Reality Check # ?

ericmoss37 · Jan 17, 2009

How much is it going to cost you if you lose a driver and you have a truck sit for a week or two trying to get drivers into orientation? The class costs about $180 dollars plus hotel room. Not running for two weeks costs $2000 dollars plus a mobile mechanic to get your truck started. The way I look at is this. If they get one offer at $1.15 a mile for a 1000 mile and then one offer at $1.55 a mile which is the normal rate for my units. I am really getting a $1.35 a mile. It keeps the cashflow comming in and drivers moving. Drivers not moving= no pay for either of us and unhappy drivers that have been sitting for days and running out of money. Don't forget the driver pay goes down on that $1.15 a mile and often it has a decent fuel supplement. I've been able to get some broker loads for about $1.35 a mile with no fuel supplement so I figure .20 cents a mile for fuel into that.

That being said you can take a whole different perspective if your a owner/opperator and you only have to think about yourself. Hell if you have ran good for the past five years be my guest and wait for your rate.

nightcreacher · Jan 17, 2009

Its not so much waiting for your rate.there is a minimum that you cant go under,or your just losing money while your truck is running.If your truck runs,and ony brings in enough to pay for the fuel and driver,where does that put you,as the owner?

pelicn · Jan 17, 2009

nightcreacher said:
Its not so much waiting for your rate.there is a minimum that you cant go under,or your just losing money while your truck is running.If your truck runs,and ony brings in enough to pay for the fuel and driver,where does that put you,as the owner?

Exactly! For those of us that run for an owner we also have to think about him/her. We have set up a spreadsheet that shows fixed truck expenses, our pay, etc. When a load offer comes across we plug the numbers into the spreadsheet before we accept the run. The numbers don't lie. There is no sense in taking a run that you'll lose money on, and if the owner doesn't make something as well, how long do you think that job will last?
No one likes sitting, money isn't made doing that, but if you run at a loss you're only chasing your tail until you're completely dizzy and fall over.

simon says · Jan 17, 2009

Exactly: I accepted a load quickly- in the midst of all the fleet messages about the new rates. Lo and behold, when I read it all through, and mind you, I was sitting 18 miles away, it was .90c for an NLM going 500 miles to Louisville, and delivered Tuesday. I would have done it anyway, but come on, we are now glorified LTL haulers warehousing someone's freight for about $1.01 mile with the fuel.
I had to fall off it due to fuel gelling, but this is what NLM has come to. And: it all started back when these regionally based outfits that were trying to bring guys back to their tiny zone, started the spot bidding.
For most of us, this is uncharted territory, the economy is stuck in HOLD mold as banks refuse to lend, and shippers know they will pay only bottom dollar to the bottom feeders that will take it...Dave is right: we are being driven down to the level where hard facts say most will be bankrupt sooner than later...That is the reality...

aristotle · Jan 17, 2009

Can you imagine having a large truck payment in this environment?

OntarioVanMan · Jan 17, 2009

Guess when the shippers bleed the straights dry..they'll have to use cargo vans....oh wait....Ban the van...

highway star · Jan 17, 2009

Good post, Mr. KC.

nightcreacher · Jan 17, 2009

simonsays said:
Exactly: I accepted a load quickly- in the midst of all the fleet messages about the new rates. Lo and behold, when I read it all through, and mind you, I was sitting 18 miles away, it was .90c for an NLM going 500 miles to Louisville, and delivered Tuesday. I would have done it anyway, but come on, we are now glorified LTL haulers warehousing someone's freight for about $1.01 mile with the fuel.
I had to fall off it due to fuel gelling, but this is what NLM has come to. And: it all started back when these regionally based outfits that were trying to bring guys back to their tiny zone, started the spot bidding.
For most of us, this is uncharted territory, the economy is stuck in HOLD mold as banks refuse to lend, and shippers know they will pay only bottom dollar to the bottom feeders that will take it...Dave is right: we are being driven down to the level where hard facts say most will be bankrupt sooner than later...That is the reality...

you must be in a van,NLM loads have always been cheap,they are the brokers for most of the auto industry,and have been for years.

are12 · Jan 18, 2009

ericmoss37 said:
How much is it going to cost you if you lose a driver and you have a truck sit for a week or two trying to get drivers into orientation? The class costs about $180 dollars plus hotel room. Not running for two weeks costs $2000 dollars plus a mobile mechanic to get your truck started. The way I look at is this. If they get one offer at $1.15 a mile for a 1000 mile and then one offer at $1.55 a mile which is the normal rate for my units. I am really getting a $1.35 a mile. It keeps the cash flow coming in and drivers moving. Drivers not moving= no pay for either of us and unhappy drivers that have been sitting for days and running out of money. Don't forget the driver pay goes down on that $1.15 a mile and often it has a decent fuel supplement. I've been able to get some broker loads for about $1.35 a mile with no fuel supplement so I figure .20 cents a mile for fuel into that.

