Issues Concerning O/O's and why we should sit home 4/1/8

[allan5oh]

I nominate GMAN's previous post for:

"Post of the year - 2008"

[Orangetxguy]

Gman Wrote: I prefer to compete on service. I will match the quality of service that I provide with anyone, regardless of size.

GMAN, I agree with what your doing, but I always wonder what defines a more quality service? Obviously, prompt and safe delivery of product, but I'm sure there are other things that an independent can do to set himself apart from the crowd. I would think that the shippers who are willing to pay a premium for their freight also very much expect this extra quality. No doubt, the JB's and Swift's have been there offering to cut the rates.

What are some of the things an independent can do to be sure they are providing the level of quality service that will make their customer "want" to do business with them, even if the rate may be a bit higher?

NOTE: Please understand this is in no way a wise-crack question, but genuine curiosity. I also understand that you may not want to divulge everything you know! LOL

One of the most important things any trucking company can do is to make certain that you keep your word. If you commit to make a pickup or delivery by a certain time, then you make sure to do it. About 2 months ago one of my trucks broke down in Fresno, CA. We were under a load and I wasn't sure what was wrong with the truck. I had already committed to another load. Rather than not deliver the load or cancel the other load that I had committed, I rented a truck at a cost of about $800/week to fulfill my commitment. The shipper and broker were both extremely happy. Neither could believe that I would rent a truck to fulfill my commitment to them. I was told later that any time I needed a load to let them know. I made little, if any money on these loads, but kept my word and in doing so, gained a substantial amount of goodwill. I will do anything that I can to keep my word. In this case, the problem wasn't my fault. However, I did make a commitment. I felt that it was important for me to keep my word. That is only one example of what I mean by providing extra service. If this had happened to one of the larger carriers, they would likely have either tried to reschedule the load or re-power to suite their schedule rather than that of the shipper. While the problem would have been understandable, sometimes shippers operate on a tight schedule. If the carrier doesn't deliver as expected, then it can cost the shipper time and money.

The larger the carrier the more difficult it is for them to keep all of their commitments. It is much easier for a smaller company to keep their commitments than it is for a company with 1,000+ units. The more people with whom you deal the more difficult it is to maintain control over your business.

Shippers and brokers will sometimes pay a premium for a carrier who is dependable. Most will not waste their time with those who are not reliable.

One thing that I NEVER do is cancel a load once I commit to it. There are some carriers and/or independents who will cancel a load if they find one that pays more. That is bad business. It isn't good for anyone. It is difficult to build a good reputation. It takes little to ruin it. I am not saying that if you cancel a load, once committed that you will ruin your reputation, but it is something that a shipper or broker is likely to remember. But they also remember those who provide excellent service. By providing good service you establish good will and when a really good load comes along, then you will be at the top of the list.

If you provide excellent service you can command a higher rate. If you provide mediocre service then you don't deserve the better rates.

That is the entire reason for quality service!



Ya nailed that one goooooood Mike!

[Orangetxguy]

Professor, if you will go over to the April 1 thread and read Gman's response. It explains exactly what I was trying to say. Maybe his fine written words will help you understand.

Gman's comments from the other thread:
Things are difficult, but when you are in business, you learn to make adjustments to changing conditions or go out of business. What you and so many others don't realize is that much of what is happening with these high fuel costs is related to the government becoming too involved in our business. Government is NEVER a solution to an economic situation. Most of the time they are actually the cause, either directly or indirectly. The government benefits directly when fuel prices go up. One other thing to keep in mind is that it was the GOVERNMENT who allowed the major oil companies to merge, thus reducing competition. It was the GOVERNMENT who prohibited the oil industry to drill in known rich oil fields, thus reducing our dependency on foreign sources. It was the GOVERNMENT who failed to put a comprehensive energy policy together. It was the GOVERNMENT who would not allow new refineries to be build, thus reducing our capacity to process more oil and possibly reduce prices. I could go on, but I think you see my point. Besides, I don't understand what you really want the government to do about fuel prices

