Saying "no" to cheap freight!!

[davekc]

Good to hear from you Tom. One of my frustrations on this is the government wants to raise insurance minimums up to three million. Of course it is a bonus more or less for lawyers to chase truck accidents. I really wish instead of that, they pursue carriers/operators that run around underinsured or have virtually no coverage at all.

 

[crich]

how much money do you really think running under insured saves a guy?
to have the correct insurance cost me around 9k per year for one truck and trailer
now if I run a truck 100,000 miles per year that is only .09 per mile.
that's for the carrier side of me 1,000,000 general liability on my company and rented or owned property. 1 mill in auto liability and 200k cargo med payments comp and collision on a truck and trailer owned rented or hired with an unlimited mileage radius.

so even if a carrier was running un insured how can a .09 cent difference in the cost really be used as an argument that they can drive freight rates down to unsustainable levels? please explain. I think it has more to do with multi million dollar office buildings and huge staffs that the big boys have to pay for that keeps rates that are paid to the owner operators down. I truely believe everytime your carrier cuts rates to the owner ops they just want to put more money in the carriers pockets. I am very small and insurance is the least of my headaches. the large carriers operate on other peoples money have loan payments that cost them interest.they need to make huge profits off the backs and asses of others.

now on the farmer side of me if I do away with general liabilty and cargo and just keep comp collision and auto liability in the amount of 1 mill it cost me $985 a year but thats only hauling my my own stuff. so the way I see it you have to have a federal filing of insurance to mantain your authority or it would go inactive after 30 days. so I see no way that a carrier could run for any reputable broker or 3pl or shipper that does any type of checking at all for more than 30 days.

 

[OntarioVanMan]

how much money do you really think running under insured saves a guy?
to have the correct insurance cost me around 9k per year for one truck and trailer
now if I run a truck 100,000 miles per year that is only .09 per mile.
that's for the carrier side of me 1,000,000 general liability on my company and rented or owned property. 1 mill in auto liability and 200k cargo med payments comp and collision on a truck and trailer owned rented or hired with an unlimited mileage radius.

so even if a carrier was running un insured how can a .09 cent difference in the cost really be used as an argument that they can drive freight rates down to unsustainable levels? please explain. I think it has more to do with multi million dollar office buildings and huge staffs that the big boys have to pay for that keeps rates that are paid to the owner operators down. I truely believe everytime your carrier cuts rates to the owner ops they just want to put more money in the carriers pockets. I am very small and insurance is the least of my headaches. the large carriers operate on other peoples money have loan payments that cost them interest.they need to make huge profits off the backs and asses of others.

now on the farmer side of me if I do away with general liabilty and cargo and just keep comp collision and auto liability in the amount of 1 mill it cost me $985 a year but thats only hauling my my own stuff. so the way I see it you have to have a federal filing of insurance to mantain your authority or it would go inactive after 30 days. so I see no way that a carrier could run for any reputable broker or 3pl or shipper that does any type of checking at all for more than 30 days.

for a CV that .09 is huge.... On your same 100,000 miles that equates to $9,000 I don't know how that translates in the tractor world but here at the bottom or the beginning of the alphabet "b" it is a lot.

 

[bobbyloads]

It's just nuts out here, we just spent 8 hours trying to cover a Charlotte,NC truck and we got like $1.2/mile to Indianapolis... The problem is all the brokers claiming they have trucks and lie to customers and take all the freight and sell it to carriers for cheap.... On top of everything they brokers are quick not to pay and cut rates then they get mad when people consolidate freight or try other ways to make a buck.... When hot season comes they moan and cry why are we raping them on prices???? For those that are fortunate to experience the rape season and don't go out of business in between them def take advantage but you have to. I've been in business for about 3 years now and had many ups and downs and am realizing the money is in being a broker, even big trucking companies with out brokerages that have 50 plus trucks are probably living off loans right now because if you don't have a lot of steady customers you are screwed at this present time. Basically right now either park your trucks or say yes to cheap freight until the market gets better and hope you make it. The fuel prices also made the rates take a big hit, and the brokers think fuel is cheap rates need to be even cheaper its crazy. China and their economy falling is not gonna help anything in the near future anyway. Luckily I found a way to do logistics and be able to make a decent profit where I do not need that many trucks to survive but for all those people out there trying to make it the right way with a lot of trucks I feel bad for. But it's been about 2-3 years since the market had a longer period of staying good there has to be a wave of money coming again soon, my guess is march after a lot of people go out of business when its time to renew plates.

 

[rollincoal]

I don't think the pain has been going on long enough to wipe out much of anyone. IRP renewal differs from state to state depending on when a person first started it. I do mine every September. What will wipe out a lot of the weaker players is a prolonged spike in fuel prices. Let's say something bad happens with Iran and it rises an extra $1 a gallon next week overnight staying there for half a year or longer. Coupled with a glut of trucks, lack of freight, and low rates that don't go up. That is what will correct the oversupply of trucks quickly. The pain needs to go on longer and it needs to get more expensive to operate. Hate to say that cause it's no fun for anyone but it's true.

