Just Say No To Cheap Freight!

[geeshock]

I'll go on a guess that north fl probably saves the rest of the state. plus when citrus season comes round I'd think that saves the state also.

[solo379]

I am surprised that Florida wasn't in the worst states category.

Neither was Jersey, or NY.

[allan5oh]

When talking about cheap rates, many bring up supply and demand. This is absolutely true, supply and demand are the biggest drivers of rates. Florida will always have cheap rates. Yet a "good" rate out of Florida will be lower then a "cheap" rate out of Illinois.

It's all about maximizing the rate wherever you are. Some areas it's just easier to do this.

[Copperhead]

There are soooo many factors that go into what would be considered "cheap freight". I am leased on with a carrier and some would consider the average $1.20 a mile I am getting now as "cheap". But I don't have to wait for or factor the settlement, pay a broker for the load, have my own authority, didle with rates/region or seasonal fluctuations, I get up to $.28 a gallon off of the cash pump price when I fuel (even after getting fuel surcharge in the rate). So, am I hauling "cheap" freight? No, I am not with one of those mega carriers either and I run primarily the upper midwest, average 2800 miles/wk, get home every weekend, and do my own services and some of the maintenance as well. In good times, I could see the advantage of running on my own. In these times, it pays to have a little leverage that even OOIDA will not provide (even though I am a member).

[GMAN]

Leasing to a carrier who offers deep fuel discounts can make a difference in the rate you can afford to haul for if things get tight. I have seen some as high as $0.50/gallon off the pump price at TA. Discounts vary from one TA to another. Many of the large carriers offer price plus at TA. Some also offer discounts at other store such as Petro, Pilot and Flying J. If you have one of the major fuel cards you may be able to get a discount on fuel at certain independents and chains. You could equate cheap rates with your operating costs. If your operating costs are high, such as having high equipment payments, then a cheap rate for you may be higher than someone with low operating costs or someone whose equipment is paid off.

[SickRick]

I am surprised that Florida wasn't in the worst states category.

Ditto...

Rick

[kotflb]

Hello All,

I,m new here but been trucking for over 40 years. Call it what you please but I can't understand how anyone paying near .50 cents per mile for fuel, can twist their mouths to justify hauling anything for a dollar a mile. Call it back haul, loading to a better area, needing to get home or whatever you will. THAT behavior is killing ALL o/o's future, and it will only get worse as time and history have proven.





99 MACK 460ho 18 spd 3:70 twin screw
97 Great Dane 53 ft dry van
on board scales apu

[heavyhaulerss]

to me, cheap freight is when a carrier cuts the rate. the rates originally set by the shipper or who ever pays the freight bill is usually o.k. it gets cheap when a carrier offers to run the loads for less $$ & other cut that rate even more. I used to haul for Worthington steel, back when ruan was the logistics. their pay sheet was not bad at that time(several years ago) it was when some co's would send in a bid sheet & offer to haul a lot cheaper to get the freight & even when they got it, they would not have enough trucks' that would haul it, so they would broker a lot out & that would even cut the rates more. but having some driver 500-800 miles from home & no load he will take one for .70 a mile just to get home. I dead headed home a few time over 500 miles , rather than take a cheap load. I don't do it. home or away. I don't do it! last time was just 3 weks ago.

[GMAN]

Welcome to the forum, kotflb. I agree that it doesn't make sense to me that there are owner operators who will take a load for $1/mile. It may help them get home but next time the same broker or shipper will expect him to take a load for the same rate no matter where it goes. It also hurts the next guy who wants to make a living out here. The shipper or broker figures that if one guy will take a load for $1/mile then everyone should be able to take it for the same rate.

[GMAN]

to me, cheap freight is when a carrier cuts the rate. the rates originally set by the shipper or who ever pays the freight bill is usually o.k. it gets cheap when a carrier offers to run the loads for less $$ & other cut that rate even more. I used to haul for Worthington steel, back when ruan was the logistics. their pay sheet was not bad at that time(several years ago) it was when some co's would send in a bid sheet & offer to haul a lot cheaper to get the freight & even when they got it, they would not have enough trucks' that would haul it, so they would broker a lot out & that would even cut the rates more. but having some driver 500-800 miles from home & no load he will take one for .70 a mile just to get home. I dead headed home a few time over 500 miles , rather than take a cheap load. I don't do it. home or away. I don't do it! last time was just 3 weeks ago.

Things will not change until owner operators start running their truck like a business. There is a high percentage of loads that are hauled by owner operators in this country. Many of the major carriers are moving more toward recruiting owner operators to haul their freight. If the owner refused to haul below a certain price then rates would go up. I will also deadhead home if that is what I need to do rather than take a cheap load. I deadheaded from Pennsylvania home a few weeks ago rather than haul a cheap load. I had to be home to take care of some personal business.

[Copperhead]

Things will not change until owner operators start running their truck like a business.

I think that is on target. Many just hold onto the wheel and expect the world to come to them. You have to be more of a bean counter than the shirt and tie guys in the big offices. You have to spend a lot of time researching things, like what tire will give me the best bang for the buck and has the lowest rolling resistance to conserve a little more fuel. Should I buy that "real" truck or get one that will cost me the least to keep it moving and keep my fuel costs lower? Thinking outside the box to minimize expenses, yet keep equipment in best shape. Not thinking "no matter what I spend, it's a deduction".... let's see if this makes sense... I will spend $1 to save $.20 in taxes. Gee, that's smart!

