If you're giving them a straight 15%, how do you get paid a set amount for D-Time and hand-unload?
Major loss in the battle against cheap freight!!
- Thread starter Humble2drive
- Start date
If you're giving them a straight 15%, how do you get paid a set amount for D-Time and hand-unload?
of course WG/TVal are still doing pretty well.....just try being a surface truck for a month.....then ya might be dancing to a different tune...*LOL*
we don't....it's 64% like Hawk said they take 36% of accessorial charges
DaveKC said, "I don't believe I could operate in the environment you describe and remain profitable." The "you describe" refers to the description Humble2drive offered in the opening post of this thread.
If Diane and I operated in the environment Humble2drive described, we probably would not be profitable either.
While we are FedEx Custom Critical contractors and operate under the same new dispatch system Humble2drive does, we are profitable. The difference is not in the system itself, but in how we view the system. Perceptions determine your choices and your choices determine your profitability.
Success is not about your carrier acting on you. It is about you acting in your own best interests.
As independent contractors, we are in business to serve our own best interests first. While it is true that our own best interests are realized by serving our customer's best interests, that is true only to a point. When our customers (or carrier, if you wish to look at it that way) seek to hire our services at rates that are unprofitable, Diane and I make our services unavailable.
To be available to serve our customers' best interests, we must be profitable enough to stay in business. That means running at more than breakeven rates. It means running at a meaningful PROFIT. It means making enough money to do what we do now, instead of doing something else.
Humble2drive describes a system in which we are players in a battle against cheap freight. In our view (perception, the way we describe the system), our carrier choice and load acceptance decisions have nothing to do with such a battle.
When making load acceptance decisions under the new dispatch system, we do it exactly the same as we did under the old. If we changed carriers (no plans to do so), we would accept loads exactly the same as we do now. And if we got our own authority or got with a carrier where we could bid our own loads, our bids would be no different than they are today.
We know, to the penny, how much it costs to operate our truck. We know, to the penny, what kind of a profit margin we require to remain in the business. In these numbers, everything is included to get to an accurate profitability picture. We don't play funny-money accounting games like overlooking depreciation (replacement cost) of the truck. We don't pretend we are profitable because we made enough to cover this month's truck payment and buy a new chair for the house. We include expenses that are easily overlooked like the cost of shoe polish for our steel-toed shoes and the cost of the shoes. We know our numbers, because without them you cannot know if you are profitable or not.
To determine your numbers, you do not need to be a warrior in a larger battle to fend off cheap freight. You need to fend off the temptation to watch TV and instead sit down with a pencil and paper (or spreadsheet) and figure them out. Placing yourself in the middle of some grand morality play or seeing yourself as a victim of larger forces (the perception thing again) does absolutely nothing to help you know how much it costs you to run your truck.
Once you know your numbers, you know what is profitable and what is not. And with that, you can very clearly zero in on serving your own best interests when choosing loads, your carrier or other career path.
There is of course more to the story; namely the other trucks you compete against. With our carrier, there is competition among trucks. That was true under the old dispatch system. It is true under the new. So what? Is there anyplace in the industry where there is not competition among trucks?
Wherever you are, and whatever method(s) you use to get freight on your truck, there is always competition among trucks. That competition makes it important to manage your business well. It means choosing your niche in the industry, marketing yourself as worthy of your customer's business, knowing your costs and setting a price point that means profits for you.
That's all fine and good, you may say, but what about in a severe recession like the one we are in, when rates fall and the number of trucks willing to still haul freight grow? What of your precious price point then?
I have two answers to that. First, if the freight don't pay, we don't play. Second, when freight is not as abundant as it used to be and rates are falling, it is not an external battle to fend off cheap freight, it is an internal battle to become a better competitor than others. This is also true in good times, but the bad times are less forgiving of weak competitors.
Regarding cheap freight. Cheap is a relative term. What may be cheap to one contractor may be lucrative to another. Diane and I don't think about cheap freight. We think about profitable freight. If the load don't pay, we don't play. That is not about the industry or what other people are willing to haul freight for, it is about us acting in our own best interests.
It comes back to perception. We do not see ourselves as warriors in a battle against cheap freight (though our behavior would win high praise from people who do see themselves as warriors in such a battle). We see ourselves as independent contractors operating to serve our own best interests.
