Just Say No To Cheap Freight!

[LOAD IT]

Does the association that coined and placarded this phrase offer its members access or training to finding Not Cheap Freight?

[Rev.Vassago]

No. They don't define the term either.

[solo379]

No. They don't define the term either.

And how would you define it? Personally, for me, "cheap";- means below average, and customary, for that particular area, and season. And in any case, i would not haul below cost. And since i'm mostly running rounds, i'm also considering average for that particular round.

[Rev.Vassago]

And how would you define it?

Below ones' own personal break even point, wages included. Anything above that I consider average or above average.

What is cheap for you may be just fine for someone else, if their costs are lower than yours.

[solo379]

What is cheap for you may be just fine for someone else, if their costs are lower than yours.

Agreed. Assuming they are know "real cost".

[GMAN]

Does the association that coined and placarded this phrase offer its members access or training to finding Not Cheap Freight?

Other than discussions on their forum little assistance is offered. Some think that $1.20 is a good rate while someone else may think that $2.50 is too cheap. Much of the difference will depend on the length of time someone has been in the business and the type of freight they haul. I think some give little thought to what is cheap. They just want to keep moving. Their only thought seems to be to get one load off and throw another on as quickly as possible with little or no thought given to the rate.

[terrylamar]

The cheapest rate is turning down a load and ending up not hauling anything. When you, finally, find a "no cheap freight" load, you are that much further in the hole because of missed days and the rate has to be that much better just to break even.

There will never be a concensus on "no cheap freight." Like someone else said, what is cheap for you, may be just fine for me.

For example, a group of drivers are sitting around waiting for a load. Shipper offers a load that is "too cheap." All the drivers agree not to accept it. Shipper finally raises the rate. Now who gets the load? Which of the five drivers gets the load at a good rate and whick four are going to sit without a lload?

Now, all the back stabbing begins, whoever got the load, another driver will go to the shipper and offer to do it for .10 cents less and so on. Chances are the driver who finally gets the load is going to haul it for the original rate and maybe less.

No Cheap Freight will never work. The free market is at work the way it should be. If you can't find ways to reduce your cost, you will be out of business.

[Rev.Vassago]

It's a catchy slogan though that helps them sell worthless memberships.

[SickRick]

Other than discussions on their forum little assistance is offered. Some think that $1.20 is a good rate while someone else may think that $2.50 is too cheap. Much of the difference will depend on the length of time someone has been in the business and the type of freight they haul. I think some give little thought to what is cheap. They just want to keep moving. Their only thought seems to be to get one load off and throw another on as quickly as possible with little or no thought given to the rate.

But isn't there a "general average" for the type of freight? For example - Dry Van $1.35, Reefer $1.65, Flat, etc., etc.?

I mean, its always a "what the market will bear", in a free enterprise system. Folks that are stuck in an area with slow freight (South Florida for example) will take ANYTHING rather that have to deadhead out - so So. Florida rates for ANY KIND of freight may be typically way lower than say, Arkansas, California or the NW during harvest. Some folks will do the HAUL cheap, to make the killer BACKHAUL - as solo was indicating - where he averages both out and back to arrive at what is "worth it for him" to take a run. The difficulty and added expense of running into/out of NYC, makes rates there higher also.

Since I'll be "home port'd" out of South Florida - I can see myself taking "cheep" runs, just to get OUT of the area to where freight IS moving. Runs INTO So. Florida seem to pay decently, as you can't talk folks (who know how difficult getting a haul OUT is) into coming down here.

I have an number of O/O friends that just run EMPTY out of here, rather than sit and wait for a load.

If you think the shippers and brokers don't look at how things are moving in a given area, and use that to "beat rates down" - think again. Just "saying no" isn't going to FORCE the rates up. As has been already mentioned, SOMEONE will take the load just to get MOVING. But again, supply and demand (of both trucks and freight) in a given area will dictate rates (as they ALWAYS HAVE). It's just the sense of DESPERATION that permeates ALL BUSINESSES right now - that drives folks to take ANY CRAPPY RATE out of FEAR. Until the FEAR SUBSIDES (and we have quite a ways to go), this is the way things are gonna be - like it or not...

Rick

[terrylamar]

Exactly, those going out of business are the ones who cannot adapt to this poor economy. The only way you will make more money is to haul more freight, get better rates on the freight you do haul or CUT EXPENSES.

Cutting expenses is one variable you an affect immediatly. Quit running at 70 mph plus or do so when it truely makes the difference in delivering that day or getting another load that day. Nurse all the fuel savings you can. Quit idling. Keep your truck/trailer in good operating condition, get you PMs, learn to do maintenance yourself, have spare parts, etc.

I know I am preaching to the choir, you drivers know how to do, so pull a Nike!

[solo379]

The only way you will make more money is to haul more freight, get better rates on the freight you do haul or CUT EXPENSES.

