How's it Going at Landstar?

[Camper]

There are many "versions" of cheap freight. I would be the first to admit that if the opportunity is there, I will double dip the system to move a truck at a high rate.
I'll use the DT quote. "It isn't anything personal, its just business".

Too many newbies seem to have this union mentality that dictates what they think they deserve. There is no minimum wage in this busines. As such, there is no such thing as "cheap freight". It's all a matter of how your business model comports to the prevailing rates as dictated by supply and demand.



Posted with my Droid EO Forum App

 

[ATeam]

Phil,
How many units does Express America have?

I asked that question when Diane and I visited Landstar headquarters in Jacksonville Florida in July. The answer given was approximate. There are a little over 250 trucks in the Landstar Express America fleet, including one big rig, about 100 cargo vans of different varieties (traditional cargo van, Sprinters, cube vans) and the rest straight trucks, also of different varieties.

 

[JimF51]

Too many newbies seem to have this union mentality that dictates what they think they deserve. There is no minimum wage in this busines. As such, there is no such thing as "cheap freight". It's all a matter of how your business model comports to the prevailing rates as dictated by supply and demand.

The 'cheap freight' issue comes not from "newbies", and not from expediting. It's veteran O/Ops that have the biggest issue with it, who have seen rates stagnate, or drop, over the years.

In '96, flat rate for a D unit with Tri State was $1.25 per mile, all miles of load. Now, ppl think they are doing good with $1.00 per mile, all miles. And it's the same in general trucking, as well. As long as there are trucks that will haul for low freight rates, rates will remain low. And it doesn't matter if you are profitable by hauling 2 or 3 loads, if the rate is real low, you are contributing to the problem of rates staying low.

As for it being a 'union' mentality, how so? I doubt anyone coming into this, realistically, having done their home work, will have high expectations. And union drivers could care less about freight rates, as long as they get their hours and wages.

 

[Camper]

The 'cheap freight' issue comes not from "newbies", and not from expediting. It's veteran O/Ops that have the biggest issue with it, who have seen rates stagnate, or drop, over the years.

In '96, flat rate for a D unit with Tri State was $1.25 per mile, all miles of load. Now, ppl think they are doing good with $1.00 per mile, all miles. And it's the same in general trucking, as well. As long as there are trucks that will haul for low freight rates, rates will remain low. And it doesn't matter if you are profitable by hauling 2 or 3 loads, if the rate is real low, you are contributing to the problem of rates staying low.

As for it being a 'union' mentality, how so? I doubt anyone coming into this, realistically, having done their home work, will have high expectations. And union drivers could care less about freight rates, as long as they get their hours and wages.

It mostly comes from newbies who listen to the "veterans" who got into the industry in the 90s when the environment was more conducive to the higher rates they've come to expect.

The main reason so many fail is they only look at the upside and not the downside. This industry, like many others has just as much downward mobility as it does upward mobility.




Posted with my Droid EO Forum App

 

[mcavoy33]

It mostly comes from newbies who listen to the "veterans" who got into the industry in the 90s when the environment was more conducive to the higher rates they've come to expect.

What is wrong with newbies posting to encourage others to not accept cheap freight? How does that hurt the industry?

The way I see it, it serves to cause awareness and increase education. I honestly don't expect someonewho can make money at a lower rate not take the work.

How is that a bad thing?

 

[Camper]

What is wrong with newbies posting to encourage others to not accept cheap freight? How does that hurt the industry?

The way I see it, it serves to cause awareness and increase education. I honestly don't expect someonewho can make money at a lower rate not take the work.

How is that a bad thing?

There is no such thing as "cheap freight". It's a relative term, used too broadly.

Also, nobody here is "pro cheap freight". If a load can be ran at a profit, there's no shame in running it.


Posted with my Droid EO Forum App

 

[mcavoy33]

There is no such thing as "cheap freight". It's a relative term, used too broadly.

Also, nobody here is "pro cheap freight". If a load can be ran at a profit, there's no shame in running it.