While I respect Gman's opinion that government involvement has made matters worse, it still wouldn't change the global demand and the shrinking supply. And without trying to hijack this thread, government does and should have a role that speaks to a country's environmental well-being, not just its economic needs. What would be better for all of us - economically and environmentally - would be to reduce our dependence on oil.
So what can truckers do? To steal part of Twilight Flyer's message: reduce idling and slow down. You'll save money and reduce demand/dependence on foreign oil, while reducing the impact on the environment.
I suppose I should at least acknowledge that the handful of parked rigs that participated in the "strike" at least produced less nitrogen oxide for one day, so something good did come out it, however small that contribution may have been.

On the topic of government and the merger of our oil companies.
By allowing the merging of AMOCO and the purchase outright of ARCO, to British Petroleum, plus allowing the purchase of Quaker State Oil and Pennzoil by RoyalDutch Shell, the government effectively made foreign oil companies the largest holders of domestic oil reserves. In the "On Shore" lower 48 states, BP holds more "production acreage" than does Exxon, Chevron, or ConocoPhillips, individually. BP (majority holder of Permian Basin leases) is the largest producer of "West Texas" intermediate crude...which is the US benchmark crude. BP also has extensive holdings in Colorado, Utah, Wyoming, New Mexico (San Juan Basin) East Texas and Louisiana. In the Gulf of Mexico "Offshore", BP holds the largest blocks of "Ultra-deep Water" proved reserves, and is a shareholder in some of the blocks that have been proved on by Shell, BHP-Billiton, PDVSA, and Total. As with BP, all of those companies are "Foreign for profit" companies. All of them, plus several other foreign oil companies, have been winners of bids for "deep water" drilling rights.

Now....for areas that it is known that there are oil and natural gas deposits, but drilling is prohibited.... "Offshore" Florida...east and west coasts. Offshore Delaware, the entirety of the Puget Sound and "Offshore" the states of Washington and Oregon. In 1991 one estimate by ARCO, of proveable oil and gas reserves under Puget Sound were 55 to 85 billion barrels of oil and 300 trillion cubic feet of natural gas...none of it accessible, due to state and federal drilling prohibitions.

State and Federal environmental regulations are also the reason over 30 refineries have been idled and torn down nationwide. Oh Yeah...reducing refining capacity also had the effect of reducing product availability..there by driving up retail prices.

And..Professor...you being Canadian as you are....you don't really want the US reducuing it's oil imports all that much...we pay for a big portion of your medical benefits...what there are of them.

[Doghouse]

There are many things you can do as an independant to stand out among the rest. It's the same in any business.

1.Always be calm and retain control of the situation. I know there are times you want to reach through the phone,or choke somebody,..but don't show your anger,..remain calm at all times. After all is said and done,you can then decide if you want to work with the same people again.

2.Keep your equipment clean and repaired,..nobody wants to see their freight go on a truck with bald tires and dangling body parts.

3.Make sure you can commit to the load and run it legal, if you know you can't do it legal, walk away from the deal before you have any paperwork started.

4.Be ready to rent a truck in case of Gman's situation, plan it now and get preapproved by a truck rental company. You don't want to be sitting on the side of the road when Penske says,...your credit sucks and you can't rent one of our trucks.

5.Create a professional mailer and staple your business card to the inside then send it to some shippers you are interested in hauling for. Send it every two weeks to the shipping dept. and follow up with a phone call to make sure they have your info on file. You would be surprised about how often shippers get fed up with carriers and are looking for new ones.I did this and I have 2 shippers in the Tampa area who always have a good light, good paying load for me when I'm ready to leave home.

6.Get rid of the notion that you are too small to be able to provide a service. Most of these shippers hand their loads to multiple brokers and don't care who moves it as long as it moves.

7.Don't look like you just rolled out of bed, wash your stinky parts, and smile,....your a trucker,....try not to act like one

This is the end of lesson one,..keep in mind I have only been an OO for 4 months, and this information can be disqualified in any truck stop.

[GMAN]

That is the entire reason for quality service!



Ya nailed that one goooooood Mike!