How about"all of the above"?. But....there is an always the "but", isn't it? While is the last two, are always the case, the first one, could just prolong your agony....

[eplurubus]

Some bullhaulers feel that anything under $3/mile is unacceptable. If interested in some discussion on a bullhauler forum, click on this link: LIVESTOCK NETWORK - Livestock Loads | Cattle Loads

or this one: LIVESTOCK NETWORK - Livestock Loads | Cattle Loads

[GMAN]

But isn't there a "general average" for the type of freight? For example - Dry Van $1.35, Reefer $1.65, Flat, etc., etc.?

I mean, its always a "what the market will bear", in a free enterprise system. Folks that are stuck in an area with slow freight (South Florida for example) will take ANYTHING rather that have to deadhead out - so So. Florida rates for ANY KIND of freight may be typically way lower than say, Arkansas, California or the NW during harvest. Some folks will do the HAUL cheap, to make the killer BACKHAUL - as solo was indicating - where he averages both out and back to arrive at what is "worth it for him" to take a run. The difficulty and added expense of running into/out of NYC, makes rates there higher also.

Since I'll be "home port'd" out of South Florida - I can see myself taking "cheep" runs, just to get OUT of the area to where freight IS moving. Runs INTO So. Florida seem to pay decently, as you can't talk folks (who know how difficult getting a haul OUT is) into coming down here.

I have an number of O/O friends that just run EMPTY out of here, rather than sit and wait for a load.

If you think the shippers and brokers don't look at how things are moving in a given area, and use that to "beat rates down" - think again. Just "saying no" isn't going to FORCE the rates up. As has been already mentioned, SOMEONE will take the load just to get MOVING. But again, supply and demand (of both trucks and freight) in a given area will dictate rates (as they ALWAYS HAVE). It's just the sense of DESPERATION that permeates ALL BUSINESSES right now - that drives folks to take ANY CRAPPY RATE out of FEAR. Until the FEAR SUBSIDES (and we have quite a ways to go), this is the way things are gonna be - like it or not...

Rick

There are average rates by the region and nationally. Vans typically have the lowest rates mainly due to the number available. I have seen many offering rates of $1/mile or less. A friend of mine who runs his own authority just took a van load for $2/mile. That is not a widely available rate for vans right now. You can usually do better running short if you pull a van.

When people get scared then they do stupid things, such as haul cheap freight. The thing is most of us are hauling cheap freight if you look at what you were hauling for last year and then check out this years rates. When I go to an area where I know freight is cheap or sparse then I get a rate that will allow me to deadhead to a better area. For instance, if I go to the Northeast or New England then I get a rate that will allow me to deadhead to an area where I can get a better rate. From New England I expect to deadhead at least 300 miles to get a load. I don't usually sit for more than a day in an area unless I am putting a load together. When I go to Florida I deadhead out unless I have something lined up or booked before I get unloaded. Past experience tells me that I either deadhead out or take a load half way across the country for $1/mile. I prefer to deadhead out to Georgia or perhaps north Florida where I stand a better chance of booking a decent paying load.

The truth of the matter is that there will always be someone who will haul a cheap load. They are most likely taking loads that are too cheap into a cheap area so they may not have the money to deadhead out. It becomes a vicious cycle. I can't control what others do. I can control what I do. I just hauled a load into the northeast. My reload canceled so I had a choice to make. I can deadhead home for a cost of about $450 for fuel or sit for the long weekend for a cost of about $150. Had I deadheaded home I would still have made about $1.30/mile for the round. By waiting I should do much better even though I sat for the weekend. That is a choice that I made. Someone else might have deadheaded home because of the holiday weekend rather than sit and get a decent paying load on Tuesday. Had I deadheaded home then my good paying load would have turned into a cheap load. I will still make less due to the expense of sitting, but it will not be as much as paying for fuel to go home. While sitting I ran into someone who gave me a lead on a shipper who is having difficulty getting some product shipped. It may turn out to be a blessing if this turns into some new business.

[solo379]

Some folks will do the HAUL cheap, to make the killer BACKHAUL - as solo was indicating - where he averages both out and back to arrive at what is "worth it for him" to take a run. The difficulty and added expense of running into/out of NYC, makes rates there higher also.

A small correction. I do not haul "cheap", in my defenition. Last year, i've averaged $2.00 per loaded mile. That's not the whole rate, that's my cut, 72%+Fsc+extras. And that's for all directions and miles.
I'm pulling dry box, buttom of the barrel. Yes, $1.00 a mile seems to be "cheap", but i'll take it, coming out of NJ, NY, cause with the very few exception, it's what the market pays from that area, for dry box.

