Industry Viewpoints

[snafu]

I saw this posted elsewhere and well, perhaps many of the younger generation have experienced their relatives dealing with this over the years and with the internet and social media today...they're that much more imformed of what many in this industry experience...

"Dispatch tells you to get to the customer for 9 am and get loaded. You leave the house at 6 and get to the yard. Do your pre-trip, load your stuff up and start driving to the customer. You're there at 8:30 being the good driver you are and wait till 9. At 9 they tell you wait half hour for a door. 10:30 and you're still waiting. At 11 they inform you that you're appointment isn't till 12, come back then. Turns out at noon everyone's gone for lunch, come back at 1. At 1 they give you a door. They load one skid on and go on break at 2:30. At 3 you go back inside asking wtf is going on? You are informed that they're making the product and are going as fast as they can, it will be ready any minute now. 4:30 rolls around and you get a green light. All excited you go in to grab your paperwork, unfortunately it's not ready yet the girl who's responsible for the bills is on break. 5pm you get your bills, close the doors and you're ready to roll. You look down on your gauges and notice that you're extremely heavy.

Off you go to the closest scales only to find out that you're 2K over weight. It is now almost 7pm, and you've gotta head back to the shipper. By the time its offloaded, bills are fixed and you go back to re-scale its 9 pm. You've technically been working for 14 hours and got paid for the 30 miles to get to the shipper (30 miles x .40 = $12) and $20 for a pickup if you're lucky. 14 hours of work and you've made a grand total of 32$, minus the 8 dollar sandwich you picked up at the truck stop lol

Now you're fed up, tired and that's half your problems. Time to get the paperwork ready, head for the border
and deal with that headache. Not to mention that if you want to make it on time for your delivery you have to drive all night and falsify your log book.

I wish the above was a made up story, but majority of the guys here can back me up that it's a reality. The idea that drivers work "more hours" is an understatement. If you add up all the hours you work and divide it by the salary truck drivers don't even make minimum wage most of the time."

 

[Jim L]

"Dispatch tells you to get to the customer for 9 am and get loaded........

Although the story is exaggerated; it does prove the point. I don't think that too many carriers will put up with this particular scenario more than once without payment for detention but definitely a couple hours, or overweight, or lack of proper paperwork is common.

The problem in our industry is that we fail, on a whole, to monetize issues like demurrage. The shipper in this situation is the one that should be charged for the assets for the whole day. Unfortunately the shipper most times will not pay and the carrier, or load brokers, count on the customer. The carrier and ultimately the driver ends up losing out in the end.

The only way this will ever change is if freight sits on docks because there is more freight than carriers. Then, and only then, will customers pony up and either change their practices or pay for the downtime of all the assets involved.

 

[whatiship]

We should probably start another thread, but I have always said that the biggest problem in our business is not rates. By that I mean "base" rates. The biggest problem is the failure to collect on or make the customer understand the additional charges that may occur. In our haste to quote and get the business it is sometimes easier to not mention the "what if's" and hope they don't happen. Or to assume that the customer will agree and pay if they happen.
Rates from A to B are usually fine if everything moves without a hitch. But we know that doesn't always happen.
Showing a new customer a complete list of potential accessorial charges should be standard procedure. Having it signed may make it easier to charge down the road when it happens. Customers need to understand that a rate quote from A to B is just that.
Proper charging for the extra's will make a huge impact on your bottom line.
However, we are all guilty of not wanting to bring up negatives on a sales call and scare them away.............

 

[Michael Ludwig]

@Jim L There is more freight out there than there are carriers to take it. The market's been that way for quite some time now. Just ask your shippers how much of their freight is getting to where they want it on the day and time they want it there.

The biggest problem with this industry is that someone will always do it cheaper ... no matter how much they have to lose to do it.​

Some months ago I ran across a situation where another carrier cut me a new one on a lane. I got lucky and was able to find out the competition's offered rate. I figure myself to be fairly knowledgeable in this industry. I have a pretty good grasp on what freight goes where, and roughly what it's worth. I know what trucks cost and what it costs to operate them, and because I do it almost every day, it's fairly simple to figure out whether there is money in the deal or not. I tried, and tried, and tried to figure out how he could do it for the rate he offered. There is no possible way, based on a revenue and expense model, that this guy can make any profit ... heck, he can't even break even ... every load will lose money. Obviously the next step in the process is to dig around a little more, and think outside the box. Here's what I found out ... buddy is utilizing a 5:1 trailer/tractor ratio, working for $1.57 a mile, fuel included ... he's paying team owner/operators $1.12/mile, fuel included. Everybody is making profit on the deal except that poor O/O who is taking a huge bite of a crap sandwich, just to say he can own a truck ... at least until GE Cap comes to take the truck back.

Every time big business chooses to select carriers based on lowest price only, without ever giving a single thought to the carrier's viability, they are cutting their own throat. Someone works for free today and goes broke tomorrow, they expect the next guy to do the same ... they EXPECT it. Eventually big business is going to run out of "next guys" and they are going to run head long into the TransForce's of the shipping world, and by then the TransForce's will know that they are the only game in town and big business is going to bleed like never before.

There is no glory in saying "I haul for XYZ, Inc., largest manufacturer of widgets in the world.", when you have to sit on the street corner with your tin cup just to feed your family.

Just hope I live long enough to see the day ... LOL

.... and that's my rant for the day (so far)

 

[Jim L]

@Jim L There is more freight out there than there are carriers to take it. The market's been that way for quite some time now. Just ask your shippers how much of their freight is getting to where they want it on the day and time they want it there.

The biggest problem with this industry is that someone will always do it cheaper ... no matter how much they have to lose to do it.​

There may be more freight than carriers on a particular day, or a maybe for certain type of product requiring specialty transportation (flatbed, reefer) but on the whole, I disagree, there is more capacity than freight. If the carrier that you described in your post could get other freight paying more - they would. We all bump into the carrier that somehow, magically, can haul for very little and we all wonder how they make it work.

I have asked potential customers if delivery dates were an issue. For the most part they say there isn't an issue and most are happy with the carrier/broker arrangement that they have. For the odd one that does mention problems, I find that they are expecting too much and wish to pay too little for the service they demand. That also is a problem in our industry.

I do know that if my phone rang off the hook for people looking to move freight back and forth to the areas we wanted to move to, the price would go up and I wouldn't work very hard on trying to get freight from other customers. I would pick and choose the freight I want.

The final question would be, would the customer still be able to afford to move their product at the cost the carrier wants.

 

[MikeJr]

Overall I'm an optimistic person, that being said sometimes you just have to be realistic (like in the attached).

Keep well,
Mike

 

[theman]

Yup -- you could have 2 of the 3 but never all 3.

The trick is knowing which works best for what customer -- and the sandbox that you can play in when considering this.

Capacity versus freight situation depends on the lane -- but supply/demand on any given lane is pretty elastic. This is not a market where we can just name the price and get it necessarily ... maybe the odd time when someone is in a pinch, but that's a game where you're chained to your phone and desk all the time. Continuing business is definitely not like that.