Cutting the Rate/Rate Cutting.....Lets dig into it

Then you have my carrier ( type ) . He has 4 in house divisions, trucking , wash, repair, storage and he has and will sell me out ( rates ) to feed the other children.
I think that's wrong, you can't be everything to everybody. But he wants to be.

Now here's a strategy that I admire , some years back i worked for a chem mfg with his own fleet. Customers were tearing up his bottom line with driver delays and other BS so here's what we did,

1) Looked at and calculated a "hassle factor" for every customer. This included driver delays, late payments, delivery restrictions and length of haul.
2) Looked at this customers total business across all divisions
3) Looked at his longevity

Then we created a 4 tier pricing schedule..........and the best customer got the best rate based on his "score"

AND

We ended up not renewing about 20 contracts. Even though we made a little money off these folks, they were not worth the "time" it took to service them due to tight delivery windows, late pays and general complaining. The "time" was eating up any profit so they were actually pulling our bottom line down with intangibles . Things you don't normally count like the billing supervisor "stuck" on the phone every month with the same customer. Another kept rejecting our invoice because a tee wasn't crossed, another would hassle the drivers by blocking the dock or no one to sign bill and then wouldn't pay without signature.

We should do the same with our shippers. Quit worrying about the check at the end of the week, make a profit on every mile / move, yes?

JMO

 

I have a couple of brokers that have called and asked if I would haul loads for them. Some being for Kraft.

I giggled when she told me it was finalling out in Hopkins at SuperValu dry.

My rate doubled and she said that's not going to work.

A little while later she called me back saying she got close, but couldn't meet my rate. I had decided to jack the price up another $1500.

She about came unglued.


Told her she can thank the Teamsters and Brian at SuperValu for the high rates. Brian is the receiving clerk there and been more of a hinderance than a help getting good service.

 

When pricing rates I take a number of factors into consideration. Timely payment is a big one. There is one broker that I agreed to allow them to pay me within 30 days. It went well beyond that time. I will no longer haul their freight due to the delay in getting paid. I have better things to do other than having to call someone about a bill every few days. The company was given good service. I have had their people call on several occasions and have told them that they are on our no haul list. They are surprised when I tell them the reason. This is a big company, but they pay slow. I don't move freight slow and I don't expect my pay for my bill to have delays. I can avoid both by not hauling their freight.

 

I have a similar customer.

Play games with invoicing, no more hauling.

And some brokers don't understand.

 

One thing to keep in mind when a broker fails to pay as agreed in their contract. If the broker doesn't pay as agreed then they have breached the contract. If they breach the contract then there is nothing that they could legally do to prevent you from back soliciting that particular customer. Most broker contracts have a back solicitation clause. When the broker breaks the contract then it voids the contract. I am not suggesting that anyone back solicit, but when the one who designs a contract breaks it then the terms are void. That means that if you so choose, you can solicit that customer to haul their freight and there is little the broker can do to recover any damages.

 

Since brokers are supposed to be bonded. If they don't pay, do you get payed by the bonding company? How does that work?

 

Must be a dry thing there then, or perhaps product based. I used to go in there several times a month. Plenty of parking before and after unloading and I really can't recall a time when I got held up for anything. Other than insane lumper costs, which is a StupidValu norm, StupidValu in Hopkins is one of the better ones.

 

All of these "capitalistic, free-enterprise" concepts sound good. But in the real world, we have large companies stacking the deck in their favor. They work in collusion to make the market work in their favor. This is not only in trucking, but in virtually all industry. Is a corporation a person? Our erudite supreme court recently said it is. However, most people have a soul and conscious, corporations do not. They thrive on profit, at whatever cost.

This is what makes the entire discussion fruitless. This ( http://cdllife.com/2012/top-trucking-news/trucking-alliance-pushes-agenda/ ) is a perfect example.

Sadly, most truck drivers are against unions, and understandably so. Unions can be corrupt. However, if drivers do not make any effort to speak up for themselves in a united manner, the corporate trucking companies work together, in spite of being competitors because they realize working together gets more accomplished. Why cant drivers see the larger picture?

So "cutting rates" is what Walmart did to put small local businesses out of business. Was it fair competition or against a stacked deck? Same thing is happening in the trucking industry. The ATA is our walmart.

 

It's not quite that easy.

When you set up with a broker and when you book additional loads with said broker you usually place a call to their bonding conpany and berify their bond and ensure that it has not been used by anyone else.

I always found that when I didn't get paid on time that a quick call/inquiry to the bonding company would bring an "immediate" call from the broker ensuring payment. There's no reason to turn a customer down if they are a slow/late payer>just charge them accordingly. We can all take a minute to make a phone call and if the freight works and makes you money why would you say no.

 

You can file with the bonding company if you don't get paid. It is about as easy to just file a lawsuit. Fortunately, I have not had to file on a broker's bond, although I have threatened to do just that on a few occasions. I don't have much of a problem with collections because I check out anyone who wants us to haul a load. I had a broker call about a week or so ago to haul a load. The broker said that we were set up with them but could not find a load we had hauled for them. Time was critical. The rate was decent. They wanted me to get a truck on the road heading to the pick up while I was checking them out. I finally decided to not take that load. Unless I have recent experience with a broker or shipper, I take the time to check their credit before hauling anything for them. The broker wasn't particularly happy, but I don't regret my decision. This is not the first time something similar has happened. I would rather lose a load than take a chance on losing money on hauling something for nothing.

If you file on a bond you just need to make sure you have all your paperwork in order. You will need to call their bonding company and they will tell you what you need to do. OOIDA can also help you to file on a bond. Most likely you will need a copy of the rate confirmation, signed bill of lading and possibly the contract that you signed with the broker. I believe there is also a form you must fill out and file with your claim. Since I have never had to file a bond, I am speculating. The best thing to do is take the time to check their credit. I assure you that when you first sign up with a broker that they will check your authority, insurance and safety record. Unless you take time to check a broker out then you are taking a risk. Even if you file on a bond you may or may not receive all of your money. I prefer to stop a problem from happening rather than trying to correct something after the fact.