Watch the market
If you pay attention to what is going to happen this next week, starting this Friday. The price of freight will start going up. This has been true for each and every year that I have been doing this. Each year about this time (we all know what is going on) the shippers/brokers start their last minute push to get freight cheaper and cheaper for two weeks prior. Once the trucks start parking for the big DOT party, the shippers/brokers start jacking their prices up to get us to pull their freight. The prices generally continue to go up until about Sep - Oct. Then they fall off for about a month and then start jamming again until after Christmas. Now on the hopper side of things i am seeing rates start to pu as of today.
Just think, if we independents figured out how to work with one another instead of cutting each other up, how we could impact the market with either a slow down or taking a pre-planned vacation at the same time. My theory is that we could keep our market stable. Most of you don't pay attention to the market and what is going on around you. You are so busy running from point A to B for X, that you don't really know what rate you should be charging.
It matters not what your cost per mile is, it only matters if you can do it cheaper than the customer can do it themselves, and offer them the service they desire, along with the protection they receive by putting it on our trucks versus their own. If you keep bidding your rates at your cost per mile versus the shippers, than you are a fool and are leaving money sitting on the table.
Here is an example: Each driver has their profit built in for this example
Your cost to run is: $10 per mile
Your neighbors cost to run is: $15 per mile
His cousins cost to run is: $17 per mile
The shippers cost to run is $25 per mile
The shipper is willing to pay $22 per mile but all three drivers are willing to leave the green in the shippers/brokers pockets instead of their own.
I really don't understand this logic. If I could put $12 per mile in my pocket because I already owned my equipment and knew how to run a more efficient operation, why wouldn't I? Why would I sell my services cheaper than the customer would be willing to pay? Why would I let someone who has very little money/skin invested dictate to me what I am worth? Why? Why? Why, I keep asking, and most of you can not give me the answer. I have tried for the last five years to share as much education with truckers as possible. It amazes me that I can give them the answer to the question, than talk to them a week later and they did not implement any of the advice that I had given. I always thought my dad was one the most pig-headed and rude individuals that I had ever met. I chalked that up to him only having a 6th grade education. Now I know the answer "Trucker Pride", that is why he is 70 and still has to drive a truck for me. I think it is sad that my dad who was an Owner Operator did not know truly what he was worth and ended up parking his Pete and now has to drive my Volvo's. Don't you agree?
I forsee the independent carrier being extinct in about ten years if things continue on the way they are going. Oh you will still have your own authority, but you will saddle up with a bigger carrier, or broker under one of those Power Only deals and you will now really be no better off than a Lease Operator signed with Swi** or C* En*land. You have gotten so used to being told what to do and how to do it and what to do it for, that this will be a natural transistion for you.
It saddens me to see this occur, when I was a kid riding around with dad, trucking used to be fun. Everybody made money, and had a blast doing it. Now most of us are just prisoners or zombies in a box. When you have to run more and more miles just to make ends meet. You will get more and more tired and make more and more mistakes.
How do we stop this? The first thing is for you to swallow a little trucker pride and decide that you are going old school and start working with each other instead of against each other. The next thing is to get organized and agree to what is best for all concerned. Pick a leader and a board of truckers that have not only knowledge but a level of watching the market for all those that are out there busting their tail driving down the road. Stick with the plan that the organization has while still operating freely. I am not talking about a Union here, but am talking about the power of leverage. You have very little leverage when you come from a posistion of weakness.
While the rest of you are whining and complaining, my trucks are only running .06 per mile less than they were last year. Why is that? Because the price of fuel is cheaper than this time last year. It has not effected our ability to procure the freight that we desire from our customers, because they understand that I know what the cost for them to run the equipment would be. I also tell them up front when they tell me that somebody else will do it cheaper, that's ok let them have it. They will pay my truck more because we do not gripe and complain as long as you are paying our rate. Each and every day there are customers that are looking and willing to pay for better service. I do not own new tractors, but that does not change the price that I am willing to run our equipment at. We are the guys that are willing to haul the load for $22 per mile even if our cost is $15 per mile. We are not willing to leave the green on the table, but want to take it with us so we can reinvest and create a better working environement for our drivers.
