?
To me it is a pain to hear all this talk about cheap freight, as mentioned, I don’t know what it was like in the olden far away days of expediter land and truthfully don’t really give a cr*p, the time I live in is today and what matters is my overall monthly per mile average, nothing else. If I took in account of those days, I am so far below what I made then, I would be better off running a taco truck on the border than driving for any company.
What I find right on is what some people now see what I have been talking about for a long time, the big boys don’t care about cheap freight, they care about taking care of the customer and making sure they retain that customer. The two mentioned, Landstar and FedEx can and often absorb the cost to make sure that the freight is covered, I know this for an absolute fact. But can anyone else do it? Nope, or they can but won’t be in business long. Is this perceived as carrier bashing? Yep but regardless how you cut it, it really isn’t.
So getting back to my thought of the day, is it hurting us to help people get into this or not?
You know with this talk of cheap freight and the competition within the industry, there comes a time when you start questioning the idea of helping others into this business because the idea has been fostered in this and other threads that the more competition, the less opportunities for you. Increasing the ranks, increases competition.
I mean when does it really matter how many vans or straight trucks saturate your market share?
To me it is a pain to hear all this talk about cheap freight, as mentioned, I don’t know what it was like in the olden far away days of expediter land and truthfully don’t really give a cr*p, the time I live in is today and what matters is my overall monthly per mile average, nothing else. If I took in account of those days, I am so far below what I made then, I would be better off running a taco truck on the border than driving for any company.
What I find right on is what some people now see what I have been talking about for a long time, the big boys don’t care about cheap freight, they care about taking care of the customer and making sure they retain that customer. The two mentioned, Landstar and FedEx can and often absorb the cost to make sure that the freight is covered, I know this for an absolute fact. But can anyone else do it? Nope, or they can but won’t be in business long. Is this perceived as carrier bashing? Yep but regardless how you cut it, it really isn’t.
So getting back to my thought of the day, is it hurting us to help people get into this or not?
Perhaps it hurts us collectively if we get poor performers and people with poor business practices into expediting. The customers will refuse to pay premium dollars for poor or inconsistent service.
Conversely, the attraction of good business minded people, motivated to provide a value added service could only have a positive overall effect on the benefits for each of us
Conversely, the attraction of good business minded people, motivated to provide a value added service could only have a positive overall effect on the benefits for each of us
The two mentioned, Landstar and FedEx can and often absorb the cost to make sure that the freight is covered, I know this for an absolute fact. But can anyone else do it? Nope, or they can but won’t be in business long. Is this perceived as carrier bashing? Yep but regardless how you cut it, it really isn’t.
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Gregg, I think you are looking at this with some serious tunnel vision. There are a half a dozen carriers that have been around for quite some time that have no problem "covering" their freight.
To think there are only two carriers with that ability is a misguided statement.
I do agree with Terry in the image we portray to the customer.
As far as brand names, it helps as much as it hurts. Look at the US auto industry. They are all brand names. Looking closer at the expedite industry, one can look at the difficulties that UPS is having launching a service, and then Conway was a staple for quite some time. Some different ways of looking at that. One thing for sure is that the companies that provide full logistic support are the ones that will be around tomarrow.
Davekc
owner
23 years
PantherII
EO moderator
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Gregg, I think you are looking at this with some serious tunnel vision. There are a half a dozen carriers that have been around for quite some time that have no problem "covering" their freight.
To think there are only two carriers with that ability is a misguided statement.
I do agree with Terry in the image we portray to the customer.
As far as brand names, it helps as much as it hurts. Look at the US auto industry. They are all brand names. Looking closer at the expedite industry, one can look at the difficulties that UPS is having launching a service, and then Conway was a staple for quite some time. Some different ways of looking at that. One thing for sure is that the companies that provide full logistic support are the ones that will be around tomarrow.
Davekc
owner
23 years
PantherII
EO moderator
letzrockexpress
Veteran Expediter
Back in the mid 1800's a british economist, Herbert Spencer, in his writing called "The man versus the State", had this to say about "survival of the fittest: "Companies which offer better goods or services survive better in the marketplace and tend to accumulate an ever growing marketshare. Poorly adapting companies will be forced out by better adapting ones, or in effect "killed" by the competition"
I worked at K-Mart back in the 70's. I remember that at the time Sears was the number one retailer in the nation, followed by The big red K. Both companies had been around a long time, Sears much longer of course. It seemed that both had reached a point where they were at the top of the hill and became quite complacent and taken with themselves...so much so they didn't bother to pay attention to the "little engine that could" that was steaming out of Arkansas at 100 mph!! A couple years ago the landscape of the dept. store business had changed so much that those former no.1 and no. 2 chains had to combine just to stay alive!!!