 

[bobbyloads]

Fuel prices going up will make the rates go up, when fuel was at $4 a gallon I was making a killing with what I do, in Illinois plates are about $1800 for over the road , a company that has been doing 1 pick and 1 drop for the last year with these crappy rates and barely making a profit and say they have a fleet of 20 trucks that's $36,000 for plates in March. Every year at that time a lot of companies go out of business due to that and right after March is when the market always gets a little better, this year I know for sure the # of companies that will go under is gonna be pretty significant. The "pain" has been going on for about 3 years now, that's a pretty long time I have not seen trucks average $2.3 a mile in a long time it use to be automatic now for a long time it's been really bad.

 

[OntarioVanMan]

higher fuel prices are not the answer...we SHOULD be able to operate at par....no FSC....thats the way it should be...we used to be able to operate with NO FSC....

 

[Opel2010]

higher fuel prices are not the answer...we SHOULD be able to operate at par....no FSC....thats the way it should be...we used to be able to operate with NO FSC....

Have y'all ever thought how much the carriers are chopping our paychecks? There shouldn't be any charges, we hate them, yet no one dares to oppose them. They're already are making money for the runs we're doing for them, and we're using our trucks, not theirs. They want us to have installed in our trucks a QC? They should pay for it. They want us to carry their logo? They should pay us for doing advertising for them, not to be charged for decals, installation, uninstall and so on. OK, my basket is ready, you can start throwing tomatoes...

 

[Moot]

higher fuel prices are not the answer...we SHOULD be able to operate at par....no FSC....thats the way it should be...we used to be able to operate with NO FSC....

There was no FSC back then because fuel prices were relatively stable. FSCs were put into place because of the rapid fluctuation of the price of fuel. Instead of changing their published tariffs hourly, carriers implemented the fuel surcharge. FSCs allow carriers and O/Os to operate at par (a set fuel price).

 

[OntarioVanMan]

There was no FSC back then because fuel prices were relatively stable. FSCs were put into place because of the rapid fluctuation of the price of fuel. Instead of changing their published tariffs hourly, carriers implemented the fuel surcharge. FSCs allow carriers and O/Os to operate at par (a set fuel price).

Yes at par to what 2002 Fuel levels?

 

[Moot]

Yes at par to what 2002 Fuel levels?

Somewhere around that time. It depended on the carrier as when they implemented a FSC. I worked in the LTL in the 1980s an 1990s. Sometime in the 90's the company I was with implemented a fuel surcharge. On every delivery receipt an FSC was added. It varied with particular customers and of course the price of fuel.

When I got into expediting in 1997 the carrier I was with had no FSC. It was probably at least 4 or 5 years before they put one in place. During that time they did increase their rates once.

 

[akkshole]

FSC is added after fuel prices goes over $1.50 per gallon...how far over is how the percentage is determined. When fuel prices started rising, originally there was no FSC in effect, and then once it was OOIDA fought hard for years to make it LAW that every bit of FSC went to the person paying for fuel, but alas it never was passed. One of the reasons in the early years people went out of business...was not passed on, was kept by brokers or carriers.

 

[Grizzly]

Some years ago I posted with regularity on EO. My post were based on my many years of experience in the industry and meant to present a realistic view of our chosen profession. At that time, there were very few Carrier/Owners participating. I have continued to browse the site from time to time to evaluate the topics of discussion. It appears that several of my peers are now involved from time to time and I decided tonight to weigh in once again.

Mike Pettrey, Steve Barrett, John Elliott, John Mueller and their companies are all members of TEANA, an organization that promotes ethical practices and professional attitudes within our industry. Their are many other members of TEANA and those members (for the most part) share many common beliefs. Mike posted regarding a topic that has had much discussion within the TEANA organization, and furthermore gave the members of this forum one of the reasons that many of our lesser known competitors are able to handle the "cheap" freight. Any O/O forum members that drive for these companies know that the costs of insurance is one of their highest expenses, because these companies require each and everyone of their O/O vehicles to provide a minimum of 1M 100K in coverage.

A recent rash of accidents and cargo claims by Carriers allowing O/O to operate without proper insurance coverages and falsifying insurance coverage for vehicles operating in their fleets have given those Carriers and their CUSTOMERS more headaches than anyone would want. Furthermore Broker's interested in maximizing profits who fail to vet the carriers insurance CAN BE held responsible for a portion or all of the loses the carriers insurance does not cover.

