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What the Hell is going on????

May 20, 2015 at 11:48 AM CST
+ 8
I know there are 3-4 of you who are going to pick this post apart find a way to dismiss my argument and I am actually looking forward to reading the replies. I have not been on this side of the steering wheel as long as many of you but I have been doing it long enough to have at least a little insight. I am struggling to understand the hows & whys behind whats happening in the industry. I am on the phone all day every day trying to broker deals with shippers and trying to get the best rates possible. I have a very good reputation with most of my shippers because we have provided good service for many years and the O/O's who pull solely for us have always been happy and some have even went so far as to say this is the most they've made driving in years. Part of my job is to deal with many shippers and negotiate the best rate for all parties involved, this being said I have been hearing the same thing from more shippers than I can count, they're telling me they have offers from other carriers/brokers to handle their freight for a fraction of what I had been getting. 1 example would be a lane we handled solely for 6 years, recently I had my monthly conversation with them usually used to discuss how things have been going, and they told me they were being "forced" to consider another broker, when I asked why they simply said they offered to do it for 20% less than I had been doing it for. Now, I'll tell you this lane was 685 miles, my rate to the shipper was $73/tn plus paid washout, unlike most shippers when asked he did tell me who offered the lower rate, at my rate the rate to the driver was $69/tn which was just over $2.50/mi plus the required washout paid, now the "rate cutter" made them an offer of $64/tn without being reimbursed for the washout, now my questuion to you is which math do I need to use to make that make sense for that carrier, they took a hit in the rate to them just so they could say the lane is theirs. Now I know there are those of you who despise brokers because we are evil, we apparently we aren't honest and we pocket to much of the money etc... and I repect your opinions, however I would like ask you this who is it thats out there cutting rates right now? is it me? NO!! I spend hours daily on the phone daily trying to negotiate rates with shippers that are fair to all involved, It is not me that is hauling freight for $1.50/mi, it is being done by those who are taking this freight to pay for their equipment they purchased when rates were decent. I am in no way pointing the blame finger at any one person, group or anything, I understand why people want to buy trucks and start trucking, there used to be good money to be made but there are so many who do not understand what it actually costs to operate the equipment, there's alway a learning curve for anyone breaking into the business and I'd like to think that very soon most of these guys will have figured out that they need to start getting more money for the work they're doing. This should in turn help bring the rates back up closer to what we need. I have nothing but respect for the trucking companies big & small who get the loads directly from the shipper and not use brokers, but there are a large number also who dont want to be on the phone negotiating with shippers, so i do believe there is a place for brokers such as myself. We are not ALL evil people, we do not keep more of the rate from some than others, we fight hard to get rates up when needed and I have always been open in my rates, all of my O/O's know exactly what I get for the loads and what they get from it, I always try to get the base rate seperated from the fuel when dealing with shippers because I believe of course 100% of FSC belongs with the truck. Right now the rates for feight are in the tank and it is hard for everyone, and even though I should be pissed at the independent truckers out there who are cutting my rates I'm not, so why some harbor so much hatred towards brokers baffles me. Although those of you who dislike me have never met nor hauled for me I invite you to call email me about any load I ever have available and ask me about it, I WILL tell you exactly what I get on it, how much of it is fuel, because I depend on you to get the job done and you would expect 100% honesty from me. I don't know who it is that has given brokers a bad rap but I have spoken with some of them who have been "Dissed" on this forum and they have never even heard of the people blaming the worlds problems on them. In closing I really want everyone to understand, I have nothing but respect for those of you doing it by yourself without a broker, but I also wish all would understand we are NOT the reason for the cheap freight and whatever else we are gettijng blames for, if you have a reasonable argument to the contrary I'd love to hear it. My email is [email protected]. I firmly believe there is room for everyone whose willing to work towards the same goal. I am also wanting to hear what everyone is saying about the rates right now and the lack of freight in general, it's getting tougher and tougher to keep my guys rolling even though I would sooner put on 2500 miles at $2/mi rather than only 1500 miles at $2.50/mi because most of my guys cant afford to sit and wait for that magical mystical "BIG MONEY" load.
Replied on Wed, May 20, 2015 at 01:10 PM CST
+ 1
I agree. At least I am not alone in the frustration I have over current rates.
Replied on Wed, May 20, 2015 at 01:43 PM CST
+ 3
My advice Jim, is to just step back and ride it out. There are a bunch of drug addicts out here right now and they don't know what it takes to run a business. They are making it harder for honest brokers and carriers that know their numbers to make it. We have about given up on the hopper side of things until all the ragbags go out of business. Any one of us should be able to do the math and know what it would cost the shipper to put it on their own trucks. I for one am not going to post that out and take the hating that goes on by the other truckers or brokers, so I have decided to keep that information to myself. I don't fault the shipper for taking the cheapest price, but I will forwarn them that when the dust settles and rates start going back up. Those that choose not to be loyal to us will find themselves having a hard time getting trucks to move their product when the market starts banging again. I for one am being very picky about which loads we haul and which customers we haul for. By the way Jim most of the customers that are actually paying better rates are the brokers not the shippers. Good Luck these guys are trying to steal the gold from your gold mine, while not realizing that there are bandits around the corner waiting to steal the gold from them.
Replied on Wed, May 20, 2015 at 06:41 PM CST
+ 1
We had a customer we've been working with, about 3-5 loads a week, switch to a different carrier because they came in and would the loads for $1.50 per mile. The customer had the deceny to tell me we would have first dibs if we would do it at that rate though... HA. Politely had to tell him that we couldn't afford to haul his freight for free, but would gladly be willing to talk again when the other carrier could no longer do it. In my opinion, the problem is not the good brokers (there are the good and the bad, as with anything), the problem is the guys who will go and do stuff this cheap. I believe rates are taking a hit because the bad brokers and bad carriers are assuming that since fuel is down, they can afford to do stuff at the current prices. Nevermind the fact that insurance, servicing, shop rates, washes, tires and on and on, don't go down when the price of fuel goes down.
Replied on Wed, May 20, 2015 at 11:04 PM CST
In regards to the brokers.....there ARE good ones and bad ones. The bad are the ones that tell you they're taking X amount of the load, then U.S. carriers find out what the shipper is ACTUALLY paying and the numbers don't add up and the broker is taking way more. There's also the bad brokers that tell you they pay in X amount of days and then 90 days after the load is delivered the carrier still hasn't seen the money. Then there's the broker (non hopper freight) that tells you the load weighs X amount of pounds and after its loaded it is more and it puts you overweight, so you call the said broker and tell them and they tell you that's what it is and you have to take it and the shipper will not take any of the load off. Those are the bad brokers and I keep a list of the ones that are bad and make sure to never haul for them.