What can we learn from this??? Give your customer the very best service you can, go above and beyond what the next guy will do, and do it at the lowest rate that still makes you money because if you don't , you'll be sitting at home or at some greasy truckstop wondering why somebody else is running your load...Adapt or Die!!!!
By the way I heard that little engine is hiring if your current job isn't working out.They are well branded too. Perhaps you have heard of them...
I worked at K-Mart back in the 70's. I remember that at the time Sears was the number one retailer in the nation, followed by The big red K. Both companies had been around a long time, Sears much longer of course. It seemed that both had reached a point where they were at the top of the hill and became quite complacent and taken with themselves...so much so they didn't bother to pay attention to the "little engine that could" that was steaming out of Arkansas at 100 mph!! A couple years ago the landscape of the dept. store business had changed so much that those former no.1 and no. 2 chains had to combine just to stay alive!!!
What can we learn from this??? Give your customer the very best service you can, go above and beyond what the next guy will do, and do it at the lowest rate that still makes you money because if you don't , you'll be sitting at home or at some greasy truckstop wondering why somebody else is running your load...Adapt or Die!!!!
By the way I heard that little engine is hiring if your current job isn't working out.They are well branded too. Perhaps you have heard of them...
greg334
Veteran Expediter
Dave,
No tunnel vision, just not a good explanation of my thoughts.
What I am trying to say is this;
FedEx and Landstar can absorb the cost of running their expediting groups at a loss for a substantial amount of time. Even though it is not good business to do so, covering the load for a customer to make them happy and retain that customer while at the same time incurring the loss has been done and the same goes for paying the truck sometimes at the same price as what the customer is charged.
With all these companies out there, not naming any, there is truly only two that can do this without killing the company or at minimal impacting the bottom line so severely that they have to exit the market and/or borrow the money to cover their obligations. With some companies that are owned by others, there is a tendency not to run anything near a loss even if there is a long term strategy.
This was also my point with UPS entering the market and leveraging its resources (both in the financial and marketing/sales area) to gain quick market share, they are already understand the market well enough I just see the same issues with UPS as my former employer had when they took over a company – it takes time to get moving. UPS can take the losses incurred and just write them off without hesitation for long term planning to gain market share at the same time wipe a few of the existing companies out who operate marginally as part of the attrition within the market.
This by the way was practiced by the Japanese in the late 70’s and 80’s in the automotive industry, practiced with the Chinese in the manufacturing industry in the late 90’s and with the larger IT companies and the outsourcing to Indian – all proven ways to gain and retain market share. The Japanese, as you may remember were taking a loss on each and every car that they shipped over here even though they showed a profit on their books. The trick was to under price the car in the market to gain market share and then slowly bring up the price as you hit you market share goals. I can go into this in great detail but won’t bore you all with the downfall of the auto companies here.
The important point to remember here is the brand, UPS, FedEx and DHL all are already in almost every company in the country so extending those services is not hard to do with them. And talking about branding, there is a huge difference between services and product branding.
This does not come from any tunnel vision issues I have had lately but rather a reality of big business seeing it from the inside out.
Yes it is all about quality of service as both Terry and Letzrock said but it also is about how the company handles its fleet and retains the good and jettisons the bad within its fleet. You want the best in your fleet, marginally equipment (both mentally and in equipment) and bad attitudes are all reflections on the company and in reality so does the cheapness of a company to pay their contractors. For some reason when the company can’t maintain the specific price for services rendered or nickel and dime the contractor with fees for this or that, it actually hurts the company.
Some of this goes back to the other thread about White Glove and the acceptance of anyone who qualifies but does not prove themselves first – there seems to be a difference between proving one’s worth to the company and just qualifying.