Rates are what they are. Not much anyone can really do in the broad scheme of things. We may be able to influence them a little, but not much. However, operational costs are something we all can influence, and usually quite a bit. Those that can adjust will make it. Those that can't, well....

John Wayne said it well.... "life is tough, it is tougher if you are stupid"

[GMAN]

I know some owners who will buy more equipment rather than pay more taxes. I have one friend who just runs less so that he doesn't pay as much taxes. He still keeps about the same amount of money but doesn't run as hard and doesn't gross as much. It works for him.

[kotflb]

Welcome to the forum, kotflb. .

Thanks for the welcome GMAN. I been lurking for quite a while and I really enjoy this forum.

I started trucking back in '63 and we're all aware of the many, many changes that have affected this industry, especially the o/o segment of it. As owner operators, we are some of the hardest working, most under paid people in this country. We sacrifice family, security, workers benefits and a normal home lifestyle to keep this county afloat.

We have made trucking companies, brokers, dealers, insurance companies, truck stop owners, government agency's, parts suppliers, etc., filthy rich because of our dedicated service to this industry. While far too many of us are on the brink of bankruptcy. And this can't all be blamed on o/o's not being good business people.

When we take a close look at the facts, the laws and practices are designed to drive us out of business. SAY WHAT YOU WILL.... I REPEAT- the laws and practices are designed to drive us out of business. Most everything government has done has been against the o/o.
Everything big business has done, from fuel & shop prices to supporting legislation has been opposite of what is good for us. You get the picture so far.

Now I said all that to summarize with this. How can we, as a group fight back. "Stop cutting our own throats". The lowest freight rate should be 4.00$ a mile with today's economy. Owner operators should clear (after all business cost) $120k per year, running legal. I know this all sounds like pie in the sky dreaming, but think about it. As o/o's & company drivers, if you'll work for peanuts, that all you'll ever get, peanuts. That is until
big business figures out how to get you to work for just the peanut SHELLS.

We're gone from home 9, maybe 10 months out of the year for 50k, 60k, while others in business make $250k+. Smell the coffee people, they need us more then we need them. Once we're history, freight rates will fly up past $4.00 a mile.

[allan5oh]

Owner operators should clear (after all business cost) $120k per year, running legal.

I think you just made a huge amount of friends here at CAD with that statement!

[allan5oh]

kotflb... I think the majority of the problem is o/o's that think they need miles to survive, not revenue. Think of all the suckers that sign on to swift, CR england etc... that need 13,000 miles a month just to survive, and have to drive with a team driver 20k miles a month to pay down debt.

We have to educate our fellow drivers as best we can.

[kotflb]

kotflb... I think the majority of the problem is o/o's that think they need miles to survive, not revenue. Think of all the suckers that sign on to swift, CR england etc... that need 13,000 miles a month just to survive, and have to drive with a team driver 20k miles a month to pay down debt.

We have to educate our fellow drivers as best we can.

I agree Allan5oh. As large as the trucking industry is in itself, the o/o segment is the only business that ask the customer what they're willing to pay verses telling them what we charge. Even the independent tire repairman tells us what he charges, he doesn't ask what we'll pay him. It's indeed a mindset, and we have put the buggy in front of the horse.

Why so many of us are willing to work for 1980 wages in this economy only goes to prove that we don't understand how business or money really works. If more of us would realize that the value of our services is directly related to the price of AN OUNCE OF GOLD, we would see just how cheaply we are working for. The mindset that the dollar a mile for a backhaul (BACKHAUL: A brokers play on words to get you to work for peanuts)
is OK in some circumstances is akin to shooting oneself in the foot on the promise that the blood and pain won't show up till next week. Its still gonna hurt like h*ll, just not today.

[no_worries]

Why are they willing to work for peanuts? Because most, not all but most, company drivers can't make as much as they do in trucking anywhere else. Trucking is a bottom of the barrel industry. Like it or not, most people can do this job. Drivers work for what they're offered because it's still their best option.

The vast majority of O/O's don't make any more than company drivers do. They're in the same boat. They've invested their own capital to make company wages. If they can't figure that out they're probably not qualified to do much else either.

The small number of drivers or O/O's that could actually make good money doing something else, are probably not working for peanuts. The fact that rates are where they're at is a testament to how few of these types there really are. The peanut eaters far outweigh them.

[GMAN]

As large as the trucking industry is in itself, the o/o segment is the only business that ask the customer what they're willing to pay verses telling them what we charge. Even the independent tire repairman tells us what he charges, he doesn't ask what we'll pay him. It's indeed a mindset, and we have put the buggy in front of the horse.

You are correct, kotflb. I have made a few brokers speechless when I tell them what I get on a particular route. They give me a rate and then I tell them what I get or need for that run. Sometimes it works to get the rate up and sometimes it doesn't. The problem is there are too few who are willing to do that. There are too few who value the service they provide. For some of these cheap loads to fly off the loadboards these people cannot be negotiating on price. They must be just taking the first offer made just to move the truck. I never worry about miles. The more miles you run the greater your operating expenses. The more miles the quicker you wear out your equipment.