With fuel prices going thrue the roof and freight prices headed to the basement I would like to know WHY DO WE HAUL CHEAP FREIGHT.

I recived a letter from THE ENERGY INFORMATION ADMINISTRATION in
Washington DC. that stated the national average for DSL fuel will reach between $3.10 and $$3.37 per gallon by the end of summer, which made me wonder why do so many Owner Operators execpt $0.98 per mile, when they should be earning twice that. Dont they understand that if they keep going the way they are going that in a very short time they will run themselves right out of business. So I thought I wuold put the question to the forum, and maybe some of my fellow Owner Operators can answer the question, CHEAP FREIGHT WHY DO WE HAUL IT.

To find out what the weekly DSL fuel prices are Call THE ENERGY INFORMATION ADMINISTRATION (202)586-6966

Here they will let you know what the National Fuel prices are for the week
they update every monday of every week by 4:00pm

__________________
The more you know The more you grow.

I don't know why others haul it, but the place where I work doesn't. I have been very actively tracking income and mileages since the first of the year as part of the preparation for buying my own truck. Basing it on the HHG miles, and the fee we are charging for the load, and without figuring in any form of fuel surcharge, there average per mile number for my truck has been 3.23 cpm to the company for the work. Figure in the fuel surcharge at 17%, which is where ours tends to average out, and the price swing up to almost 3.75 a mile.

Of course, figuring in the actual miles vice HHG drops that down some, and then you have to figure in the emoty miles that pay nothing to get to the real figures. But some companies are hauling in a more specialized area, and make decent money from their customers.

My suggestion is that your question should be reworded a bit to be "Why do the van and flatbed companies hul cheap freight?". I see more cut throat competition and price cutting which leads to cheap pricing among those two types of trucking than I do elsewhere. Some of the problem is the mega carriers have trucks moving, and they just want to keep them full, regardless of whether or not it pays well. Make enough money churn around, and keep a small percentage and it is still a large amount. And, inm most cases they are getting by quite nicely with very low costs for labor. No doubt, a driver running around for 42 cpm is getting underpaid for the effort he puts in running 2500-3000 miles per week. As for the guy getting 26-34 cpm, he isn't getting enough to turn the ignition key.

Bottom line, as long as they can fill the seats of the trucks with people that will drive cheaply, then they can afford to chase cheap freight.

Another thing you need to consider is the companies that do truck rail are also keeping the freight down. eg JB and Swift.

They will pick a load that averages .80 cpm and put it on the rail and show a profit, then the shippers will expect to pay the low costs to all the carriers but the legit company won't touch it...

I don't understand why building materials doesn't seem to pay squat. There is always demand for the stuff. Must be all the illegal aliens willing to haul it for peanuts.

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Z-Lady's devoted hubby.

When we call on a load if its a .98 cent load., ie cheap load, we just put that broker on our list of blank you brokers. If no one uses these cheap skates that are trying to squeeze more greedy profits off the truckers then they go under and we all make good money, its that simple.
If you use these brokers, its your own fault, no company can rail or move it all cheaply, everyone has to stick together so its stuck to them, not to us! Thank you

I myself agree 100% with H&S.

I own 2 trucks and the trucks are showing a profit VS what was happening to the company while fighting for higher rates and FUEL moneys from brokers.

Tell yah what, start a BAD BROKER list and stick ALLEN LUND, and CH Robinson at the #%(@ing top of it!

2 trucks SHOULD GROSS out around 18,500K Not including deductions on FUEL, PLATES, DRIVER, TAX and ( PM ) which any O/O should take something for.

But A friend of mine who I talk to DAILY has 4 trucks that dont even GROSS 10,000. AND thats all 4 trucks!!!!!!!!!!!!!!!!!!!!!!!!!!!
The brokers are ALWAYS looking to make more off a load than they need.

Lets say we haul a 100mile load. LOCAL, WE should charge / et no less than $300.00 for that load. That good / OK.

But the way the brokers are all working nowa days we would be lucky to get 1/2 that because the brokers ( KNOW ) their are trucks willing to pick up their fright with a HEAD haul at that LOW ### rate. Which kills us LOCAL / REGIONAL companies.

It's all a BIG GAME..... .. .. .

All the best,
Matthew

PS,
I REFUSE anything under $2.00 Per mile, or It better Pay CLOSE to with 100% FSC to my trucks!
PSS,
I own my trucks. TITLE and ALL. ( I can Afford ) to let a truck sit. Most guys cant!!!

I agree with all of your reasons for the cheap frieght problem,because there are many. But the biggest is that people haul it to begin with, Why anyone will load frieght and not make a profit is beyond me. I am so disapointed with the Industy as a whole,with high feul,now with Mexican Trucks getting ready to cross the border. Which by the way will drive frieght rates down more. How are we to build a profitable business?
I believe we have got to figure out a why to stick together,and stand up against these companies and brokers that are sucking us dry like leaches!
The best way to get the rates back where they should be is not use the cheap brokers, if they can't get the frieght hauled for a cheap rate only two things can happen the rate will go up or they will go out of business.
Both case's we win!

I have a select few brokers that I deal with regularly, they ask me what I need then go to the shippers/receivers and fight for the rate. they are very open about they're commissions and have even dropped below their 10% minimum from the really cheap shippers to keep my numbers as high as possible.
I will haul the cheap loads at times.. my minimum is 90 cents per mile and it better be light, I use LTL freight when needed for this reason, usually pays better with little weight.
I have found that there is no possible gain from deadheading... the miles, fuel and equip are still used. a cheapie will usually pay you're operating minimum, (mine is 80 cents per mile) and that beats nothing hands down in a trucking world with 3 dollar a gallon fuel.

Some of us do understand this, some of us want think leasing on with a big will help.
Regardless of the situation and mind set, the rising fuel cost can be blessing for our industry, whether you initially want to realize it or not.
For those who strive no higher than per mile rate, and that being .92cpm so be it, I can bet that if you would for an honest %, even as low as 65% with there trailer you could do better....
When I started doing it this way, I personally saw an increase in pay (by the way that was back in 91 ) and even now with my own stuff going on, fuel is not a big deal, I have customers who pay a premium, we are there, and they pay a fuel surcharge.
Some of guys need to quit making the companies you lease to money and start making some yourself....It's there....basically for the taking in most areas...for most freight.( by the way for those who have read my previous post, only about 35% of my hauls are specialized, ie. end dump, hoppers, etc., the rest is straight ##### freight)

Get your Authority, get your brokerage, and bang on doors in your area, YOU CAN DO IT!!!!

Thats why I'm looking for O/O to work for if I can find one that has a Broker authority. I work part-time as freight agent but got fed-up with the dis honest brokers. So I would like find O/O work for where he/she could make money from their trucks and brokerage par t of the business.