What is wrong with using the term too broadly?

As for your 2nd line, I agree, as I said in my post, I don't expect anyone not to take freight that is profitable to them. It doesn't even have to be profitable for them to have a legit reason to take it.

 

[greg334]

What is wrong with using the term too broadly?

Because it seems most who are complaining about the Cheap Freight problem are the ones who are working for companies that restrict their contractors.

As for your 2nd line, I agree, as I said in my post, I don't expect anyone not to take freight that is profitable to them. It doesn't even have to be profitable for them to have a legit reason to take it.

Profitable is like Success, a term defined by the individual.

As I said in another thread, I can load my self up with 3 loads and make more money than a single load - all of it seems to be considered cheap freight. I got bashed for it because it went against the grain but many do it and make a living at it.

My truck is paid for, my costs are less than many, so if I can run the freight, make the same profit, then I run the freight and make the same profit while others are just sitting there waiting.

In another thread I said;

My opinion for what it's worth - that's dumb. Really really dumb. (this was in response to the poster saying that he would rather let the truck sit than put cheap fright on it to move it)

Here is what I would do, just for **** and giggles... Take the tractor and get a trailer of my own, I would increase the split with the driver to retain them and have them run it as much as possible with anything that I can get on it.

WHY?

BECAUSE it is a revenue generator when it is moving but it costs money just sitting.

The key (this is not for you but others who are reading this) is to make something with it and forsake the asinine thing over cheap freight because it isn't going to go away.

IF that truck after costs produces $2k in revenue in MY pocket is $24k a year that I didn't have before. SO I conclude that IF you can't get that solo driver to produce revenue above $60k than you need to seriously look at how you are managing your entire fleet, not just that one truck.

It seems many don't just get that, they think that cheap freight can be fought by not taking it while others see only opportunities to make money.

 

[Camper]

What is wrong with using the term too broadly?

As has been said countless times, it's a relative term, not some one size fits all term.

"Cheap freight" to the contractor with the high overhead might well suit the other contractor with no truck payments or significant obligations.





Posted with my Droid EO Forum App

 

[mcavoy33]

Greg,

It was me that was bashing you, but I was doing it to promote my agenda, I never replied afterwards because Iagree with your reasonings for taking the loads, I would do the same thing if I was in your shoes.

But imo it better serves my agenda if people don't haul cheap freight.

 

[greg334]

So you were the one who sent the two page rant to my inbox?

Seriously, I know you are one of a couple who disputed my reasoning, which is a good thing by the way.

What's your agenda?

 

[Camper]

I don't understand the rhyme or reason to this "Say no to cheap freight" agenda. Rates are what they are. The only way they're going to increase is if demand picks up or if supply/capacity drops to the level of demand.

Rather than rant about the rates, maybe you can take one for the team and voluntarily decreaase the capacity by one.



Posted with my Droid EO Forum App

 

[mcavoy33]

I don't understand the rhyme or reason to this "Say no to cheap freight" agenda. Rates are what they are. The only way they're going to increase is if demand picks up or if supply/capacity drops to the level of demand.

Supply and demand.

Right now there is an abundance of supply. Nobody denies that.

Would you agree that the number of people willing to haul for $1.00 / mile is greater than those willing to haul for 0.90 / mile?

Would you also not agree that the number who are willing to haul for 0.90 is greater than 0.80?

If I can convince people to not take the 0.80 loads, guess what that does to the supply of drivers willing to haul for 0.80?

What would the impact of a smaller supply of people willing to haul for $0.80 do? Eventually if enough people stop doing it, then the market will force the price up slightly.

Yea there will always be people willing to haul for less because it works for them, but it doesn't hurt me to tell other people to not accept 0.80 loads. Maybe I really want them for myself.

 

[ATeam]

Rather than think about cheap freight, Diane and I prefer to think about lucrative freight. That's what brought us into FedEx Custom Critical in 2003 and into Landstar in 2011.