At present, and as has been the case for the last 5.5 years, our own best interests are best served by contracting with FedEx Custom Critical. That has been true in good times and bad. It has been true under the old dispatch system and new.
This is not an idle statement. We have checked other opportunities in detail, but keep coming back to the same conclusion. As contractors seeking to accomplish the precise business, financial and lifestyle goals we have set, FedEx Custom Critical has been and continues to be the best place for us.
The day that changes will be the day we change carriers, change the way we put freight on the truck, or maybe even change our minds about running an expedite business at all. I do not see any such changes coming anytime soon.
From the day we entered the business, we sought to be good competitors. Knowing that slow times were likely to come (experienced expediters told us so over and over again), we prepared by becoming debt free, cutting our living expenses to a fraction of what most people have, and building financial reserves.
That gives us the ability to sit for months at a time if we had to. But the freight has not stopped, it has slowed. So we are not sitting for months at a time and do not expect to.
More important than giving us the ability to sit for months at a time, our good-competitor actions give us the ability to decline money-losing loads and loads that are only slightly profitable.
When other contractors take money-losing loads, that sits just fine with me. It takes the pressure off us to take the load and hastens the speed at which the other contractors will wash out of the business, thereby giving us a long-term competitive advantage.
The economic slowdown will not last forever. When the turnaround comes, we will be well positioned to profit handsomely from the truck shortage that will then exist. In the meantime, we are making money at a slower rate than we did in previous years, keeping our heads well above water, and making productive use of the spare time that you get when you decline unprofitable loads.
Sure, there are many things going on "out there" that affect our business. They include a recession, a decline in available freight, rising costs, an oversupply of trucks, carrier policy changes and other such things. We have no control over any of those and none of those care or even know what we believe our own best interests to be.
To serve our own best interests, we focus on things we can control, such as knowing our costs per mile, knowing what we seek to accomplish by being in the business, knowing the price point at which we can profitably move freight, and managing our money in a way that helps us achieve the financial and lifestyle goals we set.
Also in our control is the way we perceive and describe the business and our role in it. In that, we see ourselves as good competitors seeking to achieve our goals. We are not good warriors seeking to defeat a non-specific enemy.
If Diane and I operated in the environment Humble2drive described, we probably would not be profitable either.
While we are FedEx Custom Critical contractors and operate under the same new dispatch system Humble2drive does, we are profitable. The difference is not in the system itself, but in how we view the system. Perceptions determine your choices and your choices determine your profitability.
Success is not about your carrier acting on you. It is about you acting in your own best interests.
As independent contractors, we are in business to serve our own best interests first. While it is true that our own best interests are realized by serving our customer's best interests, that is true only to a point. When our customers (or carrier, if you wish to look at it that way) seek to hire our services at rates that are unprofitable, Diane and I make our services unavailable.
To be available to serve our customers' best interests, we must be profitable enough to stay in business. That means running at more than breakeven rates. It means running at a meaningful PROFIT. It means making enough money to do what we do now, instead of doing something else.
Humble2drive describes a system in which we are players in a battle against cheap freight. In our view (perception, the way we describe the system), our carrier choice and load acceptance decisions have nothing to do with such a battle.
When making load acceptance decisions under the new dispatch system, we do it exactly the same as we did under the old. If we changed carriers (no plans to do so), we would accept loads exactly the same as we do now. And if we got our own authority or got with a carrier where we could bid our own loads, our bids would be no different than they are today.
We know, to the penny, how much it costs to operate our truck. We know, to the penny, what kind of a profit margin we require to remain in the business. In these numbers, everything is included to get to an accurate profitability picture. We don't play funny-money accounting games like overlooking depreciation (replacement cost) of the truck. We don't pretend we are profitable because we made enough to cover this month's truck payment and buy a new chair for the house. We include expenses that are easily overlooked like the cost of shoe polish for our steel-toed shoes and the cost of the shoes. We know our numbers, because without them you cannot know if you are profitable or not.
To determine your numbers, you do not need to be a warrior in a larger battle to fend off cheap freight. You need to fend off the temptation to watch TV and instead sit down with a pencil and paper (or spreadsheet) and figure them out. Placing yourself in the middle of some grand morality play or seeing yourself as a victim of larger forces (the perception thing again) does absolutely nothing to help you know how much it costs you to run your truck.
Once you know your numbers, you know what is profitable and what is not. And with that, you can very clearly zero in on serving your own best interests when choosing loads, your carrier or other career path.
