RATES what is going on
- Thread starter H.Jordan
- Start date
The problem is Capacity is so out of wack right now carriers have no choice but to take whatever is available. What looks like a low rate to 99% of us will still be at least something to put into the carriers pocket who is just trying to survive with whatever they can get.
It sucks but the market will change... lets see when
It sucks but the market will change... lets see when
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It isn’t just brokers deciding to offer lower rates to carriers. It is primarily driven by shippers receiving lower rates from carriers. Any shipper worth his salt keeps his suppliers honest by occasionally asking for quotes from different sources. When those sources, carriers and brokers alike, continue to quote lower and lower rates, the shipper eventually demands that his incumbent supplier at least try and match these lower rates. This isn’t anything new or different. Too many trucks and not enough freight….guess what, rates go down. The exact opposite of 18 months ago….remember? No one said running a trucking operation was easy, or exceptionally profitable for that matter!
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I agree it is ahippers as well - I have receievd atleast two calls to see if I can match ridiculously low rates ... and we have been working with these shippers for over 5 years
It is also some brokers as well taking advantage of situation. this is very frustrating as a carrier. Cant let trucks sit, but cant loose money either.
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As most of the established carriers on this site will tell you, relying on broker freight for anything more than a small piece of your total revenue is not a successful business strategy. You must have a solid base of your own direct shippers. Companies where you have gone in, sat down face to face and negotiated rates that work for your specific operation. If you continue to use broker freight as your main source of revenue, you will soon make yourself sick complaining about rates. Use broker freight for a compatible outbound, or a convenient back haul, or a small LTL to top up your own shipments. As a broker myself, I know that many of my long term customers are getting called daily from desperate, frustrated carriers willing to drop their pants on rates, just to get their trucks moving. Don’t forget, you as the carrier, the supplier of the service, always holds the last card, you can say NO to low rates regardless if they are offered by a broker or a shipper.
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Load brokers are offering up low rates because someone already did the load for what they are offering. They are just looking to see if there are any more numbskulls out there. Prudent business if you ask me.
The real question is why did someone already take a load for that kind of money?
The simple answer is that they don't know any better.
Either a carrier with no concept of profit and loss, and an innate inability to read a financial statement, has decided s/he can work for that. Or alternatively, and most likely, it's an owner-operator fleet who's owner-operators use Driver Inc. drivers paid by percentage. The carrier makes their percentage. The owner-operator makes their percentage. The Driver Inc. driver gets screwed, but has to do the load because s/he either owes somebody something, or doesn't know any better.
Think about this ... Have you ever noticed the vast majority of these ridiculously low rate loads are done by immigrant fleets? Have you ever wondered why?
They simply don't know any better. It's not because they are stupid people. It's because no one ever told them differently, and there are others that take advantage of their ignorance.
I had a customer in the pickle business many years ago. One day I noticed that the little gherkin type pickles were no longer being sourced here where they are grown. They were being sourced from India. Naturally I asked why that is. The answer was flabbergasting; At the time the gherkin size pickle was being sold off the grader for around a $2.00 a pound. Sourced in India, the farmer was getting $1.00 per bushel, or $0.0238 per pound. It would take that farmer and his family all day to find and pick that bushel. ALL DAY !!! The man is feeding, housing, clothing his family and operating his farm on ONE DOLLAR A DAY !!!
Opportunity knocks, and this farmer gets the chance to come to Canada, get a driver's license, and drive a truck. Yes life is more expensive here than it is in India, but this man is used to living off $1.00 per day, so he's pretty frugal with his funds, and figures out a way to live in Canada for $25.00 a day. As long as he makes his $25.00 a day, he's satisfied. Unfortunately the man is completely unaware that he should be making $25.00 an hour and not $25.00 per day. Why? Because no one told him any different.
He's not fluent in English. He's not fluent in French. He's not fluent in Woke. The poor guy never stood a chance of being successful, or of even navigating the "Canadian Dream". Bottom line is that we (the collective "we") need to do a much better job of informing and educating immigrants instead of leaving them to flounder on their own and become so much fodder for the grist mill.
NOTE: Fair warning ... don't even think about calling me a socialist ... LOL
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BOOM ... Mic Drop !!!!
Well said old friend ... well said.
(And for those that don't know ... every one of those shippers that are getting the "I'll drop my pants" calls know full well that when the worm turns, as it always does, those carriers will forget that shipper ever existed ... until the next downturn in the economy.)
