[LOAD IT]

Originally Posted by MichiganDriver

I get what you're saying about standing by your rate and not taking cheap freight but you lost me just a little bit too. What do you mean by "The truck is in control of the rates right now"? Supply and demand is on the side of the O/O? It seems with rates low it would be the opposite. But I'm kinda new and I'm just trying to figure stuff out.

My comment means the trucker can tell the broker, " I will haul your load for $ X amount, ask your boss/shipper if they would like my truck to pickup their shipment?" If you were reasonable or they are desperate, you will get the load. Trucks are tight in the spot market. The spot market is the day to day load board market.

[MichiganDriver]

Originally Posted by LOAD IT

My comment means the trucker can tell the broker, " I will haul your load for $ X amount, ask your boss/shipper if they would like my truck to pickup their shipment?" If you were reasonable or they are desperate, you will get the load. Trucks are tight in the spot market. The spot market is the day to day load board market.

Thanks for the explanation.

[GMAN]

Originally Posted by MichiganDriver

First off, I've noticed fewer trucks on the road too and I agree with you there.

As for supply and demand, can't we pretend that it's pre-1980 and we still hold science in high regard? Supply and demand are like the physics of the business world. Sure some truck owners are going to be idiots and give their services away for almost nothing but supply and demand are forces to be reckoned with. If the number of O/Os bidding on loads was magically cut by a huge percentage tomorrow morning you can bet loads would magically pay a whole lot more.

But maybe my basic premise is way off. Are there too many trucks on the road? Are you making less than you were say 10 years ago?

There is a direct correlation between supply and demand. That is somewhat skewed by those who demand to haul loads for a cheap rate. There is a group of owners who will take the first load offered regardless of the rate just so that they don't have to sit or negotiate a better rate. There are still a lot of trucks on the road, but it seems off from a few months ago. I expect that we will see more going out of business as the economy slows. I am probably making more for the miles that I am driving but less over all than I was 10 years ago. That has more to do with how much I am working these days. I am not working that much due to a family illness rather than not having freight to haul. I could work harder and make more if I chose. It is my decision. I can't speak for others. High fuel costs are certainly having a negative impact on the economy and this industry.

[MichiganDriver]

Originally Posted by GMAN

There is a direct correlation between supply and demand. That is somewhat skewed by those who demand to haul loads for a cheap rate. There is a group of owners who will take the first load offered regardless of the rate just so that they don't have to sit or negotiate a better rate. There are still a lot of trucks on the road, but it seems off from a few months ago. I expect that we will see more going out of business as the economy slows. I am probably making more for the miles that I am driving but less over all than I was 10 years ago. That has more to do with how much I am working these days. I am not working that much due to a family illness rather than not having freight to haul. I could work harder and make more if I chose. It is my decision. I can't speak for others. High fuel costs are certainly having a negative impact on the economy and this industry.

I'm sorry to hear about the family illness. Hopefully things are on the mend!

[rank]

Originally Posted by MichiganDriver

First off, I've noticed fewer trucks on the road too and I agree with you there.

....If the number of O/Os bidding on loads was magically cut by a huge percentage tomorrow morning you can bet loads would magically pay a whole lot more.

I don't think so. My experience shows that you can't lay the blame on the single truck o/o. I used to send trucks into places a couple times a week where now I only send trucks a couple times a month. The trucks that took "my" loads are not the o/o's. The o/o's cannot handle the volume. Nope, my loads went to trucking companies that need to run their trucks for cost just to keep their drivers employed. Drivers need steady income and that means you must book cheap freight once your company gets to a certain number of drivers.

[GMAN]

Originally Posted by MichiganDriver

I'm sorry to hear about the family illness. Hopefully things are on the mend!

I appreciate it. My wife has a number of serious chronic health issues. Things don't seem to be improving but appear to be getting worse. Thanks for your concern.

[MichiganDriver]

Originally Posted by rank

I don't think so. My experience shows that you can't lay the blame on the single truck o/o. I used to send trucks into places a couple times a week where now I only send trucks a couple times a month. The trucks that took "my" loads are not the o/o's. The o/o's cannot handle the volume. Nope, my loads went to trucking companies that need to run their trucks for cost just to keep their drivers employed. Drivers need steady income and that means you must book cheap freight once your company gets to a certain number of drivers.

That makes tons and tons of sense to me Rank. And since they get their trucks cheaper, their fuel cheaper, parts and tires and everything else cheaper... Ouch.

I appreciate it. My wife has a number of serious chronic health issues. Things don't seem to be improving but appear to be getting worse. Thanks for your concern.

That's not the response I was hoping for.

[GMAN]

Originally Posted by MichiganDriver

That's not the response I was hoping for.

Me, too. I am spending a lot more time at home these days than on the road.

[GMAN]

As a company grows there is a tendency to haul cheaper freight just to keep your drivers happy and moving. It becomes increasingly difficult to get the higher rates when you have a lot of trucks. Driver don't like to sit and if the company doesn't keep them moving then the drivers will go elsewhere. When a company grows they usually accumulate more debt to needing more equipment. That puts pressure on the company to generate revenue, even at the cost of making less on each mile run. When a company grows to a certain point they will usually have some of their own direct freight and will take less profitable freight in order to get back to where they can service their direct customer. I remember hearing a few years ago that Maverick was hauling freight out of south Texas for as little as $0.50/mile. That is less than it costs to operate their trucks. They must have had a very high paying shipper that would take them to that area where they felt they needed to haul freight so cheap. I don't see hauling freight at that rate for any reason.

When it comes to rates you can't blame just one group. You find cheap freight haulers at the large carriers and the single truck operations. It is an attitude that needs to change, but I don't see that happening. Only a few months ago I had someone come in and cut my rate by $1/mile on freight that I had been hauling for some time. I believe the customer had a problem covering the loads due to the cheap rate. I still haul for them from time to time, but it is for my rate. I am fortunate that I don't have big equipment payments. When you have a lot of debt there is more of a tendency to haul for cheaper rates. If I had agreed to match the rate the other people were charging I would be stuck with the cheap rate. There is other freight I can haul at a higher rate than I would have gotten on this one account.

We do operate in an environment of supply and demand. But, carriers are in control of rates, whether they realize it or not. The problem many have is that they don't believe that they can control rates. When a rate is offered you have a choice to either haul at the cheap rate, negotiate a higher rate, or walk away. When I get a call about a cheap rate I tell the caller what my rate is for that particular area. If the rate is considerably lower than what I need the caller either hangs up or tries to get my rate down. I usually stick close to my rate. If more owners would stick to only hauling higher rates then the rates would go up. I like hauling loads on the spot market. When a shipper or broker can't find a truck at a lower rate the rate will come up until someone books the load. The later in the day or those toward the end of the week, the better the rate. I figure that I can't control the rate that other will haul freight. I can control rates that I will haul freight. I have established a minimum haul rate for my business. If I can't get that rate then I will either sit or move the truck to a better area. I won't haul at the cheap rate where I can't make money. There are those who will.

[MichiganDriver]

Great info - thanks Gman.

That's the 2nd mention of the spot market in this thread. Spot market as opposed to ________? Loads that don't go through a broker? Loads that you contract directly with the shipper?