There is of course more to the story; namely the other trucks you compete against. With our carrier, there is competition among trucks. That was true under the old dispatch system. It is true under the new. So what? Is there anyplace in the industry where there is not competition among trucks?
Wherever you are, and whatever method(s) you use to get freight on your truck, there is always competition among trucks. That competition makes it important to manage your business well. It means choosing your niche in the industry, marketing yourself as worthy of your customer's business, knowing your costs and setting a price point that means profits for you.
That's all fine and good, you may say, but what about in a severe recession like the one we are in, when rates fall and the number of trucks willing to still haul freight grow? What of your precious price point then?
I have two answers to that. First, if the freight don't pay, we don't play. Second, when freight is not as abundant as it used to be and rates are falling, it is not an external battle to fend off cheap freight, it is an internal battle to become a better competitor than others. This is also true in good times, but the bad times are less forgiving of weak competitors.
Regarding cheap freight. Cheap is a relative term. What may be cheap to one contractor may be lucrative to another. Diane and I don't think about cheap freight. We think about profitable freight. If the load don't pay, we don't play. That is not about the industry or what other people are willing to haul freight for, it is about us acting in our own best interests.
It comes back to perception. We do not see ourselves as warriors in a battle against cheap freight (though our behavior would win high praise from people who do see themselves as warriors in such a battle). We see ourselves as independent contractors operating to serve our own best interests.
At present, and as has been the case for the last 5.5 years, our own best interests are best served by contracting with FedEx Custom Critical. That has been true in good times and bad. It has been true under the old dispatch system and new.
This is not an idle statement. We have checked other opportunities in detail, but keep coming back to the same conclusion. As contractors seeking to accomplish the precise business, financial and lifestyle goals we have set, FedEx Custom Critical has been and continues to be the best place for us.
The day that changes will be the day we change carriers, change the way we put freight on the truck, or maybe even change our minds about running an expedite business at all. I do not see any such changes coming anytime soon.
From the day we entered the business, we sought to be good competitors. Knowing that slow times were likely to come (experienced expediters told us so over and over again), we prepared by becoming debt free, cutting our living expenses to a fraction of what most people have, and building financial reserves.
That gives us the ability to sit for months at a time if we had to. But the freight has not stopped, it has slowed. So we are not sitting for months at a time and do not expect to.
More important than giving us the ability to sit for months at a time, our good-competitor actions give us the ability to decline money-losing loads and loads that are only slightly profitable.
When other contractors take money-losing loads, that sits just fine with me. It takes the pressure off us to take the load and hastens the speed at which the other contractors will wash out of the business, thereby giving us a long-term competitive advantage.
The economic slowdown will not last forever. When the turnaround comes, we will be well positioned to profit handsomely from the truck shortage that will then exist. In the meantime, we are making money at a slower rate than we did in previous years, keeping our heads well above water, and making productive use of the spare time that you get when you decline unprofitable loads.
Sure, there are many things going on "out there" that affect our business. They include a recession, a decline in available freight, rising costs, an oversupply of trucks, carrier policy changes and other such things. We have no control over any of those and none of those care or even know what we believe our own best interests to be.
To serve our own best interests, we focus on things we can control, such as knowing our costs per mile, knowing what we seek to accomplish by being in the business, knowing the price point at which we can profitably move freight, and managing our money in a way that helps us achieve the financial and lifestyle goals we set.
Also in our control is the way we perceive and describe the business and our role in it. In that, we see ourselves as good competitors seeking to achieve our goals. We are not good warriors seeking to defeat a non-specific enemy.
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easyrider2697
Expert Expediter
simple...have the broker re-fax the rate confirmation sheet with the extra added, but of course they will get 15% out of that too...Backhauls are not meant to be a means of life out here, we are given the ability to do them, to keep us moving when we feel the need to relocate and try to make a profit off it, or to get us to a specific area when we need to be there and to cut down on excessive deadhead.
This is an area that will continue to be discussed over and over, I do it often and do it very lucrutive when I do it, but it does take time to learn what you doing and it takes time searching many areas for the load, I have spent hours looking for a load just to have it pop in at 5 min till closing time for the old backhaul dept..no need to worry about that now...we can book them 24/7!!..Matter of fact I am looking now as I type this, so good luck to those that want to sit for days upon end just to get that lowball load offer, by then time you get it I will have already completed 2 more loads by then., so tell me do you want to sit and make a little money or run, stay busy and make more money? any more questions...read my tag line!