TEANA is promoting a service provided by Shelly and John Benisch ( owners of CIS Insurance) that verifies proper insurance coverage on ALL vehicles listed ( whether O/O vehicles or company vehicles) with each member carrier.
VOI - stands for Verification of Insurance and is granted to those TEANA members who are properly and legally insuring each and every vehicle in their fleet. VOI is also granted to Brokers whose insurance is vetted by CIS.

If the company you are associated with, requires less than 1M 100K for your insurance coverage of your personally owned equipment, your company cannot attain VOI certification.

That of course does not mean that your company is participating in the hauling of cheap freight, however I can assure you that those companies that do have the VOI certification are NOT hauling cheap freight.

Cheap freight is not only the product of 'fly by night" Carriers but perpetuated by less than professional Brokers who attempt to cover loads by any Carrier bidding the lowest price.



So...
t-hawk...
that's what I can teach you about cheap freight

(hello to many of my old friends at EO...on this thread daveKC, OVM and others!)

Tom Robertson
A. Blair Enterprises
TEANA - VOI

I'm very thankful to all for taking the time to share their thoughts on this important issue.
I have a simple question. Somehow I suspect there isn't a simple answer ...
Why doesn't TEANA require VOI certification from ALL it's members??

 

[OntarioVanMan]

I'm very thankful to all for taking the time to share their thoughts on this important issue.
I have a simple question. Somehow I suspect there isn't a simple answer ...
Why doesn't TEANA require VOI certification from ALL it's members??

John Elliott said in another post on here...VOI is not a reliable program..still operators slipping thru the cracks...gee what a surprise? eh....

 

[OntarioVanMan]

I was thinking.....

amazing even in the way this industry is today still more new carriers popping up creating even more
People
In
Management
Positions

They proceed to throw new HO's out on every street corner to pick off that stray John/load....

IMO....

 

[Grizzly]

John Elliott said in another post on here...VOI is not a reliable program..still operators slipping thru the cracks...gee what a surprise? eh....

I didn't see the post. I'll look for it ... thanks.
But that being said, things are relative. Is it possible to gauge how effective it is? Are operators slipping through cracks, or are the flood gates open? We operate in an environment of marginal differences. Isn't 90% effective better than 0%?
Is it worth it for TEANA to pursue this? Do all the members have that desire? Are there different interests?

 

[OntarioVanMan]

I didn't see the post. I'll look for it ... thanks.
But that being said, things are relative. Is it possible to gauge how effective it is? Are operators slipping through cracks, or are the flood gates open? We operate in an environment of marginal differences. Isn't 90% effective better than 0%?
Is it worth it for TEANA to pursue this? Do all the members have that desire? Are there different interests?

Its that you can not control the sub groups that buy loads off the approved lists...someone would have to bear the cost to police the approved list that sub contracting is only to approved carriers....
The trucking industry has always had a dishonest reputation...some carriers and brokers have no operating morals at all....its all about the $$$$$$$

 

[Grizzly]

Its that you can not control the sub groups that buy loads off the approved lists...someone would have to bear the cost to police the approved list that sub contracting is only to approved carriers....
The trucking industry has always had a dishonest reputation...some carriers and brokers have no operating morals at all....its all about the $$$$$$$

Understood. But my question was regarding current, approved TEANA members. I'm looking at the current member list now. Is it possible to at least confine my question to that list? A few of them have posted comments on this thread, if possible I'd like to hear their opinions.

OVM, I get your view ... everyone is either a pimp or a 'ho ... the industry is doomed ... there's no hope .... I get it ...

 

[jelliott]

Requiring VOI to be a member was talked about but legal council had concerns with it. As well the "hope" of the organization was to help educate members on risks and better understand the reasons for proper compliance. In my opinion that challenge only grew. Members and non members took that information and used it to try and find more loopholes, smoke and mirrors, fakes and everything in between to falsify full coverage. We even saw agents "turning a blind eye" to activity they simply had to have known that was taking place. Simply sad the level of fraud and how much money it is truly costing the owner operators in this industry. It isn't 8 or 9 cents a mile as some would think. That is the hard up front number. But it goes way deeper than that.

Fully insured traditional carriers have to put large down payments at renewal time and they have to meet financial review for insurance finance policies. How many of today's carriers that put the insurance on the owner operator would not be able to meet this criteria and be gone or they would be much smaller and grow at a more controlled pace? How does that effect the market of supply and demand and rates?

 

[bobbyloads]

Great story buddy, wasted your time typing I don't care what certification you have, just cause I get you certification I will not get better freight. Better freight is made by networking and making things happen, and it's the big companies that are allowing this cheap ass freight to happen.... And these customers make claims left and right when they are unjust and the carrier has the right to deny any claim and it becomes civil... This whole industry is messed up and I love it makes my day interesting and joining your group does not help with nothing. Cheap freight will continue to exist as long and these big companies like Schneider and others that insure them selves and save money stop taking these cheap loads and balance the market out again.