The broker is sweating

Mega carriers don't make commitments on rates not profitable to their trucks and they certainly imo don't secure freight for a buck a mile thinking they can easily broker it all day for fifty cents. The freight has a better rate than a buck, probably much better, that is a given. Maybe not $2.50+ but no broker in their right mind would risk commitment at a buck a mile. Because there are people who think fifty cents pays for something they gladly take it and brokers are happy to oblige.

 

Exactly. Mega carriers have to pays the bills on all their terminals (gotta keep the lights on ya kno), Execs salaries, dispatchers pay, sales pay AND commision, mechanics pay, and dont forget they have to pay their drivers and the list can go on. Some only want to believe its all the megas fault when they need to stop and look in the mirror at whos hauling the cheap freight. Seems too many people wants an excuse to blame others for their own demise, and the megas are a big target I guess.

 

Yes but the megas that make $ 0.05 to 0.10 / mile profit are doing quite well.

 

Well, I could be wrong but I'll say this much... ...I sure would not like having a bunch of $1 or $1.50 a mile loads on my plate and be trying to shill them for 50 cents a mile... That would be one LONG day... I do know Bill mentioned to me once about some freight opportunity from Texas to midwest that was paying about $2 a mile and several big brokerages offered to cover that stuff all day, every day for $1.40

Can you imagine explaining day after day to the customer how you could only cover x number of loads and need to bump several of them to the next day if that customer thought they were paying decent money to get the job done? Now some of them may be ok with it but not all of them...

 

If you look at the public traded carriers their margins, % of the gross net taxable income is the standard grading of a transportation business, not net per mile. As is all business.

 

I hear about average contract rates for dry vans on various lanes at different times from a good source. Not ever been impressed yet. I know they are competitive, but come on, they don't have time to broker out 50 cents a mile garbage... Just the other day ago one of our drivers sent me an email with a list of email alerts for a load from I think IL going to PA paying in the low $2's a mile from various, cut-rate Landstar agencies... It was all of the usual suspect agency codes that have plenty of $1 a mile freight everywhere.. This one was unusal. What was also unusual is Knight Brokerage (Transportation) had the load posted for average 80 cents a mile more..... ....on ITS. So obviously this was a direct Knight load paying a decent rate but the dirtbags swarm in and double broker it making it garbage...

 

If a "mega" grosses 2.00 per mile and nets .05 per mile its return is only .025% and is not a sustainable return on investment.

 

1000 trucks @ 500 miles a day at average $0.075 / mile ( clear profit after all exspenses ) is $37,500.00 per day

 

1000 trucks, 2000 trailers, 1500 employees, plus real estate.........,not much of a return at all when figure the daily cost. You would never run a 1 truck business or 1000 truck, with a .0375% proffit after cost,including labor. Its a % of net from the gross. Its unsustainable. 5 years and done! Heard that story before.

 

Yes and thats why your not J B HUNT or SWIFT right !