Phil...I don't disagree with your case example at all.....BUT there are a lot out there not so comfortable in their situation....you are fine with just sitting and waiting for your load at your price...but others can't do that....it would be better if the Feds were to release these O/O/s to broker their own loads while this slowdown exists....it would help stop some from going belly up and maintain the fleet.....from a company view point....your point is let them go bust and I'll make a killing later as the fleet is reduced...
I'm not meaning to cause problems here, just trying to understand. So let me get this straight.
You pay for a load board, say getloaded for conversation's sake. You see a load you can do, you call the broker, you negotiate a price.. so you negotiate a price for the load itself, as well as detention pay and hand unloading? Then you call E1, give them the details, and they take over from there, with the rate confirmation, paperwork, billing, etc.
E1 says you'll get 85% of the load itself, but only 64% of any other charges, such as waiting time or hand bombing?
easyrider2697
Expert Expediter
I cant speak for E-1 but at Panther, all they get is the 15% of the rate confirmation sheet, if d-time of any other assc. is added they get 15% of that too.. Panther pays for getloaded(hard to get on there now, since the changes at getloaded), but all in all you have it correct by Panthers program.
Yep.. that's the Fedex I know, all to well. I'm glad if the "Fred Smith" system works for you guys and I hope/pray that it continues to work for you but at the end of the day your "partnership" is one sided in favor of Fedex and believe me they will show their true colors.
I do not care if you've been with them 5 minutes or 5 years if you make the mistake of TRUSTING them with your business or as your business partner you will end up losing. There's No grey area here.
Blessings,
dave
Yes, I'm getting that Panther is straight forward.. E1, not so much, still confused.
I would have no problem if our carrier allowed contractors to broker their own loads. My notion of limiting ourselves to profitable freight today and make a killing later extends industry wide. It is not held with a single carrier in mind. It does not matter what carrier a competing truck is with. The industry itself will rebalance the ratio of available trucks to available freight.
I would be curious to know something. Maybe you can help. Say our carrier opened the gates and allowed us to broker our own freight in return for a 15% fee to the carrier. How exactly does that help us? Is there some secret supply of profitable freight out there that can only be had if you broker your own loads? Is there a group of underground expediters out there that are laughing all the way to the bank because they have access to high-paying freight that others cannot haul?
In other words, what exactly is the nature of this self-brokered freight? How much exactly does it pay, and how available is it?
Say I became masterful in brokering my own loads; meaning that instead of relying on load boards only, I develop working relationships with a network of brokers and shippers (pretty good at networking here). Could I expect them to put high-paying freight on my truck before they compare my price to other people's prices, because I happen to be well networked and better than others at brokering loads?
I have seen claims made about how much better off people can be for brokering their own loads, yet they stay with a carrier instead of going for their own authority where they would not only broker their own loads all the time, but keep the carriers cut for themselves.
What's up with that?
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I'm all for additional tools. I'm not saying self-brokered loads are bad. I'm just questioning the claims that they are so very good. Where's the beef? If they are so good, why isn't everyone flocking to carriers where self-brokered loads are an option? If they are so good, why are people leaving those carriers to join others where self-brokered loads are not an option?
jaminjim
Veteran Expediter
Phil you already know the answers to a lot of those questions. Some are to lazy, some aren't equipped to do it, some are afraid, and some can't/won't present a professional appearance. The reasons are many, but the ability to broker your own loads when needed is invaluable.
Can you give us an example? There are those on the forum who present brokering your own loads as the solution. But before new people decide to get into the business on the assumption that self-brokered freight is available and invaluable, it would be a service to them (and to me, maybe I am missing something here) if you and others explained exactly what "invaluable" means.
If you did not have the ability to broker your own loads, how would your buisiness be different?
For the benefit of new readers (and some not-so-new readers who are open to new opportunities), can you share how often to you broker your own loads and why do you do it?
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I would like to know why, yes. Was the money good enough to make it worth it to do for the money alone? Was it to keep a fleet driver from quitting because he or she could not stand sitting? Was it to relocate a truck to a better area?
For those of us considering the ability to broker your own loads, some of the reasons may be important and others may not. A one-truck owner-operator like me does not have to worry about a restless fleet driver. What may be invaluable to you could be meaningless to me.
