Gangrene in the industry

[martinwizz]

Sick and tired of those lies and sister companies pretending they are something they are not. Caught another carrier lying about their availabilities and could not care less about the service. In this case, we have requested a 3 axl step deck, What shows up is a 2 axl, which customer will have a hard time balancing the load out. We then ask a picture of the truck to shipper and we realized once again we were bullshitted. Moreover, those carrier are the same whining on that very site they have got caught hauling for another fake carrier who never paid them and then try to go to the shipper and consignee to be paid. Jace Trucklines got caught today, tomorrow will be another one. Why can't carriers stick to their truck? Bunch of liars all over. So sick of it.

 

[JACKBURTON]

Sick and tired of those lies and sister companies pretending they are something they are not. Caught another carrier lying about their availabilities and could not care less about the service. In this case, we have requested a 3 axl step deck, What shows up is a 2 axl, which customer will have a hard time balancing the load out. We then ask a picture of the truck to shipper and we realized once again we were bullshitted. Moreover, those carrier are the same whining on that very site they have got caught hauling for another fake carrier who never paid them and then try to go to the shipper and consignee to be paid. Jace Trucklines got caught today, tomorrow will be another one. Why can't carriers stick to their truck? Bunch of liars all over. So sick of it.

Just another drowning victim, trying to stay afloat with $100 profit off a double brokered load.
These times are tough but the shit will all be washed away in the end.

EDIT: Jim says it better than me. vvvvvv

 

[Jim L]

The gangrene is running deeper and deeper.
The industry is going through a dip that runs deeper than it has in a while after following a peak that reached highs never seen before. There were many entrants into the market hearing of excessive rates and profits that could be got. These individuals purchased equipment at inflated values found ways outside of the regular processes to get these units up and running. They shared insurance policies and cross plated trucks with other known individuals in the same manner. The industry is now learning of the way some of these individuals manipulated their systems. Insurance companies are cancelling policies of those where were found to operate more trucks than stated. Freight brokers are getting squeezed by other freight brokers and carriers to lower prices. Then Freight brokers are learning (some the hard way) that the lowest price isn't always the best and now have to revert to further defining their process on how to weed out the riff raff. The riff raff has who been burned by using carriers who double broker their loads and do not pay. Now the riff raff is saying to themselves that if they got burned why not do the same to some other unsuspecting shmuck which will further kick the can down the road.

A purge is in progress - just not fast enough for most. A lot of brokers and carriers alike are hanging on for dear life hoping that something will change. The question is how much of a risk are you willing to take to continue in the status quo? How do you tell a freight broker (or a carrier selling a load) to pound salt when your truck has been sitting for 24 hours with no load to move it. Do you take the chance that this guy will pay or wait longer? How does a freight broker try to sell a load that the customer is saying he can get it moved much cheaper?

The only way to rid the gangrene is either a decline in the availability of trucks or an increase in the amount of freight being offered. These two items are inversely related to each other. When a carrier has the choice to tell a freight seller to pound salt because something doesn't feel right it will change quickly. Right now, the freight seller is the only person who can choose to fix it because he has the freight.

If the lowest cost is always the only option, the gangrene will continue to fester.

 

[MLCAR]

I wonder if a slew of "misrepresentation of services" law suites would have any effect? I'm assume stating in an email that one's owned equipment would be used for the moving of said freight and then failing to do so would be clear cut grounds for the suit to go through.

 

[loaders]

I wonder if a slew of "misrepresentation of services" law suites would have any effect? I'm assume stating in an email that one's owned equipment would be used for the moving of said freight and then failing to do so would be clear cut grounds for the suit to go through.

Unfortunately the legal system is not the protector of business, nor is it ntended to take the place of solid and thorough due diligence.

 

[Fr8Guru]

Jim has a great synopses.

The one thing that drags this process out further is how brokerage works in this industry. Very few people make it past 5 years doing it. Those that do thrive, understand wins/losses and how to quote.

The big box brokerages are revolving doors. There is always another rep to take over an account and make $5 a load.

We've really seen it return this bid season. Customers are looking to reduce contract rates and brokerages are salivating at giving fake, cheap rates to "secure" business. Here's a real example of negotiation we just went through with a long term customer.

Broker gives customer $1.5 per mile. Assets need $1.8 to be comfortable. We we running it the past year for $1.95. We reduced to $1.8 as we knew the competitive nature of the bids this year.

Customer says look, I know your service is there. I can justify to the higher ups paying $1.65 to you. Anything more, they will tell me to take the $1.5 because we need to cut expenses.

We accept cause we need the business but the broker has just cost us .15 cents a mile on that lane. Could we take the risk the broker can't run the business at $1.5? 100% we could, but at the same point, we don't know the broker. Will he take losses for 3 months? 6?

