I agree, USHIP sucks.

Ehh, why waste my time?

It seems every O/O interested in commenting on this is determined to destroy their own future.

 

In any market, prices are set by supply and demand. The fact is, there's an oversupply and insufficient demand. However, unlike water in a city water system, where the water flows to simply wherever the demand is, trucking is not a unified market. The fact is, many who supply reach a tiny, restricted market, and many who demand... have the same problem.

In ANY given day, there's trucks meeting each other on the same road, each on a deadhead run ... On from city A to city B and the other from city B to city A. Both are raising their expenses, to get to a load - and there's loads right where they are, but neither the supplier nor the purchaser has knowledge of each other.

Does Swift and CR England and Knight routinely do this? No. Not if they have a competent dispatch and planning system.

But O/O are constantly doing it. Why? Because each has access only to his narrow market - and the purchasers have access again, only to a narrow slice of the market.

There's a guy on the internet that makes rubber tires for cheap, battery powered toy cars that stopped production in the early 70's. Why? Because he now has access, cheaply, to a massive, international market, even though the number of buyers is some number which has a lot of zeroes to the right of the decimal point, in terms of the portion of the population.

What has brought about the conditions the trucking industry is in? First, it was demand for transportation. Railroads slowly began to give way to trucks in the 50's and 60's, because railroads are a high cost, high maintenance, but cheap tonnage system that goes a very restricted number of places. The railroad simply cannot afford to maintain a railway that moves one truckload a day, each day, to a remote town over a 50 mile road that doesn't go anywhere else. But a truck can.

Independent truckers, to a degree, ruled the roost for quite some time. But no more. The big companies take advantage of economies of scale, and the efficiencies of logistical coordination - so that they don't send empty trucks to pass each other on the road.

The tools provided by modern communications - more accurately, the LACK OF THESE TOOLS - is what's making the independent trucker becoming less and less important. The majority of freight is now moved by the most efficient tools, who, of course, bid to the lowest price to get the contracts, because they're ubiquitous.

If you didn't understand business, you'd think that eventually, there would be ONLY ONE trucking company left, with a complete lock on all truck moved freight. But that won't happen unless the government makes it so. Why? Because while size brings advantages to production... size beings INEFFICIENCY TO MANAGEMENT. The fact is, every truck has a driver. Every truck must be managed by a person, who makes decisions. This need to manage individuals, and the fact that the quality of individual will have an outcome on the ability of the organization to produce the product ( in this case, move stuff from place to place), the larger it gets, the worse it's managed. It's why there's bottom feeders who constantly recruit and then spit out the failures. Nobody has the ability to manage the quality of person hired, other than specific metrics (driving record, etc), because management can't hire enough people they can trust to make those decisions.

The fact is, if you can buy Campbell's homestyle chicken soup at store A for $1.10, store B for $1.49, and at store C for $2.29 cents, sales will gravitate toward store A... Unless store A cannot consistently supply the product (the shelf is empty most of the time), at which point, sales gravitate to the next higher supplier.

And thus it is with owner operators. Some are operating in markets with a huge oversupply of providers, and are failing big time. Some operate in markets that don't, and are thriving. And they may even be travelling the same cities, states, roads, and moving similar things. But each is experiencing different outcomes and market conditions. Because they have isolated themselves to a small market. Not by choice, mind you, but by the technologies in use and the market forces.

Thus, one trucker posts that he's going bonkers with business... the next one is going broke because he's got nothing.

And, along comes people blaming the bad conditions they see on "stupid truckers, brokers" etc.

The technological tools that can make it possible for the O/O to compete efficiently with the big trucking firms with huge logistical planning exist. But you can't be everywhere. But 10,000 TT, Hot Shots, ST's, Refers, etc, all operating in a transparent market? You CAN compete with the big guys, but it involves giving up the mentality that you have to protect your tiny market from invading "low rent" competition. In exchange, you get to be more efficient, as busy as you want to be, and good operators willing to work will crowd out the bad guys.

The fact is, that independent people are going to continually lose ground until they decide to use the tools that the big guys use and become competitive. And, bad operators and those who make bad choices, are going to get shaken out. Supply will decrease until demand is matched and rates are sustainable.

And, inefficient, badly managed big trucking firms? Big bankruptcies. Or liquidation. Or consolidation into even bigger bankruptcies.

But as long as the only market players who will use the most modern efficiencies are the bigger players, then that's who's going to get the business.

 

Are you real sure on the numbers?

I have not spent much time there, but I'd like to think I can spot the legal and illegal (flagrantly) ones, or at least the professional and "not professional" types, and who I saw bidding was mostly legal. One illegal is too many, I'm just commenting on the numbers.

 

Yeah, RickG, I"m so stunned with what I wrote that I signed myself up to run for president.

It's ok, man. We all have to have our own POV, no matter how myopic.

 

No matter the sarcasm in RickG's commentary, he makes a really good point... One too many here (including himself) then proceed to ignore. One I pointed out in my post, but I guess it was too tedious to read - that price is not the only determining factor, that delivering what you promise is actually more important.

After all, the point of my post was that the big guys are not insurmountable competition, and neither are bottom feeder illegals or guys who run themselves broke. And, anyone with a little business sense will know that already. Which is why I felt it unnecessary to mention.

I offered an idea, the use of a technologically sophisticated, TRUCKER OWNED AND ORIENTED marketplace - in other words, the opposite of UShip in focus - which offers the possibility of decreasing the inefficiencies I noted above ( And RickG didn't bother to even attempt to refute), and increasing both availability of both providers and consumers as a means of assuring independent O/O futures as competitive to the mass shipping market as the big guys.

Nowhere did I say that price alone should or does direct sales.. .it influences it, to be sure, and prices are driven by supply and demand.

The problem we have here, is that the independent has little demand flexibility. He can't "see" the whole market, merely the tiny slice of it he's managed to cultivate relationships in, and in times like the last 5 years, that narrow vision can be catastrophic, if you can't weather the sudden disruptions in your markets or cultivate new ones.

What RickG is ignoring, is that what I'm talking about INCREASES aggregate demand, which, while it may lower the rates a little for a few, it will generally RAISE rates for the majority, by taking market from those who would never otherwise use independents because of their lack of ubiquitous presence and ability to fulfill needs in excess of the number of individual relationships they've established ( usually, it appears that consumers that are large enough tend to contract to big guys, or use brokerages to handle that - and that slices and dices the pie up even more, leaving less for you).

Brokers and aggregators function as what the financial world would call "arbitrage". In simplistic terms, it would be tank truck that buys fuel and resells it doing nothing other than leveling price / demand fluctuations. Brokers get paid handsomely for what could be done without on a signficant scale.

I just happen to be convinced that there's at least a few who feel threatened by the concept of competing in an open market. Real businessmen thrive on competition. Sales people hate it.