So, yes, and if you don't mind, I would like to know why you brokered the loads you did.
Please understand that while I may come across as harsh in questioning the value of self-brokered loads, it is more about getting to the bottom of it where good research can be done and good decisions can be made.
We had a profitable January. February is off to an OK start. But there is no end to the recession in sight. My challenges to the claims made about brokering your own loads spring from a desire to know more. And by knowing more, I mean specifics.
Can you provide some context for the numbers you provided above? The two or three brokered loads a week you mentioned, how many trucks were in the fleet and how many runs a week did the carrier provide?
In other words, did you broker 1% of your loads a week? 5%? 50%? And when you did broker a load, why did you do it?
Ok, I'll bite..
The way I see it, is if you're with a large carrier who has lots of freight opportunities available at a fair price, AND they will also allow you to broker some of your own loads, only taking a 15% 'commission' or 'service' fee', or whatever you want to name it, it is the best of both worlds.
It isn't that the loads are necessarily high paying, or higher paying, altho they can be, it's more that it gives you more options. For example, many complain they are sitting for days.. it gives them an opportunity to do something about it, should they want to. Many complain of high deadhead miles after delivering to a poor freight area.. it gives them an opportunity to get some or all or more, of their deadhead costs covered by getting a skid or two or three coming out, or along the way to a better area. Many complain their large carrier has too many trucks signed on for the number of loads available these days.. it gives them an opportunity to do something proactive for themselves (give themselves a beep before your turn in the carrier's lineup). If someone wanted to head 'home' or in a certain direction, it would allow the opportunity to try to get the costs, or more, covered.
Another perhaps important point this option may allow, is what an OO may be more free to do with his truck. For example, as I understand it, some carriers have very black and white, written in stone, parameters of which truck can do which load, ie, say an OO has a 'C' sized box, but can actually take a 'D' weighted load. Or it might not even be written in stone, but might be too difficult for the dispatchers at a large carrier to keep the details of any given trucks straight, if they differ from the *norm*. Their carrier may have that truck pegged to only receive 'C' load offers. However, on the occasion the OO may want to book his own load, he might be free to take a shipment which his truck would easily take, but not be offered by his own carrier.
The rates will vary, depending on location of pickup/delivery, how many others are available too, which broker, what you're carrying, which options you can offer, size of load, how fast you're able to call, how good you are at negotiating, how well you know the pricing to be competitive, how many shipments you're going to put on, how professional you are, etc.
Depending on what exacty that 15% includes, it could be well worth it. As an independent, if I had a service who would deal with all the paperwork, pay me up front (before the shipper actually paid the bill), allow me to operate under their reduced group insurance rates, and their authorities, maybe get some other perks in there too, I'd be interested in hearing about it. That said, it's also worth money to have someone finding you loads, hence the even higher percentage usually kept by carriers. To have both options can only be a good thing, in my mind.
It's not all fun and games and great paying freight, being independent, however it can be extremely rewarding. The freight available to me as a tiny little guy isn't going to be the same as the freight available to a big name carrier who spends thousands on advertising and has a reputation built on years of service. To me, it's like working together for the benefit of both. Both because I can get myself loaded if I want to, and the carrier can keep one more OO content while making a little money.
I think many people wouldn't have a clue how to go about doing this, and even if they did, they may not have the desire to be bothered, the assertiveness, the stomach for it, the perseverance, whatever. Some are happy without this option, some would rather accept their lot in life as it stands, some would like to put up with it while still complaining, and others may be at a disadvantage for one reason or another. Others enjoy having more of a say in their business, while not necessarily wanting to, or being ready to, or have the financial resources, to make a go of it all on their own.
As for you specifically ATeam, from what I understand, you would probably do particularly well at it because you have many options to offer (weight capacity? liftgate? hand truck? reefer? heat? hazmat? experience? etc?), you're obviously well spoken, intelligent and know how to talk to people, you have a team available, you know your costs and seem to have a good handle on math skills, you seem competitive and amibitious (don't take that as a negative), you know your way around the country already, etc.
I think there are probably many who do this, while perhaps also still being signed on with a carrier, who we don't necessarily hear from on here. I also think it's probably not as much of an option for a newbie to the industry, to begin an expediting career as well as brokering their own loads right off the bat. Experience is worth a lot.