Dry Van Carriers, what are we worth?

[PatTetro]

With our trucking industry finally seeing an increase in freight, I believe we can all agree, that rates need to increase for our trucking companies to be profitable again. Many suppliers and freight brokers took advantage of our trucking companies and we’ve been hauling freight for rock bottom prices. Things are heating up, I believe it’s time for us carriers to get on the same page and quote rates that can actually make a profit. I’m not advocating for us to quadruple our rates and screw our suppliers, but I am looking to educate myself, my fellow carriers, and brokers here … so we can all be on the same page.



We all have our own opinions, strategies and there are many factors that can contribute to the cost of running a truck, but if I may ask your opinion … for carriers hauling dry van freight for a long-distance trips over 750 mile rounder, nothing super time sensitive, I mean strictly your regular dry van product that’s worth under $250 000.00 Cdn Funds, what would be your LOW, MID and High range rate per mile be?



I’m willing to offer my personal and professional opinion of 22 years of service in this industry, with the increase of costs (Equipment, Driver wages, Staff Wages, Fuel, Insurance, Running Authorities, Carbon Taxes and other miscellaneous costs) … here’s what I believe carriers need to succeed, this is a Per / Mile rate in Canadian funds, starting from home base and ending to home base, excluding extra charges for drops, waiting time and other unrelated to transportation expenses. Just strictly “Per Mile Rounder Rate” for regular dry van freight in Canadian funds.



Very LOW – Basic Cost of running a truck and trailer (No overhead) = $2.00 per mile (Anything lower than $2.00 / Mile, you are losing money)

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• Low - $2.15 / Mile (just covering costs, but not getting ahead)
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• Low to Mid - $2.25 – $2.35 / Mile (most companies are probably aiming for this right now, but it’s still too low)
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• Current Target Rate - $2.30- 2.50 / Mile * I believe it’s lower than we should be doing it for, but I believe that most carriers who want to stay in business to be aiming for right now, given the current market. I also believe that but we should be aiming to increase it by mid-2024.
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• Target Rate for 2nd Half of 2024 - should be between $2.50 and $3.25 per running mile
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• High - $3.00 - $4.00 per running mile rounder would be terrific and if you are getting it … I’d like to work for you?
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• Most people forget the amount of liability we carriers take on, the moment we load up the product we own it, we face potential claims on freight, fines if we’re late, have to deal with nasty weather, potential accidents on the road, updating our operating procedures for DOT and government regulations, we pre-pay for all of our drivers fuel, tolls, expenses and wages, yet wait anywhere from 30 – 90 days to get paid, and normally get screwed out of thousands of dollars from non paying customers every year. If cost of running a truck and trailer itself is $2.00 / mile, how much should trucking companies be charging above to help cover their costs of overhead, loss of payment and liabilities?

Please let me know what you think?

 

[MLCAR]

Carrier here and I agree with the sentiment, but the real problem is over capacity. In a stagnant/declining economy, having a surplus of competitors will drive prices down. My customers feel it, their daily PO's are not as many as it used to be, so its natural for them to look for costs savings where they can, transportation and logistics is usually at the top of that list. "If i'm not selling, I dont need to produce, If I'm not producing I don't need to order etc etc." In all parts of that supply chain trucks are involved and again "if I'm not receiving or shipping well I don't need a truck". I'ev seen large enterprise carriers reach out to us looking to see if we have loads they can haul...Its a sign of the overall market. Yes your costing and rates are very realistic and pretty much spot on, but when you have large carriers that will run at below cost just to whether the storm and keep up with their payments rates will dip, then you have the mid-size fleets with not as much capital runway also compete with lower pricing again just to keep up and stay afloat and finally there's the little guys the mom and pops or single O/O who at cant do anymore and park their trucks and work for someone else, rates continue to nose dive. The 2020, 21 and 22 high's are what caused this, way too many trucks jumped into the fray, now its a waiting game for capacity to continue to leave the marketplace. I believe a record 800+ MC's have voluntarily exited just last week! There will be more in the coming months and level out in the summer that's when things should get better.

 

[Freight Broker]

Just my two cents worth..with a box you might want to pick a lane and focus on heavy LTL. I know a guy who does nothing but Houston, TX to Calgary, AB.. back and forth..LTL both ways..empty miles zero.. drivers love it..no bouncing all over the map. Another carrier that does this is Tricorp out of Alymer…Toronto to/from Dallas..When you’re all over the place pulling a box you’re going head to head with the big guys who have much deeper pockets..

 

[TRC604]

I'm also noticing an uptick in rates.

A lot of these smaller carriers are going out of business or have already exited the market. More opportunities to say no to the cheap freight. Hopefully 2024 will be a year of recovery for us carriers financially.

 

[Rob]

Just my two cents worth..with a box you might want to pick a lane and focus on heavy LTL. I know a guy who does nothing but Houston, TX to Calgary, AB.. back and forth..LTL both ways..empty miles zero.. drivers love it..no bouncing all over the map. Another carrier that does this is Tricorp out of Alymer…Toronto to/from Dallas..When you’re all over the place pulling a box you’re going head to head with the big guys who have much deeper pockets..

All good if you want to base your business of the whims of brokers but carrier's such as myself (very small 13 trucks plus warehousing operations) have a book of customers and we go where they send us. That has given us the lanes we are in on a regular basis. We started with running Wisconsin broker freight back in early 2000's and worked are way to a book of our own direct shippers and find that to be a better way in the long run, Broker freight is too volatile to rate swings to be sustainable over the long run IMHO.

 

[EricG]

Thank you for the valuable input, its been a good read!