That is the exact problem - too many carriers who cannot let trucks sit. Right now there are way too many trucks for the amount of shipments that are trying to be shipped. The rates decline because trucks cannot sit and O/O, drivers and carriers just take anything to pay the costs. When this happens, carriers start to call shippers offering low prices because if they are getting low prices from a broker, they might get a few sheckles more from the shipper direct. This causes the shipper to go to their current provider and ask for less and you guessed it, the cycle digs in deeper.
To make matters worse, so many people are courting the shipper that they get the perceived notion that there are bargains to be had. If this many people are coming to me, I can set the price to whatever I want.
The other problem are brokers who get the loads with some notice (4-5 days) can post the freight and make the decision later. They don't have to take their best fit right away, they can wait until the last minute to get a carrier within their price bracket because there is always someone who will be available.
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Whenever this business get hungry... it tends to feed itself by eating it's own tail.
Brokers do it to carriers when there are too many trucks.
Carriers do it to brokers when there are too few.
This type of business model as loaders mentioned is volatile at best.
Find fair and honest people to work with... and limit your exposure to the gougers.
Brokers do it to carriers when there are too many trucks.
Carriers do it to brokers when there are too few.
This type of business model as loaders mentioned is volatile at best.
Find fair and honest people to work with... and limit your exposure to the gougers.
There is only one solution to resolve all of this, and that is to regulate the trucking industry once again.
NOT THE GOVERNMENT OR THE PROVINCES TRUCKING ASSOCIATIONS, an educated group that would establish standard rates,for every corridor,along with the Domestic and US/Canada weekly fuel charts that would apply, and then customers and freight brokers, can choose the carriers that provide the service, and the ones that have been surviving by butchering the rates, and customers settling with poor service for cheap trucking, will be slowly dissolved in an industry they should have never been in to start.
This industry controls the economy,and it is shooting itself in the foot.
Hope is the only word, and depending on our millennials,who sure as hell dont want to spend 3 weeks of the month in a truck on the road, to make a living...we will need the governing body to recruit and keep transportation on its feet....or we will be right back to where we are,with the butchers and service failures running the roads.
NOT THE GOVERNMENT OR THE PROVINCES TRUCKING ASSOCIATIONS, an educated group that would establish standard rates,for every corridor,along with the Domestic and US/Canada weekly fuel charts that would apply, and then customers and freight brokers, can choose the carriers that provide the service, and the ones that have been surviving by butchering the rates, and customers settling with poor service for cheap trucking, will be slowly dissolved in an industry they should have never been in to start.
This industry controls the economy,and it is shooting itself in the foot.
Hope is the only word, and depending on our millennials,who sure as hell dont want to spend 3 weeks of the month in a truck on the road, to make a living...we will need the governing body to recruit and keep transportation on its feet....or we will be right back to where we are,with the butchers and service failures running the roads.
Well now we know whoever has the working force is the ones who control any industry and the pricing! I think the OTA should lobby for a level playing field so only a certain amount of new canadians ( depending where you come from) should be allowed in any business model.
Question : Who would be qualified to be an Educated Group in Trucking? Never heard of such a thing!
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5
as a broker I can confirm we are losing a lot of money too.. a majority of the loads we make less than $100.
You only see this when the carriers aren't charging $5-8 a mile. Where were the calls for regulation 6 months ago? I am not one of the butchers most of my loads are paying the same or within $100 of what was offered previously because I value the relationships that I have, but there were no protections for the market when carriers were gouging. The only thing I had to offer was the fact that I wasn't going to kick you when the market was down, in some instances that was not enough however.
There are way too many variables that would effectively shoot this idea down, the existence of hotshots (USA primarily), ltl's that don't fit the typical size/dimension fields example a 40' sheet plate that weighs 2k you can load on top of this so how do you establish a rate is it based on the weight primarily or will you have to factor the size. Gravy ltl's being tossed on truckloads. The list goes on and on. Frankly the carriers running wouldn't oblige to this complete loss of autonomy either. I don't think that anyone doing this for any length of time doesn't understand that some shipper somewhere would offer "extra" for certain conditions effectively throwing this rate regulation out the window. As for putting people out of business, an open market will already do that...
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None they are all working daily. I have one parked but that is the spare.