The guys on the ground level understand, but at the end of the day, they all have bosses.

 

[Jim L]

We accept cause we need the business but the broker has just cost us .15 cents a mile on that lane. Could we take the risk the broker can't run the business at $1.5? 100% we could, but at the same point, we don't know the broker. Will he take losses for 3 months? 6?

The customer would expect you to run it for a whole year; more if they don't get around to quoting it next year because they really know that the rate will increase significantly. They will accept a broker calling up saying that they cannot afford to do it at 3 months, they cannot find carriers to cover it and they're out, but they'll tell the carrier to find ways to cut the costs and honour the price. Why? Because the carrier can be compelled to take the load, but the broker does not have the assets to. Somehow contract rates don't really apply to a reseller of freight.

 

[MLCAR]

The guys on the ground level understand, but at the end of the day, they all have bosses.

we went through this almost every day for the initial 2 months of servicing one of our customers. We let our competitor take the business that he thought he could handle for such dirt cheap prices, today we have gotten back 85% of the lanes the customer handles. IMO $1.5/mile while the broker takes his cut, he'll be through his carrier list within a week, then the service issues arise, and one thing I'ev learned is that the "Bosses" hate only 1 thing more than spending money, its LOSING MONEY. They almost lost one of their biggest customers due to poor delivery service and almost back charged for failing to keep up with inventory commitments. We haven't had to talk about rates since.

also as a foot note, any carrier telling you they can be comfortable at $1.80/mile is lying to you lol

 

[theman]

I don't think it's quite THAT simple. I get the frustration though. Brokers don't make the market, they facilitate it. I've sold on both sides of the fence (and sometimes simultaneously). Sometimes I may take some business I don't want to get something that I did want. And sometimes I had a market advantage to take charge of.

But when it is a pure brokerage solution, on a contract basis it would always be quoted as aggregate cost plus. So sometimes I made more than my share ... and sometimes I lost money - on the same lane. As long as the average margin over term fell in a certain range it was OK. Also I worked in a salary plus environment that is more friendly to doing this.

I know that the 'big one' out there will run volume at very, very low margin but I don't agree with the premise of that. In the end I'm around to make money, if friends come that is a bonus. This is sales in a nutshell, actually.

The 3PL industry does a poor job in general of coaching and retaining talent. They see someone perform and decide to make it harder to succeed, and really it doesn't work out for anyone when this happens. This is the reason I'm not in it anymore. Too bad, because I enjoyed it when I was allowed to do my job and profit from it.

 

[duke22]

I don't think it's quite THAT simple. I get the frustration though. Brokers don't make the market, they facilitate it. I've sold on both sides of the fence (and sometimes simultaneously). Sometimes I may take some business I don't want to get something that I did want. And sometimes I had a market advantage to take charge of.

But when it is a pure brokerage solution, on a contract basis it would always be quoted as aggregate cost plus. So sometimes I made more than my share ... and sometimes I lost money - on the same lane. As long as the average margin over term fell in a certain range it was OK. Also I worked in a salary plus environment that is more friendly to doing this.

I know that the 'big one' out there will run volume at very, very low margin but I don't agree with the premise of that. In the end I'm around to make money, if friends come that is a bonus. This is sales in a nutshell, actually.

The 3PL industry does a poor job in general of coaching and retaining talent. They see someone perform and decide to make it harder to succeed, and really it doesn't work out for anyone when this happens. This is the reason I'm not in it anymore. Too bad, because I enjoyed it when I was allowed to do my job and profit from it.

@theman what do you think they are doing to make it harder for the talent. Retention anywhere seems to be difficult but there's something you are referencing here that i would be incredibly interested to hear your thoughts on.

 

[theman]

@theman what do you think they are doing to make it harder for the talent. Retention anywhere seems to be difficult but there's something you are referencing here that i would be incredibly interested to hear your thoughts on.

Real salespeople have to have both hunter and nurturer in them. Career salespeople view themselves as a business within a business. So the key is sustainable growth so that it generally has an upward trajectory,

Someone who is new is going to have a steeper curve. Somehow employers specifically in this industry don't see this and expect the same progress of new business every year. The fact is that there is always attrition that cannot be controlled, but if one is putting in more than they're taking out it's all good. I mean this from a growth perspective and from a money in/out perspective as well. If I'm making money, you're making money.

It happened too many times to me that the rug was pulled from me - I knew I could do my job, it was a matter of whether I wanted to or not.

Mature salespeople need some coaching to make sure that what business is brought in is sustainable, but other than that ... let them do their job. This is a concept completely lost on this industry. I can tell you that where I am it's not only that I think it's better, but the good salespeople have great longevity. It is ultimately better for everyone.