On to the next issue, there are so many people that want to be O/O's and have no clue what it takes to operate a truck. I'm constantly watching my per mile cost. So many guys go buy trucks/trailers and as long as they are covering their payments that's all they care about. They have no clue what it costs per mile to run. But there's so many variables to change each truck. For example: if I lived in some small town where I could buy a house for 30k and the state taxes are low and the plate costs are low that changes the per mile cost vs a home that costs 300k and everything else is higher. So technically the guy in the small town COULD operate less by why one would want too is beyond me.
Its like hearing this swift driver talk about his load he has on that is paying 1.10/mile and he is getting 42 cents of that. How in the hell does that pencil out. How the hell can a company that has 5000 trucks run for 1.10/mile while paying the driver and his benefits and make money. If someone could explain that I'd like to know because it's baffled me for some time. but like you said, they are going to come in and cut your rate and when they can't perform or they go broke and the shipper comes calling, then you can raise the rates and put them in a situation where they are bound to you. Until then ride it out and pray the other guy gets what's coming.
Replied on Thu, May 21, 2015 at 09:00 AM CST
+ 1
It's just going to get worse. Now there's hundreds of oilfield trucks looking for work because there no fraction sand or water for them to haul.

Do your best to take care of your loyal customers for a fair rate. Give them good on time service. If someone under bids you wait it out your customer will come back after getting poor service from some scumbag.

Find the loads nobody else wants & don't let anyone know about them.
Replied on Thu, May 21, 2015 at 01:25 PM CST
What's going on??? Same thing I replied to another post... People are trying to get the SAME job done for the LEAST amount possible. The above reply hits the nail on the head... As the available carriers increases then the rate usually decreases. Now, I pose this question and I mean this with the utmost kindness... You can UNDERSTAND why some guys just don't give a damn anymore... Your INTEGRITY and your LOYALTY to a company just about means nothing anymore. It's sad... the guy that told you he was 'FORCED' to look for another carrier and a liar and the truth ain't nowhere in him.. Someone just offered him a lower price to get the same job done and..... Well... pretty much forget about the guy that has BEEN hauling for us... Don't get me wrong.. I still believe in providing good service to EVERYONE and doing your job to the BEST of your ability but like my mom always tolad me.. Don't ever think you can't be replaced... It's sad... but this world is just like that... I think it's heartlesss sometimes but that's the problem with competition. I mentioned earlier that 'MAKING A PROFIT' is different from person to person... All of those factors play an important part in rates...
Replied on Thu, May 21, 2015 at 09:17 PM CST
Very well put, Jim. The question i have for you guys with hoppers is if you realize how many hoppers were forced back into your market with the demise of the oilfields? I worked the south Texas oil fields until a couple months ago, and i know of 4 sand transload facilities that were getting, in total, 200 loads brought in by hoppers every day during the busy times. With limited rail siding space these facilities, which each loaded at least 4 different sand grades (there are over 30), they railed in 2 or 3 grades and had hoppers bring in the others. A LOT of capacity has hit a contracting market. I was "lucky" and was able to trade my sand trailer for a dry van, my old haunt. Wow, what an eye opener. An example, just because it happened yesterday; with the holiday weekend approaching I figured I'd look for a nice long trip to eat up the days. I'm in Carlisle, Pa. Up pops a load from Harrisburg to Woodburn, Oregon...south side of Portland. Call...here's the lady'exact words..."my customer won't pay a dime over $3,000"...I couldn't help myself, I started laughing, more properly guffawing, and she hung up. $3,000 for 3,000 miles....and it was 40,000lbs to boot. And i wish this was an outlier, believe me in the current dry van market it is not. I, like others, have gone through a lot of these downturns in 25 years, but man o man this one feels really different, and not in a good way.
Replied on Fri, May 22, 2015 at 08:17 AM CST
Here is a bit of advice for all. Figure your rates on worst case scenarios, ie; fuel at $4.00 per gallon, maintenence, tires, and so on. When you figure out that equate that into a per mile aspect. Thats where you get your bottom line. Some of us may have it higher then others but it is still your cost to operate. After that figure out how much you think you are worth to do the task at hand. If what you come up with is more then the rate offered REFUSE IT!!! Real simple old school logic. It is not a brokers fault if you cannot make money, it is your own. Old trucks are cool but if you are only getting 3.5mpg you will ultimately be unable to compete in this cut-throat economic climate we are in.
Replied on Sat, May 23, 2015 at 02:52 AM CST
Well said Jim.