How trucking used to be and where it is today

The way it used to be in trucking



Yesteryear

Not too long ago trucking used to be fun as well as profitable for all parties concerned. The shippers made money, the broker made money, and the trucker made money. What was not to love about this environment. Most everybody treated each other with respect and dignity while understanding the fine delicate balance of profitability, service, and working together for the common good of all parties.

The shipper would locate a broker or carrier that would offer them a discount for their services, it usually broke out as follows.

Shipper Cost: X$ per mile

Broker discount to shipper: X$ per mile minus 5%

Carrier discount to broker: X$ per mile minus 10%
Carrier discount to shipper: X$ per mile minus 15%

The shipper would then in return mark up their cost by 10-15% and list it as shipping and handling charges to the end customer (receiver).

In this environment each party received what was rightfully theirs. But alas good old American greed entered in and this is what is going on today.


Current Times

As time has went along Corporate greed entered into our country and the motto became make the most money you can and don't worry about who you hurt to do it. We no longer are a nation that looks after each other, we only look as to how we can get over on each other. The shipper no longer cared about the broker, or the trucker, because they had learned that they could pay less and get more. They started with their own employees, once they were successful in getting their own employees to fall for the trap, this in turn lowered their cost to do it themselves. Now this became the ball of crap that started rolling downhill until it hit the bottom. Once the bottom hit it becomes harder and harder to rise to the top. Shippers were no longer happy with paying adequate prices for good service, they just wanted to increase their bottom line. They started pushing brokers to get the loads cheaper and cheaper and told the brokers, we don't care what you sell the loads for as long as you get us cheaper rates. The brokers and truckers followed suit, the next thing you know is you have brokers cutting brokers to get the cheap freight, truckers cutting truckers to haul the cheap freight. The bottom just keeps getting bigger and bigger until hardly anybody but the shippers know what the real rates should be. The brokers blame the shippers (which there is a certain level of truth in that), the truckers blame the brokers (and there is a certain level of truth in that) but in the end confusion is the master of greed. Here is the break out today:

Shipper Cost: X$ per mile (this has went up not down, Labor cost up by 1.5, new equipment cost up by 3, insurance cost up by 2.5, fuel cost up by 7, maintenance cost up by 5, taxes up by .05)

Broker discount to the shipper: X$ per mile minus 15% (or more)

Carrier discount to broker: X$ per mile minus 15% (or more)
Carrier discount to shipper: X$ per mile minus 30% (or more)

Looks like the only one really winning is the shipper. In this type of environment the only way the broker and trucker make more money is to move more drugs (miles, loads). Who do you think pushed for deregulation in the first place? Do you think those little guys that started OOIDA did it? Do you think the brokers did it? It would take a lot more money than that to lobby Congress, and get Jimmy Carter to sign off on it. They had a president and congress that despised Unions and this was they right time for them to make their move, along with the unrest in the trucker ranks to ease up on one getting their authority so the little guy could have a shot at the American dream. The end result is that the little guy is getting squeezed out by the Corporate American Greed and the cycle will go back to where it started.

The future of trucking

It can go two ways, I will describe both and you can decide which one you like.

1. We the independents truckers and brokers start working together like the days of old. We quit blaming each other for the problem and fix the problem. We need to understand that each and every party needs to be profitable to include our end customers the shippers. We need to quit operating in debt and desperation. We need to hold solid to our rates even if it is painful, we need to reach out and help one another instead of laughing at the failures of those to the left and right of us. If we can do this with a quickness, we may actually salvage our industry from the sewer pit that it has become. If we don't than we will fall into option 2.