I wish good luck to all of you out there. My company will be fine no matter how it all shakes out because I know my numbers and the shippers as well. When you guys decided to really get something going give me a call.
Alfred (Scott) Jordan
816-853-2301
Just think, if we independents figured out how to work with one another instead of cutting each other up, how we could impact the market with either a slow down or taking a pre-planned vacation at the same time. My theory is that we could keep our market stable. Most of you don't pay attention to the market and what is going on around you. You are so busy running from point A to B for X, that you don't really know what rate you should be charging.
It matters not what your cost per mile is, it only matters if you can do it cheaper than the customer can do it themselves, and offer them the service they desire, along with the protection they receive by putting it on our trucks versus their own. If you keep bidding your rates at your cost per mile versus the shippers, than you are a fool and are leaving money sitting on the table.
Here is an example: Each driver has their profit built in for this example
Your cost to run is: $10 per mile
Your neighbors cost to run is: $15 per mile
His cousins cost to run is: $17 per mile
The shippers cost to run is $25 per mile
The shipper is willing to pay $22 per mile but all three drivers are willing to leave the green in the shippers/brokers pockets instead of their own.
I really don't understand this logic. If I could put $12 per mile in my pocket because I already owned my equipment and knew how to run a more efficient operation, why wouldn't I? Why would I sell my services cheaper than the customer would be willing to pay? Why would I let someone who has very little money/skin invested dictate to me what I am worth? Why? Why? Why, I keep asking, and most of you can not give me the answer. I have tried for the last five years to share as much education with truckers as possible. It amazes me that I can give them the answer to the question, than talk to them a week later and they did not implement any of the advice that I had given. I always thought my dad was one the most pig-headed and rude individuals that I had ever met. I chalked that up to him only having a 6th grade education. Now I know the answer "Trucker Pride", that is why he is 70 and still has to drive a truck for me. I think it is sad that my dad who was an Owner Operator did not know truly what he was worth and ended up parking his Pete and now has to drive my Volvo's. Don't you agree?
I forsee the independent carrier being extinct in about ten years if things continue on the way they are going. Oh you will still have your own authority, but you will saddle up with a bigger carrier, or broker under one of those Power Only deals and you will now really be no better off than a Lease Operator signed with Swi** or C* En*land. You have gotten so used to being told what to do and how to do it and what to do it for, that this will be a natural transistion for you.
It saddens me to see this occur, when I was a kid riding around with dad, trucking used to be fun. Everybody made money, and had a blast doing it. Now most of us are just prisoners or zombies in a box. When you have to run more and more miles just to make ends meet. You will get more and more tired and make more and more mistakes.
How do we stop this? The first thing is for you to swallow a little trucker pride and decide that you are going old school and start working with each other instead of against each other. The next thing is to get organized and agree to what is best for all concerned. Pick a leader and a board of truckers that have not only knowledge but a level of watching the market for all those that are out there busting their tail driving down the road. Stick with the plan that the organization has while still operating freely. I am not talking about a Union here, but am talking about the power of leverage. You have very little leverage when you come from a posistion of weakness.
While the rest of you are whining and complaining, my trucks are only running .06 per mile less than they were last year. Why is that? Because the price of fuel is cheaper than this time last year. It has not effected our ability to procure the freight that we desire from our customers, because they understand that I know what the cost for them to run the equipment would be. I also tell them up front when they tell me that somebody else will do it cheaper, that's ok let them have it. They will pay my truck more because we do not gripe and complain as long as you are paying our rate. Each and every day there are customers that are looking and willing to pay for better service. I do not own new tractors, but that does not change the price that I am willing to run our equipment at. We are the guys that are willing to haul the load for $22 per mile even if our cost is $15 per mile. We are not willing to leave the green on the table, but want to take it with us so we can reinvest and create a better working environement for our drivers.
I wish good luck to all of you out there. My company will be fine no matter how it all shakes out because I know my numbers and the shippers as well. When you guys decided to really get something going give me a call.
Alfred (Scott) Jordan
816-853-2301