Big D;

Interested to hear why you think the FSC will go away.

 

Big D, you haul what you've described as contracted rates with your nursery stuff. How would that work without a FSC? Will your customer be happy paying a contracted rate if two weeks into the season fuel drops by $.50/gallon and yet he still is paying the same rate?

 

To steer back on topic a bit.....(no pun intended)
Do you think this increase in rates is due to fallen capacity only or is there more freight as well? I heard (can't remember where, maybe landline mag) that truck capacity fell by 40,000 units in the first quarter of 2008.
If it is more freight do you think it's a temporary push because of spring maybe?

The reason I ask is because for construction, in my area, it is very bad. I'm extremely slow right now. This is slowest I think I've ever been. On the commercial side there's a lot of bidding going on but no starts. My suppliers are hurting also.

I just can't see a recovery in the economy with 4 and 5 dollar fuel and with the housing crunch.

I miss the days of wanting to crush my cell phone whenever it would ring......... :lol: :lol: Now it makes for a good timekeeper.

 

RostyC, the article was in Landline magazine about the reduced capacity. When you consider that there are from 3-5 million trucks in this country (depending on who's figures you use) and take more than 40,000 units out of the picture it may or may not have an impact. That only reflects about 1-1 1/2% of the available trucks. I have noticed fewer trucks at times on the road, but other times it seems that there are as many as always. There seems to be plenty of freight and rates have gone up somewhat. Part of the increase in freight availability is likely due to the time of year. There is usually more freight in summer months. The reduced capacity can also have some affect, depending on where you run or live. I expect to see more trucks turned in or parked. That should also help decrease capacity and increase rates. During the last couple of weeks, I have had numerous calls stating that they were unable to find trucks. It is difficult to say whether the lack of available trucks is due to some being parked or the fact that some owners are deciding to not run for fuel money. I got one call yesterday and their rates started at about $2/mile. Previous calls from the same broker and rates would have started somewhere between $1.50-1.80/mile.

I hear some frustration in the voices of some brokers when I tell them what I will charge them to haul their freight. There has been something of a shift in the paradigm. Of course, I have always negotiated my own rate rather then relying on the broker or shipper to dictate what they will pay me to haul their freight. After all, it is my truck. I will be the one to decide what I will charge to haul freight.

If fuel goes higher, then I will have to charge more to haul freight. We will adjust to whatever happens with the economy. If freight is slow in your area, then I suggest looking to other areas where there is less capacity and more freight availability. Finding better paying freight may require more deadheading. Profits may be down somewhat, but you can survive. It is a matter of planning for difficult times.

 

All indications are that freight is not meaningfully higher on a seasonally adjusted basis (year-over-year). Capacity is lower than it was at the peak at the end of last summer. But I think Solo was pretty much on the money. Diesel was $1.55/gallon higher last week than one year ago. That's roughly $.25/mile more that you need on the rate just to make the same profit. I haven't seen any measures indicating that rates are up anywhere near $.25/mile on average. Maybe those of you that subscribe to one of those rate services could let us know...if they have a year-over-year comparison.

 

I have noticed rates up. Mine Fuel is up to $4.89 on Long Island.

Even the load boards are showing alot of loads over $2 a mile.

I do think it has to do with decreased capacity.

 

I have noticed some reduction in capacity, at least in some markets. I had two brokers call today and told me that they could not find trucks in a couple of markets. The two markets are currently noted for having little decent paying freight. Shippers and brokers will be forced to pay higher rates or they won't find trucks to haul their products.

 

I'm still being offered $1.00 freight. But I'm also being offered $3+ freight. Needless to say I am not taking the $1.00 freight.

Today I had one guy call for a truck in NC, "would you go to Delaware for $4.00 a mile?". I said no, thanked him for the call and hung up. Tell me some of these guys aren't getting desperate.