At the same time, just a few days ago, i've refused load, going to my hometown, from OH, $1.51 a mile, cause tho i know it's not too bad this days, i simply can't afford it, considering my roundtrip. Just to make something clear, $1.51 was 72% of the actual rate.

[allan5oh]

And how would you define it? Personally, for me, "cheap";- means below average, and customary, for that particular area, and season. And in any case, i would not haul below cost. And since i'm mostly running rounds, i'm also considering average for that particular round.

You're much too picky. That eliminates 90% of the freight out there!

Disclaimer : the previous post was in jest, and full of sarcasm.

[SickRick]

A small correction. I do not haul "cheap", in my defenition. Last year, i've averaged $2.00 per loaded mile. That's not the whole rate, that's my cut, 72%+Fsc+extras. And that's for all directions and miles.
I'm pulling dry box, buttom of the barrel. Yes, $1.00 a mile seems to be "cheap", but i'll take it, coming out of NJ, NY, cause with the very few exception, it's what the market pays from that area, for dry box.

At the same time, just a few days ago, i've refused load, going to my hometown, from OH, $1.51 a mile, cause tho i know it's not too bad this days, i simply can't afford it, considering my roundtrip. Just to make something clear, $1.51 was 72% of the actual rate.

Wasn't calling you a cheep-ster scoundrel there bro. Just noting that there may be a compelling reason to take a below-average load and average out BOTH SIDES of the trip.

Seems like full dry-box on most of the boards runs at, or below that $1.51 rate (depending on total miles). If you've got the patience and foresight to load plan LTL's from point A-B and back, then multiple LTL loads along route would maximize the cpm #'s. If you're getting paid all directions and all miles (including MT) then it sounds like you're not independent - but leased on, or at least subscribing to a dispatch service. Not that there's anything WRONG with that - but 100% O/O's that have their own clients and shag the load boards have to factor the MT miles, usually NO FSC, and negotiate extra's. Thus is the lot of deregulated trucking. Having your own "published tariff" as a single unit (or small fleet) independent is nice - but actually contracting work at your PUBLISHED RATES (including FSC, detention, lumper pay, etc. etc.) is a whole other story.

Most dry box out of South Florida runs significantly lower than that - but it comes down to - would you rather EAT your fuel to get out, or at least break even and get to where freight is running and paying better. Personally, while I'd LOVE to stand on "principal", if I need to get the duck out of dodge <quack quack> and I can do it and not go INTO POCKET - I'd probably be inclined to grab a cheap run, than run MT.

Rick

[GMAN]

Most dry box out of South Florida runs significantly lower than that - but it comes down to - would you rather EAT your fuel to get out, or at least break even and get to where freight is running and paying better. Personally, while I'd LOVE to stand on "principal", if I need to get the duck out of dodge <quack quack> and I can do it and not go INTO POCKET - I'd probably be inclined to grab a cheap run, than run MT.

Rick

That thinking is the reason rates are so cheap in some areas. I understand why someone might take a cheap load, but it does perpetuate cheap rates. As long as shippers and brokers are moving loads for $1/mile there is no reason to raise the rate to $2/mile. Until owners stop hauling at or below cost, rates in these cheap areas will continue to be below average. I won't haul for $1/mile but am hauling for less than I was last year at this time. The big carriers average the rates for the entire trip. If they get $2/mile going to an area and $1/mile out then they will average $1.50/mile for all miles. While I understand it in principal it does leave a sour taste in my mouth to haul a load, even one way, for such a cheap rate. It boils down to how you want to run your business. Everyone will do what they feel is best for their own business interests.

[solo379]

You're much too picky. That eliminates 90% of the freight out there!

No Allan, i call it "selective". And 10% is plenty for me. Last month, i've compared 2 weeks, i run back to back. One week was 3300 miles, and another 1295 miles. After all said and done, i've maid $400 more "absolute" net, for 1295 miles. Gross net, was $200 bigger on 3300 miles...it pays to be "picky" sometimes....

[tracer]

"IT Internet Truck Stop" magazine in its May/June 2009 issue ran an interesting story on freight rates (Page 26).

"To understand supply and demand the first thing to understand is that there are regional differences that affect rates. Some regions command a higher price due to higher overall demand for trucking services than other regions..

According to the magazine, there are best states, worst states and then those in between. Here's the magic list:

Best states (highest rates):

Wisconsin, Michigan, Missouri, Iowa, Illinois, Indiana, Kentucky, Tennessee, Ohio, Virginia, West Virginia and (surprise!) Nevada

Worst states (lowest rates)

Idaho, Montana, Wyoming, South Dakota, Colorado, Vermont, New Hampshire, Massachusetts, Connecticut

Average states (average rates)

Everything else

So, I'd say let's stay away from "the bad states" and haul more often to and from the "best states". I've cut out the story from the magazine and will keep it until I get my own authority and will have a chance to test this theory in real life

[GMAN]

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