1. Corporate Greed continues and the death of the truly independent trucker and broker will occur. Over the past few years the popular thing has become to offer Power Only to carriers that have their own authority either by bigger shippers, carriers, brokers. Now this looks good on the surface but you are taking the majority of the risks, and now are just a glorified lease operator. The independent brokers are being absorbed by the bigger brokers due to the recent bond increases. This drove the small Mom and Pop's out of the game, many of you cheered when the bond went up. Now who are you cheering for, your allies were killed off and the only thing that is left is:
   

• A. Shippers that are starting Logistic Arms and brokering or offering Power Only deals
  
  
• B. Mega-Brokers that have very little to no skin in the game
  
  
• C. Large carriers that are brokering or offering Power Only deals

Why is this happening? It is all by design, now it has taken over 35 years to get to this point. I remember reading a brief while in the Army about how to control the American Trucker and the freight that they hauled. You see they were really scared the last time the truckers got together and started parking, they were ill prepared for the ramifications that were occurring. Now with the art of confusion acting on their behalf they pretty much control the truckers at will. This is the military and corporate strategy as to control the last dying cowboy or free spirit in this country:

1. Confuse the truckers with irregular rates and a controlled fuel surcharge
2. Break their spirit by Re-regulating them to the point that they are under such a burden to add to their confusion
3. Discourage them from talking amongst themselves as to keep communications controlled
4. Extend their working day while limiting the amount of revenue they can make
5. Raise their taxes so they are paying more than they keep
6. Watch every move they make in order to be prepared for the next strike
7. Convince them that it is Unpatriotic to revolt against the system
8. Get them to sign an agreement for their CDL that if they refuse to drive the truck by government orders that they could be tried for treason
9. Keep them in debt so they have to keep on working for the system

Now this looks very much like our country in general, break the free-will of the people by convincing them that their security is more important than their freedom. We are not only the last stand for truckers but the last stand for all Americans. Don't fall for the lies that have been told to you, stand up for yourselves, stand up for others, stand up for America.

In ending, I realize that most of you out there think I am a wackjob conspiracy nut, or some kind of religious nut-job. I swore an oath in 1986 to defend the Constitution from enemies foreign and domestic, I see more domestic enemies in our country than I have ever seen foreign. I am not asking for bloodshed, although Thomas Jefferson said “I hold it that a little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical. “

The Love of Money (Greed), is the root of all evil

What does it profit a man to gain the whole world but lose his own soul (freedom)?

We are all afforded the right to freedom by God through the Constitution of the United States, why then are we so willing to just give our freedom away?

Good luck to all through this hard time and hopefully you will learn to work together instead of bickering amongst yourselves. This is a call to brokers and truckers alike, we must work together freely or we will end up working together by force.



Alfred Jordan

Powerhouse Transportation

NSDQ

 

That's the way I remember it as well. The bulk side of our industry is taking a beating right now, because so many guys jumped in after the frac sand went away. They are slashing prices left and right, there is not any loyalty left from shippers/brokers to the truckers. These guys are learning the hard way, I warned them last summer that it was coming. My company is doing fine, but I am seeing the same thing starting to erupt on our dry van side as well. This is a warning to freighthaulers, the frac boys are jumping into your arena as well. They will cut the prices of the freight up so bad because they have to make payments on all those nice trucks and trailers that they went and bought when the oil was booming. You better get ready, cause here it comes.

 

When I used to post the numbers, I got tired of being hated on by all the guys or gals that thought I was full of crap. Now I have to use the algebraic formulas so that those who believe they are intelligent will now have to prove so.

I was getting lambasted earlier in my post of whether to shut down or slow down. I noticed that after I responded to those individuals questions that they have not responded back. I am here to help educate, not prove how smart I am. I love trucking, and I love to fight for the underdog. I make a lot of money doing other things beside trucking, this just so happens to be my passion.

 

There is still lots of freight compared to the quantity of trucks to haul it. But the trucks that are hauling it are acting like there is not. I understand why the shippers/brokers sell it to most of us cheap, because we will haul it. My lease operator told me that he was talking to a couple of owner operators in Denver earlier and they were hauling loads at $1.00 per mile. When he asked them why, they told him that was the best they could do. He told them he was moving out of Denver at $2.00 per mile, they all thought he was lying until he showed them the rate sheet from the customer to us. He also showed them that he came to Denver at close to $3.00 per mile. This is a dry van we are talking about. I heard the brokers tell me over the last two days that freight was tight in Denver, so as you can see we asked for more to go in, and got what we wanted to come out.