I am glad that you like it, Stan. I believe in providing quality service.


I like your comments on government and the oil industry.

[Professor427]

Orangtxguy said: And..Professor...you being Canadian as you are....you don't really want the US reducuing it's oil imports all that much...we pay for a big portion of your medical benefits...what there are of them.

January 2008 Import Highlights: March 28, 2008
Monthly data on the origins of crude oil imports in January 2008 has been released and it shows that two countries exported more than 1.50 million barrels per day to the United States. Including those countries, a total of five countries exported over 1.20 million barrels per day of crude oil to the United States (see table below). The top five exporting countries accounted for 69 percent of United States crude oil imports in January while the top ten sources accounted for approximately 89 percent of all U.S. crude oil imports. The top sources of US crude oil imports for January were Canada (1.944 million barrels per day), Saudi Arabia (1.479 million barrels per day), Mexico (1.198 million barrels per day), Nigeria (1.163 million barrels per day), and Venezuela (1.135 million barrels per day). The rest of the top ten sources, in order, were Angola (0.566 million barrels per day), Iraq (0.543 million barrels per day), Algeria (0.366 million barrels per day), Ecuador (0.247 million barrels per day), and Kuwait (0.239 million barrels per day). Total crude oil imports averaged 10 million barrels per day in January, which is a increase of 0.177 million barrels per day from December 2007.

Canada remained the largest exporter of total petroleum in January, exporting 2.586 million barrels per day to the United States, which is an increase from last month (2.360 thousand barrels per day). The second largest exporter of total petroleum was Saudi Arabia with 1.503 million barrels per day.

We are also the U.S. largest trading partner, and have been for decades (although, once again, the emerging Chinese economy is a close second).

I never thought of American consumption of Canadian oil as being the key economic factor in our national health care system but if that's the case, we thank you, all 33 million of us who receive every kind of medical care available, without being forced to sell our homes or lose our retirement funds. But this thread isn't about Canada's national health care system, nor do I care to debate it here.

The reality is that competition amongst major oil producers wouldn't have changed the other economic realities of a free-falling US dollar: increased speculation as a result of traders losing faith in U.S. currency (many oil-producing countries now demand payments only in Euros), moving their capital to commodities like crude oil and gold, and increased demand for crude oil that will outstrip supply capabilities within 20 years.

[arky]

Gman and Doghouse...Thanks for the replies!

I thought about starting a seperate thread for that question and now wish I had given that I got 2 very excellent responses.

Thanks again!

[DD60]

Some shippers will pay more for better service but there are also a lot of others who just want their freight moved at the cheapest rate possible regardless of who is hauling it. Finding the ones that pay for quality instead of quantity is a challenge.

[Orangetxguy]

Orangtxguy said: And..Professor...you being Canadian as you are....you don't really want the US reducuing it's oil imports all that much...we pay for a big portion of your medical benefits...what there are of them.

The top sources of US crude oil imports for January were Canada (1.944 million barrels per day)
Canada remained the largest exporter of total petroleum in January, exporting 2.586 million barrels per day to the United States, which is an increase from last month (2.360 thousand barrels per day).
We are also the U.S. largest trading partner, and have been for decades (although, once again, the emerging Chinese economy is a close second).

I never thought of American consumption of Canadian oil as being the key economic factor in our national health care system but if that's the case, we thank you, all 33 million of us who receive every kind of medical care available, without being forced to sell our homes or lose our retirement funds. But this thread isn't about Canada's national health care system, nor do I care to debate it here.

The reality is that competition amongst major oil producers wouldn't have changed the other economic realities of a free-falling US dollar: increased speculation as a result of traders losing faith in U.S. currency (many oil-producing countries now demand payments only in Euros), moving their capital to commodities like crude oil and gold, and increased demand for crude oil that will outstrip supply capabilities within 20 years.

If the Canadian government only taxed the oil exports at $1.45 per barrel Canadian, just for healthcare provision for it's citizens, they would collect $2,818,800/per day($1,028,862,000 annually). If they collect $5.65 per barrel Canadian, they collect $10,983,600($4,009,014,000 annually). Either one of those annual numbers lost would put a heck of a dent in your health care system. Just something to think about...on that one thought Professor.