 

[chica123]

There is one point that hasn't been mentioned, but I think it is playing a HUGE role in the decline of the industry as a whole. Many, many new drivers are coming to Canada under the disguise of International students. Once here, they take on trucking jobs and are paid far less than the going rate. They are working for companies that are either self-insuring or working in a grey area. This is driving down the quality of equipment, drivers, and service all around. They do not take pride in providing excellent service. They are not wholly reliable, either. It has driven the whole trucking industry into a downward spiral. I think the government needs to get a hold of the situation and this does not just mean reducing the number of International students.

 

[theman]

There is one point that hasn't been mentioned, but I think it is playing a HUGE role in the decline of the industry as a whole. Many, many new drivers are coming to Canada under the disguise of International students. Once here, they take on trucking jobs and are paid far less than the going rate. They are working for companies that are either self-insuring or working in a grey area. This is driving down the quality of equipment, drivers, and service all around. They do not take pride in providing excellent service. They are not wholly reliable, either. It has driven the whole trucking industry into a downward spiral. I think the government needs to get a hold of the situation and this does not just mean reducing the number of International students.

Not a new problem really. The only difference between now and 30 years ago is the origin of the drivers.

 

[chica123]

I agree the problem itself is not new, but the sheer volume of workers disguising themselves as international students has increased exponentially. Someone mentioned the LMIA and how difficult it is to obtain. I would argue many just take the backdoor and come as students...
Anecdotally, we have spoken with many people who say that international students can be granted permanent residency if they are offered a job as a "manager" at an establishment. At some menial workplaces, the entire staff is designated as "managers" just to qualify for permanent residency. So it appears on the surface the whole international student program is gangrenous as well. Sorry this got off-topic, lol. Have a nice day, all.

 

[Fr8Guru]

I don't think it's quite THAT simple. I get the frustration though. Brokers don't make the market, they facilitate it. I've sold on both sides of the fence (and sometimes simultaneously). Sometimes I may take some business I don't want to get something that I did want. And sometimes I had a market advantage to take charge of.

But when it is a pure brokerage solution, on a contract basis it would always be quoted as aggregate cost plus. So sometimes I made more than my share ... and sometimes I lost money - on the same lane. As long as the average margin over term fell in a certain range it was OK. Also I worked in a salary plus environment that is more friendly to doing this.

I know that the 'big one' out there will run volume at very, very low margin but I don't agree with the premise of that. In the end I'm around to make money, if friends come that is a bonus. This is sales in a nutshell, actually.

The 3PL industry does a poor job in general of coaching and retaining talent. They see someone perform and decide to make it harder to succeed, and really it doesn't work out for anyone when this happens. This is the reason I'm not in it anymore. Too bad, because I enjoyed it when I was allowed to do my job and profit from it.

I don't disagree with what you are saying. But you strike me as someone who had been in the game for a bit and understands it. That kind of competition, I can deal with it.

Your last point is spot on in my opinion. The big brokers, they hire anyone and give them 6 months to make it. No coaching, just figure it out. Those people are the ones ruining it, quoting everything to try and save their job.

 

[loaders]

When it comes to RFQs, we generally avoid them like the plague. For certain, long term customers we will go through the process knowing full well that we will not be successful. Within a few weeks most of the bid lanes are back on the spot market which tells me that the successful bidder could not move them. After 33 years in the brokerage business, it is my opinion that contract business is not a good fit for small or medium sized brokers. As others have mentioned, in this crazy race to the bottom, you eventually get to the point where no one will take your freight.

 

[Rob]

When it comes to RFQs, we generally avoid them like the plague. For certain, long term customers we will go through the process knowing full well that we will not be successful. Within a few weeks most of the bid lanes are back on the spot market which tells me that the successful bidder could move them. After 33 years in the brokerage business, it is my opinion that contract business is not a good fit for small or medium sized brokers. As others have mentioned, in this crazy race to the bottom, you eventually get to the point where no one will take your freight.

RFQ in subject line of an email usually means delete button around here unless it is from one of our regular shipper they will get a rate out of us but broker fishing ( rfq's) are not worth the keystokes to do it. IMHO.

 

[JACKBURTON]

RFQ in subject line of an email usually means delete button around here unless it is from one of our regular shipper they will get a rate out of us but broker fishing ( rfq's) are not worth the keystokes to do it. IMHO.

Sometimes feel like quoting randos at 60 cents a mile then saying truck is covered when they finally call back with the load.

 

[tasuinam]

Sometimes feel like quoting randos at 60 cents a mile then saying truck is covered when they finally call back with the load.

I can be your sister company that you would have double brokered it to

 

[JACKBURTON]

I can be your sister company that you would have double brokered it to

I prefer "partner carrier" thank you very much