Don't position yourself to say no to cheap freight. Position yourself in a way that the lucrative freight will say yes to you.

 

[Camper]

Supply and demand.

Right now there is an abundance of supply. Nobody denies that.

Would you agree that the number of people willing to haul for $1.00 / mile is greater than those willing to haul for 0.90 / mile?

Would you also not agree that the number who are willing to haul for 0.90 is greater than 0.80?

If I can convince people to not take the 0.80 loads, guess what that does to the supply of drivers willing to haul for 0.80?

What would the impact of a smaller supply of people willing to haul for $0.80 do? Eventually if enough people stop doing it, then the market will force the price up slightly.

Yea there will always be people willing to haul for less because it works for them, but it doesn't hurt me to tell other people to not accept 0.80 loads. Maybe I really want them for myself.

You can try convincing others not to accept those .80 and under loads until the cows come home and it still won't make one iota of difference. The bottom line is there's a surplus of vans currently sitting. If you dont wan't those .80 and under loads, Many of them are willing and able to accept those loads. In many cases, the alternative is sitting around, waiting for that "good load" that might not come.



Posted with my Droid EO Forum App

 

[chefdennis]

People can complain about cheap freight as much as they want, and they have been probably before i got into this business 4.5 yrs ago and for sure they have been since i got in...it ain't changed a thing and it ain't going to....as has been pointed out, whats cheap for one, isn't for another...



The carrier I lease doesn't take cheap freight, for that i am thankful, but , i personally can run for gas money if needed to...that being said i certainly wouldn't...but the fact that i won't has nothing to do with what it would cause within in the industry as far as rates go....The fact is that the rates paid to the contractor has more to do with the CARRIER, then the industry as a whole...if that isn't true, please explain why one carrier can pay more for a run that another carrier can get for the same rate for the exact same run and pay less...NLMI freight come to mind...my previous carrier always swore they couldn't pay more for those loads because they were cheap...i now know that is nothing but bs.....

People getting into this business at anytime have a comfort level with rates, most often those rates are less then what they were in the past....Thats because they weren't around in the past for the most part...But as i said, it has more to do with the carrier you lease to then the industry as a whole....

Tell people that they are running cheap freight all you want. it ain't goin to change a thing...

 

[Camper]

Rather than think about cheap freight, Diane and I prefer to think about lucrative freight. That's what brought us into FedEx Custom Critical in 2003 and into Landstar in 2008.

Don't position yourself to say no to cheap freight. Position yourself in a way that the lucrative freight will say yes to you.

Rather than labeling freight "lucrative" or "cheap", I prefer to judge all offers on whether it's profitable or not. If that .80/mile run is profitable, I'm not inclined to turn it down on the basis of it being a "cheap" rate. There's too much emphasis being placed on the top line and not enough on the bottom line.


Posted with my Droid EO Forum App

 

[cheri1122]

That's Diane, a/k/a She Who Must be Obeyed.

I've met Diane, and she's not the 'Princess' type. [That's a compliment, BTW.] Don't think you're a Rumpole, either - but I enjoy the blog.

 

[moose]

Well, you can shout supply& Demands or Cheap freight till the Mooses cows go home...but in the LTL divisions one LARGE carrier just increase rates :

Old Dominion Announces Rate Increase

many Expediters haul for this carrier or alike on a daily basic, and those increases will effect our revenue.

 

[mcavoy33]

Well, you can shout supply& Demands or Cheap freight till the Mooses cows go home...but in the LTL divisions one LARGE carrier just increase rates :

Old Dominion Announces Rate Increase

many Expediters haul for this carrier or alike on a daily basic, and those increases will effect our revenue.

See its working lol

In order to meet that demand and deliver on the commitments we have made to the market place, we must continue to build our network and systems. However delivering on that promise is capital intensive. Therefore, the increase is necessary to offset the rising cost of new equipment, escalating insurance costs, securing new service center capacity, continuing to develop state-of-the art technology, and providing for competitive wages and benefits.