saying NO to cheap freight

Because they don't know you nor the service you provide, so why would they pay top dollar for a no name truck driver? I'm just asking cause I have no clue how these things work.
I would think after you built up a professional relationship and prove yourself with no claims and on time service would be able to charge more for your services.

 

In the real world it just doesn't typically work that way, sounds good in theory though. Once you set a rate whether it be with a broker or a shipper, you are pretty well capped there for the foreseeable future. Rate increases with existing customers are something that takes years to accomplish. When a load has to move, and it's a choice of putting it on a carrier that they have not worked with before, or the broker giving it back to the shipper, what do you think the broker is going to do? Remember, the broker wants to keep that shipper, so he is going to put it on the no name truck at that trucks rate. It's a leap of faith for them, and the odds are stacked in their favor that the load will be delivered on time by doing so.

 

Whether broker or direct customer: the ones that want freight moved cheap-want freight moved cheap. Doesn't matter by who.
you "get your foot in the door" by undercutting the cheapest guy they have and when you want to raise the rate so you can be more profitable, they aren't looking to pay you more: they are looking for someone that moves it cheaper than everyone else.

If you can get in somewhere based on being the cheapest: they'll be gettin rid of you as soon as someone else is cheaper.

 

To add on what Oscar and Ruthless said, which is spot on, you don't give someone a price and then decide later it's not a good enough price and try to get more money. They'll get pissed off and find someone who's happy with your old rate. They'll wonder why all of a sudden the old rate is no good anymore. You did what? You came in and agreed to haul it for less to get the business and now you're asking us to pay you more because you're not happy with the rate? It makes you look like a chump that doesn't even know what you need. It'd be comparable to hauling a dozen of the exact same load for a broker at a rate of a thousand bucks, then all of a sudden that broker says to you, "I'd like to make more money off of you so the new rate is now eight hundred bucks. I only gave it to you for a thousand so I could get you to cover it. Now I need more money from you". You'll be labeled as someone who doesn't know what rate you need and are wishy washy once you've agreed to something. Don't waste people's time not knowing what you need. Don't be wishy washy. Make a quick agreement and stick to what you said.

 

Now that doesn't sound bad at all.

 

Now according to that rates would never change. Which I know is crap because I use to pull for a dedicated account and every year the contract got renewed after rates were discussed.

Now when you guys say $3/m is that $3 + FSC or is that including FSC? Cause that changes that rate by quite a bit.

 

Incorrect!

 

We're talking about spot market freight here working with brokers. Not contract. There is a difference between the two. Yes rates change all the time with random trucks booking loads. I'm talking about having built relationships with people rates should not change drastically in that case. Fuel fluctuates, of course. But when you're working load to load on a week to week basis on stuff that just pops up, not that much. If there was a huge spike in fuel from one week to the next then obviously that's a legit conversation to have with the broker. I'm just speaking from my own experience here and you did ask.

When I say $3 a mile it means $3 a mile all in rate. That has the surcharge already built in it. That's how brokered freight works. You agree to a rate on the spot and the fuel surcharge is all inclusive in that rate.

 

Cheap freigjht is a relative term. I agree that an owner needs to know his costs to operate the business, both fixed and variable. That is where the cents per mile comes in handy, or rather $1.xx per mile these days. The national average for all trucking to operate a commercial motor vehicle (class 8) is $1.68 per mile. If $1.68 per mile is the average that means there are some companies that operate for less and some for more. I would venture to say that those with paid off trucks, that are well maintained operate in the $1.25 to $1.50 per mile range. So they can take freight in that range, which I would consider cheap, and make a profit. Many of these operations run local or regional and only need to make $400 to $700 per day, whereas I need to make $700 to $1000 per day to keep operating and make a profit.

The bottom line is know your costs to operate and make decisions based on that cost. Also, know the freight lanes and don't get sucked into cheap freight areas unless getting paid well to go there in the first place.