Now...on the issue of the price of diesel fuel for "Truckers". Today, the largest driving factor in the price of oil, is "Speculation" on the commodities market.
Not only are we paying for the Oil companies that speculate on the commodities market, driving the price upwards, but now we have to pay for 401K plans which buy Oil on the futures market, Retirement Pension Funds whch buy oil on the futures market, and regular "Warren Buffet" type speculators..all buying Oil on the futures market. Yes..some of the price we pay can be attributed to China, India, and some of the "Emerging" economies in the world out there...but most "Economists" recognize that those planners and speculators, are the biggest reason for the "spike" from $50.00 per barrel last summer.


Don't blame the Bush's, the Clinton"s, or B. O. for all of it........we can all take a share of the blame!

[GMAN]

Some shippers will pay more for better service but there are also a lot of others who just want their freight moved at the cheapest rate possible regardless of who is hauling it. Finding the ones that pay for quality instead of quantity is a challenge.

You are correct about the cheaper price. Earlier today, I spoke with a broker who told me that he moves over 20 loads per day of mulch from $0.80-1/mile. My response to him was that anyone who would haul freight that cheap deserves to fail. The better shippers understand the need for them to pay a fair price to keep their freight moving. When they pay a higher rate, they provide themselves some insurance when capacity gets tight. Those who only ship through those who offer the cheapest rates will suffer when capacity gets tight. They will find it difficult to get their products moved to market. The carrier or owner operator who takes these cheap loads cannot make his truck payments, much less keep up his equipment. That makes his service unreliable. Those shippers who only use those whom charge a fair rate know that it costs money to keep a trucking business running in an efficient manner. They also understand and don't mind paying a premium for a reliable source. When they need to make sure that their products get to their customers in a timely manner, they don't want to rely on the cheapest carrier to get them there. They want someone who is dependable. If the carrier fails, then their business also suffers, as does their customers business. In the end, service will win over price every time.

[Red Clay Rambler]

Might be able to live without much foreign oil at all. At least this field is not in Alaska or the Gulf where environmentalists prevent it's mining, although I'm sure they will try to come up with something to stop it.

http://www.nextenergynews.com/news1/...news2.13s.html

[GMAN]

It seems to me as though drilling and exploring for additional oil reserves as well as building new refineries in this country is a matter of national security. The more we import, the greater our security threat. Our economy is being crippled by out of control oil prices. If we relied solely on our own reserves, then the value of our dollar would not have an impact on the price we pay at the pump. Frankly, I think this is a weak reason for the higher prices, anyway. Breaking up the oil companies and putting the control back into the hands of U.S. companies would also be in our national security interests. Competition ALWAYS results in lower prices and greater efficiency. I see no need for the EPA. They only seem to want to destroy industry in this country. It is a way for the government to control people and industry without using due process. It is just another useless government bureaucracy. A few people make a lot of money off of the environment. :x

[Longsnowsm]

I realize that a lot of people think the oil game is rigged(pun intended), but it might surprise a lot of folks to know that oil exploration is actually going on as fast as possible. The oil services companies report all of their teams and rigs are out there drilling and searching for oil as fast as they can and earning fantastic profits doing so. They do not have the equipment or teams to do the work.

The name of the game today appears to be Peak Oil, or as it appears these days Peak Everything. Oil demand is quickly approaching or has already passed the supply capacity. Older mature oil fields are already declining in production and new fields are just making up for production that is declining. So instead of building capacity they are struggling to maintain. Currently estimates appear to be showing that by 2012 production will likely start to decline and could decline rapidly.

You can follow some of the story at theoildrum.com, and at peakoil.com. I find it interesting and it could very well be critical for the US to find alternatives sooner rather than later. Today there are not any answers to the problem. Current alternatives put agriculture in the crosshairs, but then we start talking about fuel and food competing with each other.