 

[Freight Broker]

Shipper direct freight is great..until…your customer wants you to run 20 loads to Camden, NJ and your 13 drivers want to go to Norfolk, NE. I don’t think it really matters if its broker freight or shipper freight so long as the money flows in. None of us wants to be beholden to the whims of any one entity, be that a broker or a shipper. The folks who run 100% broker freight have more flexibility to switch lanes around to suit driver preferences and hiring. As a broker I also, obviously, deal direct with shippers, and one disadvantage of that is that I‘m at their beck and call 24/7 although not so much anymore because no one of them represents more than 10% of my sales. One lane and 200 freight broker customers who feed that lane ain't so bad… the bank doesn’t care so long as the cheques clear..And no one says you can‘t go after direct shippers in any event. Main point (to answer the OP’s question) is ONE lane, lots of small customers.. zero deadhead miles...whether those small accounts are shippers or brokers doesn’t matter.

 

[EricG]

Shipper direct freight is great..until…your customer wants you to run 20 loads to Camden, NJ and your 13 drivers want to go to Norfolk, NE. I don’t think it really matters if its broker freight or shipper freight so long as the money flows in. None of us wants to be beholden to the whims of any one entity, be that a broker or a shipper. The folks who run 100% broker freight have more flexibility to switch lanes around to suit driver preferences and hiring. As a broker I also, obviously, deal direct with shippers, and one disadvantage of that is that I‘m at their beck and call 24/7 although not so much anymore because no one of them represents more than 10% of my sales. One lane and 200 freight broker customers who feed that lane ain't so bad… the bank doesn’t care so long as the cheques clear..And no one says you can‘t go after direct shippers in any event. Main point (to answer the OP’s question) is ONE lane, lots of small customers.. zero deadhead miles...whether those small accounts are shippers or brokers doesn’t matter.

Reminds me on how ServiceStar Freightways in Bradford grew their operation.... Ontario <-> Colorado, for years it seem they only ran that lane, and did it extremely well. Their rates are on par any other top notch carrier, and the service really shined through!

 

[Trucking18]

Farmers blocked highways in Europe - got what they wanted- Truckers in Europe did the same. Truckers here ? We been running 2 years at a huge loss per mile and lost our shirts and sanity. 2.50$ a mile Minimum to cover costs in my books, anything less you are loosing unless you have older paid off units.

 

[artmax]

Farmers blocked highways in Europe - got what they wanted- Truckers in Europe did the same. Truckers here ? We been running 2 years at a huge loss per mile and lost our shirts and sanity. 2.50$ a mile Minimum to cover costs in my books, anything less you are loosing unless you have older paid off units.

the main difference is you push people in Europe again the next time they revolt is with guns.

they kinda understand that if you allow a leader to single-handedly take away your weapon, freeze your funding, and label you a terrorist on a whim isn't really democratic.

 

[JACKBURTON]

the main difference is you push people in Europe again the next time they revolt is with guns.

they kinda understand that if you allow a leader to single-handedly take away your weapon, freeze your funding, and label you a terrorist on a whim isn't really democratic.

Maybe next time around no truck should put a wheel into Ottawa. Keep it nice and quiet there for everyone.

 

[Igor Galanter]

@JACKBURTON: You're a grown man and still believe in a fairytale?

 

[JACKBURTON]

@JACKBURTON: You're a grown man and still believe in a fairytale?

Strange things do happen, from time to time.

 

[Michael Ludwig]

Farmers blocked highways in Europe - got what they wanted- Truckers in Europe did the same. Truckers here ? We been running 2 years at a huge loss per mile and lost our shirts and sanity. 2.50$ a mile Minimum to cover costs in my books, anything less you are loosing unless you have older paid off units.

Try that here and JT & Co. will put you in jail.

My Soapbox:
The industry problem is more than just too many trucks. There's also an economy that is on the ropes resulting in a marked decline in disposable income. There's a government that is in tatters resulting in a severe reduction in investment. All sorts of industries are in a holding pattern, waiting for a federal government change. If it changes, investment money will come back. If it doesn't, investment money will go away for good, as well as a number of existing manufacturers will pack up and go elsewhere.
Not to get too political, but this country is in trouble boy & girls ... big trouble.

 

[PT INC]

honestly not seeing a enough increase in the freight as we should, and most of these brokers are still trying to pay next to nothing on lanes there's only a select few who are legitimately decent brokers, most are still ass holes trying to move freight for way below the avg.

 

[Freight Broker]

Usually, but by no means always, behind a cheap broker is a cheap shipper. And these cheap shippers come in all shapes and sizes. Usually the bigger ones are camouflaged in "corporate speak".. i.e. we care for our employees and vendors.. blah blah. At least the smaller ones tend to not do that... I learned very early on as a broker that sales is not about finding customers... it's about finding GOOD customers.. that may seem self evident.. but if that were the case we'd all be saying a big NO to some of the (so called) opportunities that come across our desks. NO is only two letters, but probably the most powerful word in the English language.

 

[MLCAR]

I learned very early on as a broker that sales is not about finding customers... it's about finding GOOD customers

AMEN TO THIS!

 

[AgentSmith]

Just my two cents worth..with a box you might want to pick a lane and focus on heavy LTL. I know a guy who does nothing but Houston, TX to Calgary, AB.. back and forth..LTL both ways..empty miles zero.. drivers love it..no bouncing all over the map. Another carrier that does this is Tricorp out of Alymer…Toronto to/from Dallas..When you’re all over the place pulling a box you’re going head to head with the big guys who have much deeper pockets..

Tricorp is a good carrier and awesome in that lane

Airgroup in Vancouver used to build consolidated LTL / PTL loads to deliver to the south, mid west and east coast USA; they pick up in Metro Vancouver all week and depart Fri / Sat.

After they shut down no one has filled in that niche, Twin Pol does some of that work but not to the same extent. You can still move PTL loads as carriers will take what ever they can but this will change when the economy picks up.