Letzrock the K-Mart you worked for in the 70’s is not the same one today, that company was wiped out when the bankruptcy court nullified the stock and screwed all the pensioners and stock holders – this is a crime that the congress should have done something about. The new company bought Sears to add to their portfolio and extend their product line, Sears may have been in trouble but the new K-Mart was not anywhere close to being in trouble with the huge profit that they made in the 3rd quarter after the new company was established. I still shop at sear reluctantly but I absolutely refuse to go to K-Mart (even sit in their parking lot with my truck) for any reason because of what the courts and the new owners did to people I know who had faith in the companies turnaround and invested into the company when they were asked to do so to help it.
No tunnel vision, just not a good explanation of my thoughts.
What I am trying to say is this;
FedEx and Landstar can absorb the cost of running their expediting groups at a loss for a substantial amount of time. Even though it is not good business to do so, covering the load for a customer to make them happy and retain that customer while at the same time incurring the loss has been done and the same goes for paying the truck sometimes at the same price as what the customer is charged.
With all these companies out there, not naming any, there is truly only two that can do this without killing the company or at minimal impacting the bottom line so severely that they have to exit the market and/or borrow the money to cover their obligations. With some companies that are owned by others, there is a tendency not to run anything near a loss even if there is a long term strategy.
This was also my point with UPS entering the market and leveraging its resources (both in the financial and marketing/sales area) to gain quick market share, they are already understand the market well enough I just see the same issues with UPS as my former employer had when they took over a company – it takes time to get moving. UPS can take the losses incurred and just write them off without hesitation for long term planning to gain market share at the same time wipe a few of the existing companies out who operate marginally as part of the attrition within the market.
This by the way was practiced by the Japanese in the late 70’s and 80’s in the automotive industry, practiced with the Chinese in the manufacturing industry in the late 90’s and with the larger IT companies and the outsourcing to Indian – all proven ways to gain and retain market share. The Japanese, as you may remember were taking a loss on each and every car that they shipped over here even though they showed a profit on their books. The trick was to under price the car in the market to gain market share and then slowly bring up the price as you hit you market share goals. I can go into this in great detail but won’t bore you all with the downfall of the auto companies here.
The important point to remember here is the brand, UPS, FedEx and DHL all are already in almost every company in the country so extending those services is not hard to do with them. And talking about branding, there is a huge difference between services and product branding.
This does not come from any tunnel vision issues I have had lately but rather a reality of big business seeing it from the inside out.
Yes it is all about quality of service as both Terry and Letzrock said but it also is about how the company handles its fleet and retains the good and jettisons the bad within its fleet. You want the best in your fleet, marginally equipment (both mentally and in equipment) and bad attitudes are all reflections on the company and in reality so does the cheapness of a company to pay their contractors. For some reason when the company can’t maintain the specific price for services rendered or nickel and dime the contractor with fees for this or that, it actually hurts the company.
Some of this goes back to the other thread about White Glove and the acceptance of anyone who qualifies but does not prove themselves first – there seems to be a difference between proving one’s worth to the company and just qualifying.
Letzrock the K-Mart you worked for in the 70’s is not the same one today, that company was wiped out when the bankruptcy court nullified the stock and screwed all the pensioners and stock holders – this is a crime that the congress should have done something about. The new company bought Sears to add to their portfolio and extend their product line, Sears may have been in trouble but the new K-Mart was not anywhere close to being in trouble with the huge profit that they made in the 3rd quarter after the new company was established. I still shop at sear reluctantly but I absolutely refuse to go to K-Mart (even sit in their parking lot with my truck) for any reason because of what the courts and the new owners did to people I know who had faith in the companies turnaround and invested into the company when they were asked to do so to help it.
letzrockexpress
Veteran Expediter
Greg,
With regard to your K-Mart comments:
I guess that is why they say desperate times call for desperate measures...Unfortuantely that generally translates into "every man for himself"
With regard to your K-Mart comments:
I guess that is why they say desperate times call for desperate measures...Unfortuantely that generally translates into "every man for himself"
Packmule
Expert Expediter
Greg/Terry,
I agree with you on the two named Companies you stated, but let's not rule out one that I see as a major player in this industry. A company with deep pockets and a goal to acquire a big piece of the market share in this industry. They have a somewhat different goal for accomplishing this than others because the holding company and it's investors do not reap a return on investment until the company is sold.