So I think we have to look at the bigger picture. World oil production is in a pinch. Prices are only going to go higher. The reserves estimates given by Saudi are a farce and by the time people are aware of this fact it will be too late. We very well could be looking at a fuel and food rationing situation. The US is too dependent on cheap energy and our infrastructure depends on it.

I wish the free market had a solution, and as we have all seen government is both incompetent and dangerous. So what's the answer?

Longsnowsm

[GMAN]

Everyone seems to want to make the solution complicated. I think it is very simple. Break up the oil monopolies and make it a national priority to develop alternative energy sources. I would prohibit the oil companies from participating in the alternative energy enterprises. I would also shut down the EPA and take out any roadblocks to building oil refineries and drilling new oil wells, such as in the Gulf of Mexico and Alaska. It is a very simple solution.

[RostyC]

I don't know if I agree with you on getting rid of the EPA GMAN. Perhaps you've done more research than me on their activities, but if you remember the industrial revolution and the pollution that the big companies were involved in, I think we need some kind of standards and enforcement. Remember the Ohio river fires that were caused by pollution? Also, one of the rivers around Pittsburgh is just now starting to recuperate from what I here. (That came from a guy I was talking to that lived around Pittsburgh) Those are just two examples I can think of, it's early yet. So, while I think we need some kind of oversight it has to be fair as well.


I do agree on more competition in the oil companies and the need to drill more at home.

People are starting to change their habits because of the high prices. Hybrid sales are up (although vehicle sales are down overall), and public transportation use is rising. I know I've changed my habits. I still think we're in for a big correction at some point.

[Rawlco]

There is not much need of the EPA these days. The environmental groups are perfectly capable of reporting pollution directly to the consumers. Haven't you noticed that environmentally friendly is the new marketing angle. The free market and open exchange of information is much more effective than the government and offers a much faster response time. If a company pollutes and makes someone sick they are subject to a huge lawsuit as well. So what exactly is the role of the EPA?

Now I haven't researched it so I may be incorrect: Was there ever any legislation preventing Tuna fishing companies from using the dolphin unfriendly practices, or did the marketing angle take care of that issue. I don't think you can buy tuna that isn't "dolphin safe" now.

The rise in prices is a conspiracy of the environmentalists. They have been far ahead of us for years and we are just catching up. They have extorted money from the oil companies and have used that money to prevent exploration for oil. We are even letting CUBA steal the oil that is between florida and cuba yet we won't go get it. They have perpetuated the hoax that global warming is linked to man made carbon dioxide and in the rest of the world have created the business of carbon offsetting that has reforested prime farmland to trees so that farmers can earn a penny per tree per year. These countries are now needing to import FOOD since their farms are not producing it now, raising the price of Food worldwide at the same time as oil prices are increasing because we were not allowed to obtain new supplies. We are not allowed to use natural hydroelectric power and are even encouraged to STOP using hydro and tear down the dams that have stood for decades. Nuclear power is also taboo even though all of the pollutants are entirely 100% contained just because the soviet union trusted high school dropouts to run a poorly designed nuclear reactor during a test to see what would happen if the automatic safety systems were disengaged.

The environmentalists want us to return to the stone age. We can only live on the surface of the earth, we can't mine anything from it, we can't extract energy from anything except the sun, and we can't eat the endangered animals and plants. By the way they are all endangered, so enjoy your rock soup heated by the sun.

[Rawlco]

The free market could develop a new fuel supply. Windwalker can easily turn electricity into Hydrogen that can power everything. The problem lies in that as soon as the alternative hits the market the price of oil will drop like a rock, rendering the new energy source overpriced and expensive to change over to. OPEC isn't stupid and will realize that they must destroy alternatives economically as soon as they are developed by dropping the price. So I am not going to invest my millions into an alternative that can be so easily competed with.

We need to truely come to the end of feasibly obtained oil before an alternative will fly, or we will need to outlaw oil for the alternative to fly. My question is: What are you going to do when we develop the alternatives and the oil industry demands the government bail them out for the trillions they spend on exploration. If we bail out homeowners why not business?