Brokers, Please explain the plummeting rates these days.

Rank the following based upon business acumen:

A) Knowing your rate to make a load worth it and declining when a rate comes in below that
B) Again, knowing your rate to make a load worth it, but accepting one below that just to hope you make it past the squeeze
C) Knowing none of your expenses, your break even or even your fuel cost per mile so you take any rate going anywhere because “money is money”

“The laws of supply and demand weed out those who let it dictate their destiny.” - me, not a comedian.

 

The brokers that like to tell carriers how to run their businesses love the, "C" option. Esta numero uno mi amigo!

 

I love how it in a thread asking brokers why the market rates are dropping you call us liars for saying supply and demand. Then you go on to talk about how you aren't changing your rate but are getting less business right now, and will be in the no business club once your last customer moves on to a lower cost, same service carrier. and then you and KT strat implying supply and demand don't set your rate, you know the thing economist have said set rates for 300 years. But you two are smarter than all of them.

Guess what, regardless of your expenses and feeling, the fact of the matter is: there are less loads for more trucks. Hopefully you guys put up enough while rates were AT RECORD HIGHS to last through this down cycle where carriers who's costs are too high will fail, as the free market intended.

 

Just the way it is. Everyone loves to hate someone but won’t go out and do the work to not need a broker service. I’m sure if there were enough brokers they would be #####ing and moaning just the same when they get squeezed. Everyone loves capitalism until they are on the wrong end of it.

 

Make no mistake, we know the “why” in why the rates are falling. We’re prodding to see if a brokers’ mouth matches it. Most of the time, there is no match. However, you are correct in the statement that I’m not changing my rates and getting less business. No reason to wear my equipment out faster for less money. The less you’re willing to pay, the less I’m willing to run. There’s your beloved “supply and demand” you’re incorrectly grasping the mechanics of. My customers have all the opportunities in the world to move to lower cost, “same” service carriers. Since you know them and their operations so well, you’d know exactly why they make my phone ring. Lower cost and “same” service carrier my ### lol. I wouldn’t be rescuing loads these other carriers drop or can’t cover if that were the case. Or the time they tried using a different broker and paid bottom of the barrel rates and the customer continued to repeatedly receive damaged freight from improper securement. Or lack of care in securement. That would be the better statement.

Supply and demand does not set my rate. I do. Even when I’m perusing the load boards on occasion. If I see something I can run, I call and offer a rate. 9/10 times broker/shipper will say they cannot do that. Fine. Three out of that nine will usually call back as the day winds on to try and get me to meet in the middle. Two will usually end up at my rate. The rest I could care less about. Just as they could care less about me. Wouldn’t be on the spot if it didn’t need moved.

Now I don’t know you and you don’t know me, but I’ll let you in on a little insight. I’ve got a four year degree in Ag Econ. I know a thing or two about how a market works. However, how a market acts on paper or in someone’s head is not exactly how a market will behave. Trucking is not a straight commodity like gold, soybeans or oil. It’s a service. Now it’s a low barrier-to-entry service that allows for almost unlimited competition since de-reg, that’s for certain. But a service nonetheless. The only similarity between service and commodity is how they can be bought and sold: contracted or market rate.

Now, there’s ups and downs in this whole trucking shebang. Some years, like last year, are much busier than others. Other years, like this one and probably next year, will be much less busier. I do not let that set my rate. My rate is set by me. Will I be as busy as last year? No. Will I do the same work for less money? No. If it gets to where I get no business, so be it. But I’ve been in this since we were still hunting for Saddam Hussein. In all that time, many folks have run for less than me and some have run for more. Nearly all the ones who’ve run for more are still in business. The “run for less” crowd almost all are either out of business, got bought/leased on by bigger operations or joined the run for more crowd.

So guess what cupcake, regardless of your inexperience and your own misguided feeling, I’m still out here. Still averaging over $3.25 for every mile. Phone still rings. Bills stay paid. Account still grows. Why? Your precious supply and demand says I should be destitute and begging for work. Oh wait, I control what I work for. Don’t like it? Fine, we go our ways separately. But you jumping up and down, whining on about “load to truck ratio!” and “muh economists said!” does nothing but show your own failure to grasp what I try to lay down for you.

TL;DR I don’t haul cheap freight. The end.

 

Cool story, bro

 

Ladies and gentlemen, I may now pronounce:

He mad.

 

Not really, I don't understand what your story has to do with the rates dropping in the market over all. And I honestly think you are just thrying to start a fight, but I'm happy you have been able to continue to be in business since early 2010's and that you willing to make less as the rates drop. Also glad you have an ag econ degree and think supply and demand aren't real (I think that is what you are saying), looking forward to reading that ground breaking economic proof as I'm sure your alma mater will be delighted to know you earned a degree from them.

Run your truck, don't run your truck. Save your money for the down turn in the market or don't. I honestly don't care. But stop with the ######## stories on how you're a super trucker when your don't understand basic economic and business principals. Good luck, let me know when you're supplyless and demandless economics paper comes out.

 

My outbound hasn’t dropped a penny. The broker I was loading for coming back to the house dropped the rate $1500 in a week.
I deliver to a cold storage that he picks up from and what I hear from them is that they aren’t a fan of the cheaper trucks.