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It's a Team's Life

Cheap Rates

By Linda Caffee
Posted Sep 17th 2018 9:59AM

What information are the drivers following to determine what rates should be out of each area of the country?  Who decides what rates should be for extra services or a specialized truck?  Remember the price of the truck, the sleeper, or what a driver is paid has nothing to do with the rate per mile.  I wonder if the person who asked this question has done any research at other companies to see what rates they are getting?

When I hear a comment about rates from another driver I wonder what they are basing the comment on?  Is it their wants, their needs, or what the market can bear?  All of us are enjoying high freight rates right now but in the back of our minds we know that this trend will not last.  For those that have not been trucking very long they consider these rates normal and are going to have to adjust their lifestyle to lower rates or get out of this business.

Entering trucking when rates are low gives us a base to build upwards on when rates rise and it is much harder to start with high rates and figure out how to go back down.  Remember to save when cash is flowing for the times when cash is scarce. 

Constantly demanding high rates, holding our companies over a barrel when a truck is needed, and refusing to move if the offered rate is not off of the charts hurts everyone including those that ask for that rate.  When a driver refuses to move day after day waiting for that perfect load they often end up losing money over the truck that accepted the load and has continued to run.  Each of us has what is considered “cheap freight” but we have to remember what is this based on?  Our costs or where the market is currently at? 

The competition out here is fierce and as long as a company has the trucks they will go after a competitor’s freight and the more specialized it is the more lucrative it can be for another company.   Customers are no different from us when shopping, they want the best price and the best quality possible, and more than one company can provide the service. 

Think about this scenario:

Buying gas for your car.  There are four gas stations in town and one is really nice, they pump the fuel for you, check your oil, the fuel attendant is clean, neat, courteous, this station is well lit and has the latest pumps and windshield cleaning supplies, but they are twenty cents a gallon higher, which place will you to?  Will you go to the higher priced fuel every time or will you buy the cheaper priced fuel, pump it yourself, check your oil, clean your windshield, and keep more money in your pocket?  Fuel is fuel and paying twenty cents more a gallon is for the amenities.  If the market could bare this type of facility there would be one on every street corner, there is not because the competition keeps the price in check. There isn’t anything worth more than someone is willing to pay or as little as someone is will to do it for. 

In the long run when we demand astronomical rates are we helping the competition to get a foothold in the door and take the freight we are currently hauling?

 

Bob & Linda Caffee

TeamCaffee

Saint Louis MO

Expediters since January 2005

linda.caffee8@gmail.com

 

Expediting isn't just trucking, it's a lifestyle;

Expediting isn't just a lifestyle, it's an adventure;

Expediting isn't just an adventure, it's a job;

Expediting isn't just a job, it's a business.

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