They are a threat, particularly at this time with the economy the way it is. They are growing by leaps and bounds every day. They are adding trucks weekly and for the most part, they are keeping them moving. Do they quote LOW rates? Are they profitable? are they willing to buy Market share by quoting low rates, even taking loads at a lost from major customers to get their foot in the door?
I think so.
The main concern of this company right now is Gross Revenue, NOT profit. Profit comes in time and with a new captain at the wheel. Right now they just want this boat to look Good (and BIG) to the right buyer.
This is just my read on this company, and I have no hard proof to support my thoughts except that I have seen it before in other industries.
As for as the Company I am talking of, you will have to fill in the blanks.
Danny
I agree with you on the two named Companies you stated, but let's not rule out one that I see as a major player in this industry. A company with deep pockets and a goal to acquire a big piece of the market share in this industry. They have a somewhat different goal for accomplishing this than others because the holding company and it's investors do not reap a return on investment until the company is sold.
They are a threat, particularly at this time with the economy the way it is. They are growing by leaps and bounds every day. They are adding trucks weekly and for the most part, they are keeping them moving. Do they quote LOW rates? Are they profitable? are they willing to buy Market share by quoting low rates, even taking loads at a lost from major customers to get their foot in the door?
I think so.
The main concern of this company right now is Gross Revenue, NOT profit. Profit comes in time and with a new captain at the wheel. Right now they just want this boat to look Good (and BIG) to the right buyer.
This is just my read on this company, and I have no hard proof to support my thoughts except that I have seen it before in other industries.
As for as the Company I am talking of, you will have to fill in the blanks.
Danny
greg334
Veteran Expediter
Danny,
Come on....?
who do you think?
I can think of only two, one is already here - UPS and the other is DHL
If you are thinking about Panther, nope I just can't see it when you put it in perspective of large companies.
Fernway Partners don't have that cash flow to dump into a 'partnership' like FedEx, UPS and others. I think for the gross revenue of Panther is what FedEx spent in Fuel for their planes (yes that was a bit of sarcasism).
Fernwell partners also have other interests beyond expediting, which to me means that they won't commit to larges sums to invest in a market that has big boys playing in it.
Sorry the bottom line I get from a lot who watch all of these companies is the top fortune companies are the ones with the leverage to really pull it off in hard times and already have the market share in shipping needed if they want to focus on a part of the industry to gain more market share.
Come on....?
who do you think?
I can think of only two, one is already here - UPS and the other is DHL
If you are thinking about Panther, nope I just can't see it when you put it in perspective of large companies.
Fernway Partners don't have that cash flow to dump into a 'partnership' like FedEx, UPS and others. I think for the gross revenue of Panther is what FedEx spent in Fuel for their planes (yes that was a bit of sarcasism).
Fernwell partners also have other interests beyond expediting, which to me means that they won't commit to larges sums to invest in a market that has big boys playing in it.
Sorry the bottom line I get from a lot who watch all of these companies is the top fortune companies are the ones with the leverage to really pull it off in hard times and already have the market share in shipping needed if they want to focus on a part of the industry to gain more market share.
Packmule
Expert Expediter
Greg,
I see your point from an overall company view, but, lets keep it in the context of just the Expedited segment of these companies. Remember, FXCC and Express America are only a VERY small part of the larger companies whose Corporate logo they fall under. The revenue generated by the expediting divisions would not even receive honorable mention in these companies generated revenues.
Panther on the other hand is a "stand alone" Expediting company. A very large one at that.
If you were investing in a company to grow and market for a profitable return without trying to build it to the size of a UPS or FedEx Corporate worldwide company. (not keeping DHL out of this comparison for any reason, Just trying to keep it simple)Would you not build to impress a Big company who needs an expediting division to be well rounded in it's service offerings as the other Big companies? A big ROI will not come from an individual who wants to own an Expediting Company. It will have to come from a major company like maybe UPS or someone of that size and Capitol.
Just my thoughts,
Danny
I see your point from an overall company view, but, lets keep it in the context of just the Expedited segment of these companies. Remember, FXCC and Express America are only a VERY small part of the larger companies whose Corporate logo they fall under. The revenue generated by the expediting divisions would not even receive honorable mention in these companies generated revenues.
Panther on the other hand is a "stand alone" Expediting company. A very large one at that.
