Are rates picking up??
 

In the last two weeks I've had calls from 3 new brokers looking for steps and they were paying $3.28, $4.50 & $3.31/mile on ~400 loaded miles. Is it getting better everywhere?

Rates are picking up IMO. I think the fuel issues, the steering wheel holders going down the tubes and O/O's starting to use the word NO to the borkers are helping.....

Haven't seen an increase in car haul rates- over the past few years our rates were up. But not in the past year. We have the unfortunate privilege of dealing directly with consumers... who don't want to pay more for better service. So we have to weigh raising rates against losing customer.

Texas and Colorado rates still suck, suggest you get paid well going in. Because rates going out are a joke.

Rates have been picking up out of TX. Mostly because of the nursery season here. Nothing really wrong with rates out of TX right now.

Hasn't nursery season slowed down up there in OR? Outbound stuff out of OR. seems low right now. CA. ,FL,GA,and TX look like they are getting a rate boost though.

All reports say they are inching up not including the fsc. Demand for trucks is starting to rise and perhaps people are finaly saying no to some of the insulting rates.

We are pretty much done for the time being for nursery, it will hit again on a smaller scale early fall.

Everyone I know running open equipment says that things are looking much better. Reefer rates are up compared to a month ago, but it's due to the season. I'm not convinced they're significantly better than this time any other year...maybe a little. I have talked to a few brokers and shippers over the past few weeks that have said it's getting harder to find trucks. One broker's exact words, "You guys are going to make a lot of money this summer."

I didn't think so... I believe it's more FSC related, weather you call it that, or not... :roll:

I really don't care too much about FSC. For me it is the rate that matters....

I went back and looked at May of '07. Average was $3.41 (4,000 loaded miles). So far in May this year it's $4.46 on 1500 miles. But yeah fuel is up $.30/mile.

Exactly. Who cares if a load paying 2.75pm doesn't include a FSC as compared to a load paying 1.45 with a .54 FSC.

I care. I would rather see it broken out. Why? Because in 3 months time when fuel is up 10% you can go to the shipper and show them the broker isn't passing on the 10% increase that the shipper has paid. That will really pi$$ a shipper off.

If this feel good legislation called the TRUCC act passes, you will not have to worry about the breakout of the FSC, because the FSC will go away...........................

I think what Solo was saying is that any increase is probably due to fuel going up (increase in FSC) not the base rate which would reflect an actual change in supply/demand. If gross rates are up $.20 who cares? That simply covers the increase in diesel.

Why?

How do you think a shipper is going to react to the idea of an annual freight bid that doesn't include a FSC? I suppose if the bid is low...good luck getting a truck.

Exactly! 8) It's always a pleasure talking to you. Great minds, think alike! :lol: :wink:

Common sense...the universal language :wink: :lol:

Big D;

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

Sorry, missed your question the first time around....

IMO, the TRUCC will hurt the lease operators the most. To put it simply the shippers and the carrier will simply do away with it, since it will not be mandated and the bill has no teeth for enforcement.

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 am in the enviable position in that I and or my family personally know the families of the large nurseries that my trucks haul for. Negotiating rates for the 8 to 10 week shipping season is not rocket science. We sit down over coffee or lunch and work out a rate that makes both of us happy. We discuss a rate that is all inclusive as they are aware of the cost of fuel. I do the same with my produce brokers ( 2 ) and xmas tree farmers.

Remember it is not what you know, but who you know..........

I have noticed rates up. Mine :D 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.

I too agree that it's decreased capacity and I agree that reall rates aren't up as much as they seem. Alot of it is fuel. The other day a broker called to sell me a step deck/double drop load and didn't even try a rate on me he just asked "What do you need?". I was driving so I did some quick math in my head and said $1400 for the 425 loaded miles. Not only did he accept it, he offered me two more loads.

Now all of a sudden I'm a cheap freight hauler.

A couple of weeks ago, I was trying to come to grips with inflation, and mentioned that I need $3.50 a mile, for a legal load.

Yesterday, it was $4.

There is doubt in half the conversations.
There is understanding in the other half.

I acquired a couple of good contacts, yesterday.
I offered one of the good contacts a flat fee to go to CA: $25,000. It was 104" wide, and light.

There is lots of capacity building in CA, right now.
Even if there weren't lots of capacity building out there, I still don't care to go.

I'm just not sure what figure it would take, to motivate me, for any given job.

That certainly minimizes the impact of price fluctuations.

Is this another short season? So you've never worked with year-long contracts? I'm working on putting together a project right now for year-long hauling. Couldn't imagine not incorporating a FSC. Doesn't make sense for me, doesn't make sense for the customer. I'd welcome anyone that thinks they can logically argue to the contrary.

I just booked a load for $900 on 163 miles. One pick, one drop, no touch.
20,000 lbs :D

The only time a FSC is " needed ", is for long term freight contracts. Your best and highest rates are always negotiated on a spot basis....

Your best and highest rates are negotiated on the spot-market only when market conditions are in your favor. I can negotiate $3.50+ all day in FL right now but if someone steps up and offers me year-round freight for $2, I'll drop that $3.50 in a heartbeat.

But you're absolutely right. FSC is irrelevant in the spot market but is needed for long-term contracts. That's been exactly my point all along to everyone that says, "Who cares about a FSC. All that matters is the gross rate." As you said, that's only true for short-term arrangements. Not everyone works solely on the spot market. In fact, I'd be willing to bet that the majority of freight does not move on the spot market.

The fsc can help offset some costs and avoids the inevitable give and take when fuel jumps quickly. It also assists shippers in planning their budgets. The problem is that some shippers and brokers keep part of the fsc. The consignee is not aware of what is going on. I know a shipper who charges from $3-4/mile for freight. He "brokers" his own loads for about $1.60/mile. I won't play that game. It is dishonest. He called me not long ago to start hauling freight for him but I told him that I won't haul freight that cheap. Previously, I had been getting loads through him for $2.50-3/mile and that was about a year ago before fuel jumped up so much. The fsc basically sets a formula so the shipper and carrier can offset higher fuel prices without constant negotiating. Personally, I prefer to do each load separately. Rates are usually much better. I can understand why large shippers and carriers find using a fsc to be beneficial. For the smaller carrier I believe it is more better to do one load at a time.

So if someone came to you and said they have a weekly load to Chicago and offered the equivalent of your current average rate with a FSC, you would decline? Sure there will be weeks when you could get a higher rate on the spot market but there will be just as many weeks when you won't get as much. Plus you have stability and can concentrate on finding loads in just one lane. The downside risk sure seems to outweigh any upside on the spot market.

It would depend on the rate and fsc. I want a decent rate, whether you structure it with a fsc or not. Breaking out the fsc is a matter of semantics. If it is a run that I wanted and had the rate that I needed, then I would consider taking it. I don't take a load simply because it is a good rate. I have my own criteria. I actually turned down several good paying loads this past week because they didn't meet my needs. It isn't always just about the money. There can be other considerations.