Why oh why are you drivers taking this cheap freight????

Discussion in 'Ask An Owner Operator' started by codyschmidt, Nov 26, 2012.

  1. 2tone

    2tone Bobtail Member

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    I am a broker, and not a low balling one. I do most of my loads out of Ga, Ms, and La. All of my customers pay fairly well. Now none of my loads are flat beds so I would not know the first thing about that. But I do a lot of poultry and plastic. And I get good rates out of that area. And I pay my trucks well.. I think a lot of the rates has to do with the brokers. When a broker works for a large company such as Tql or C.h the competition within the company is bad that the broker is forced to pay as little as possible. When you work for a smaller company as I do, you are able to get more customers which allows you to pay the truck more. I hope that makes since. Not all brokers are crooks. I personally stay away from any shipper that does not want to pay decent to move their loads. They can sit on it for all I care. But most of my customers pay 2.25-2.75 which I try to make 10-15% off the load and give the rest to the truck
     
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  3. EZX1100

    EZX1100 Road Train Member

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    so you are saying that you make 10-15% on 2.25-2.75

    lets round that off, $2.50 @ 12.5% or $2.18/mi to the truck (vans, i presume)
     
  4. 2tone

    2tone Bobtail Member

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    EZX1100--- Yeah I guess thats about what I am saying
     
  5. EZX1100

    EZX1100 Road Train Member

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    32cpm on every truck aint bad, you are making about what a company driver makes on the load, per truck, with less than 1/10th the work

    if you have brokered 10 trucks for the day, you make the salary of ten company drivers, and you get to punch out and sleep with the wife every night
     
  6. Working Class Patriot

    Working Class Patriot Road Train Member

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    Well Yeah....Better than what we had in late '08 in Cali....$5/G fuel and Outbounds....We were lucky to see $1.20/m.....

    Fuel is the greatest cost to an O/O btw....Last year....My fuel bill was $70,000.......

    And I don't have a lead foot.....Fuel is too effing high....Period!!!!
     
  7. Crazy D

    Crazy D Medium Load Member

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    Ok 2tone. I run Gainesville to Chicago. Poultry of course. The rate doesn't seem to be anywhere near that. Id be interested in talking with you. I figure most brokers get between 15-20 percent. 10% isn't really worth the time or the paperwork.
     
  8. crackinwise

    crackinwise Medium Load Member

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    I made this post in another thread but works here too:

    What I have learned is that there are more market forces at work in this industry than most drivers realize. When it comes to rates there are threads all over this forum about why rates are low and how they can be brought up. Most if not all of those threads blame brokers for manipulating the spot market and offering low rates and keeping the difference for themselves.

    First let me say I am sure there are brokers that will try to take advantage of carriers but it is not all of them and Id bet it is a small minority of all brokers. That minority would not generate enough market power to pressure overall rates downward. So there are other market forces at work. Supply and demand is the obvious one too many trucks and too few goods equals lower rates and too few trucks and too many goods will bring them up. Brokers do play a part as they are also trying to maximize their profits but there is another force at work and it is something that any single O/O can not compete with on any level.

    Large carriers have the advantage of being large and able to use those numbers to be able to haul at cheaper rates than small time O/Os. But its not all about hauling freight for the big guys. Do not forget that these large carriers are also publically traded companies listed on the major exchanges. They are beholden to the stock holder and they will do what it takes to make sure the stock price is impacted in a positive way. It is all about Earnings Per Share (EPS) and Margins. So how do they haul freight for $1.20/ mile??? They can haul cheap freight because, unlike all of you, hauling freight is not the only way they make money. If you ever did a lease purchase program from a large carrier you know first hand how they make money in other ways. They take their used trucks and get some driver with questionable credit to chase the dream of becoming an O/O for no money down. Then run that driver into the ground so that after assuming all the risk of that used truck they get to a point that they can no longer afford the lease and walk away. The large carrier got all the payments, which is mostly profit for them, and maintenance covered on that used truck and in the end get the truck back so they can lease it out again or wholesale it and make money again.

    When you can make money financing loans on your used trucks hauling freight becomes easier to do cheaper and still make a profit for your shareholders. Its all about the shareholders and those predatory lease purchase programs actually translate into lower rates of freight when you connect all the dots. We have all heard and used the phrase " Everything We Use Is Delivered On A Truck". Well that means there is a huge market in Interstate Commerce and very big market forces much greater than some broker trying to make an extra $300 is what manipulates the rates.
     
  9. 2tone

    2tone Bobtail Member

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    I mostly do poultry. Pm me and ill give you my nimber and we can talk
     
  10. HwyPrsnr

    HwyPrsnr Medium Load Member

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    1/10th the work? I have to disagree. Have u ever tried to get in on direct freight? Its not easy doing the sales thing. Wife did it for a while. Put her in a VERY bad mood every now-and-then. Sitting and arguing on the phone ALL day long trying to get the right rates in the right locals. After 2 years she told me where I could stick that job...lol. I also highly doubt he gets 10 loads per day either. Just my 2 cents. Be safe out there drivers.
     
  11. EZX1100

    EZX1100 Road Train Member

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    talking on the phone, even if its an argument does not equate to what we do, but mental stress can be more stressful than physical stress

    but they have no log books, or 4wheelers, etc to deal with, they dont have to stop after 10 hours to complete a deal

    no, i have never been a broker, though the wife will be looking into that very soon, if its as bad as you say, she will be telling me to stick it somewhere also
     
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