If you were investing in a company to grow and market for a profitable return without trying to build it to the size of a UPS or FedEx Corporate worldwide company. (not keeping DHL out of this comparison for any reason, Just trying to keep it simple)Would you not build to impress a Big company who needs an expediting division to be well rounded in it's service offerings as the other Big companies? A big ROI will not come from an individual who wants to own an Expediting Company. It will have to come from a major company like maybe UPS or someone of that size and Capitol.
Just my thoughts,
Danny
greg334
Veteran Expediter
"I see your point from an overall company view, but, lets keep it in the context of just the Expedited segment of these companies. Remember, FXCC and Express America are only a VERY small part of the larger companies whose Corporate logo they fall under. The revenue generated by the expediting divisions would not even receive honorable mention in these companies generated revenues.
Panther on the other hand is a "stand alone" Expediting company. A very large one at that."
Danny,
That's my point with FedEx and Landstar, each company is large, is not exclusive and can provide door to door service for almost any type of freight - Be it a plane ride or truck to truck to what ever. The groups within the company can interconnect to provide key services to the customer by the customer's requirements, at least with FedEx. This does not mean that there are not problems with some customers but by providing a portfolio of services, like a 'single go to place' for a company go to for their needs makes a difference for a lot of companies who need things shipped.
Panther on the other hand is a "stand alone" Expediting company. A very large one at that."
Danny,
That's my point with FedEx and Landstar, each company is large, is not exclusive and can provide door to door service for almost any type of freight - Be it a plane ride or truck to truck to what ever. The groups within the company can interconnect to provide key services to the customer by the customer's requirements, at least with FedEx. This does not mean that there are not problems with some customers but by providing a portfolio of services, like a 'single go to place' for a company go to for their needs makes a difference for a lot of companies who need things shipped.
Just a little quirk....when I was with DX last year we did alot of airport work...always took load to UPS. Why? FEDEX does NOT guarantee next day delivery!! EI: Buffalo to LAX.
Packmule
Expert Expediter
Greg,
Yes that is exactly right. FCXX is a definite leader from the overall capabilities standpoint. And have captured a large amount of the FAST freight market, They do not have the largest piece of the "Expedited" freight pie. Of course that pie is now being shared by more than in the past and the pieces have gotten smaller for all.
Greg I agree with you on the strength of the larger companies, and the fact that because they are diversified they can support their divisions and sustain a slow economy much longer than a smaller company.
The point is, FXCC and Express America have a different long term objective than Panther. I believe Panther has been on the block since Fernway bought them and the overall objective is to build and Market the company to a Large transportation company looking to expand it's services.
Again, do not underestimate the size and fortitude of Panther in the Ground Expediting segment. They are a force to be reckoned with and they will go to extreme lengths to gain market share.
Just my take,
Danny
Yes that is exactly right. FCXX is a definite leader from the overall capabilities standpoint. And have captured a large amount of the FAST freight market, They do not have the largest piece of the "Expedited" freight pie. Of course that pie is now being shared by more than in the past and the pieces have gotten smaller for all.
Greg I agree with you on the strength of the larger companies, and the fact that because they are diversified they can support their divisions and sustain a slow economy much longer than a smaller company.
The point is, FXCC and Express America have a different long term objective than Panther. I believe Panther has been on the block since Fernway bought them and the overall objective is to build and Market the company to a Large transportation company looking to expand it's services.
Again, do not underestimate the size and fortitude of Panther in the Ground Expediting segment. They are a force to be reckoned with and they will go to extreme lengths to gain market share.
Just my take,
Danny
I think there in lies the difference. Panther's whole focus is to grow and capture as much of the market as possible. Seems to be working. Fedex and Landstar's expedite is more designed around a value option for customers. If either wanted a large share of the market, they would have moved on it years ago. Of course, it never happened. Now, the other players have become too large. Both would have the cash to buy, but there is no real incentive.
As mentioned, both hardly acknowledge their expedite components exist.
No real reason to as their focus is on small package and or LTL.
Davekc
owner
23 years
PantherII
EO moderator
As mentioned, both hardly acknowledge their expedite components exist.
No real reason to as their focus is on small package and or LTL.
Davekc
owner
23 years
PantherII
EO moderator
NEW RUMOUR!! Just talked to a DX driver...seems Panther is recruiting Canadian O/O's and drivers....Maybe starting a Canadian division to cover Canada bound loads....makes sense since no one wants to go...