That being said you can take a whole different perspective if your a owner/operator and you only have to think about yourself. Hell if you have ran good for the past five years be my guest and wait for your rate.

Eric,

This is where we have a difference of opinion.

From the way your post reads, you feel a fleet owner has it tougher in this business (since you have more than just yourself to think about), where I feel the owner/operator has it tougher.

What do you think would happen to a single truck owner, running team, if one of them got sick and had to be off the truck for awhile? If it is a short illness and the team is off for a week or two, they have no money coming in. Where, if you are a fleet owner, you still have money coming in - just less money. And if the truck is sitting (especially if it were paid for) how high are the expenses??

If the single truck owner is not lucky enough to be sick at home and needs to pay for hotel expenses, medication and whatever else is needed, that only adds more expenses on top of the truck expenses and no pay.

As a single truck owner, if it is a lengthy illness, there are a lot of decisions that need to be made and quickly - since this is your sole income. In this case, a fleet owner still has money coming in to support himself and his family.

O/O's not moving, makes for very unhappy business owners, since they are trying to support truck expenses and household expenses too. As a single truck owner, using your example on the 2 loads above, we would take them - of course, the full rate would not be at $1.55 if we were still with the same company.

So you see, if you look at from the O/O's perspective, you can come up with a very different outlook.

By the way Dave, great post!!

nightcreacher · Jan 18, 2009

this being owner and what you just said about being sick has taken its toll on me.Last year was sick with the flu for a week while on the road,in a motel,then I was off for six weeks for eye surgery,now except for 1 week running solo,as co driver is sick,been home since christmas.Money is really tight,but wont take long to catch the bills back up,oh ya,and Dave this is a great post,one of your best

davekc · Jan 18, 2009

simonsays said:
Exactly: I accepted a load quickly- in the midst of all the fleet messages about the new rates. Lo and behold, when I read it all through, and mind you, I was sitting 18 miles away, it was .90c for an NLM going 500 miles to Louisville, and delivered Tuesday. I would have done it anyway, but come on, we are now glorified LTL haulers warehousing someone's freight for about $1.01 mile with the fuel.
I had to fall off it due to fuel gelling, but this is what NLM has come to. And: it all started back when these regionally based outfits that were trying to bring guys back to their tiny zone, started the spot bidding.
For most of us, this is uncharted territory, the economy is stuck in HOLD mold as banks refuse to lend, and shippers know they will pay only bottom dollar to the bottom feeders that will take it...Dave is right: we are being driven down to the level where hard facts say most will be bankrupt sooner than later...That is the reality...

I find it interesting that they would send you a message of reduced rates from 1.20 to 1.05 and then follow that with a load offer of .90 per mile. You indicated that it was a NLM load, but I am quessing maybe a van load? Either way, it really is a LTL load.
Either way, it can make sense to haul something cheaper for a variety of reasons. The bigger issue is the consistency in which one is doing it.
Is it being done to enhance a situation, or prolong existing misery?

As for fleet owner woes vs driver woes, that might be a good topic for another post.

bluejaybee · Jan 18, 2009

This thread goes right along with "Singing the Blues". We have all sang the blues in the past. Now we are beginning to feel what they actually mean. Times are getting harder . All of us are effected differently. Those who have their ducks in a row will be able to stand the test. Those who don't, may bobble in the waves. All of us need to watch the bottom line during these times.

simon says · Jan 18, 2009

Guess what- A 'D' unit: I almost could not believe my eyes. Additionally, we do not even do that much NLM- we certainly do not make a living from it. If that were the case, I would have jumped ship a long time ago...

davekc · Jan 18, 2009

Never say never, but if I was to haul something at .90 CPM on a straight, that exclusivity would go out the window.
One could easily find their own loads if that became anywhere close to a regularity.
The only time I could see that as a option is if it is the only thing taking you home, or you are trying to get out of a remote area.