So called owner/operators

Where did I say anything about hauling for nothing?
That said, Allied and PTS whoreized the business. The days of hauling for Mother Ford at "cost plus" went the way of the Bronco and Contour.
A company has to negotiate wisely and not shoot themselves in the foot doing so.
Case in point, Cassens managed to survive the nightmare of 2008 and is still thriving today. There are less than desirable areas that must be serviced along with the gravy.

 

Maybe I was misunderstood with my earlier post, I never said I wanted my contractors to lose money, however, when you sign on with a carrier instead of having your own direct contracts you agree to their terms, one of which is most certainly to run where the loads go even if you don't like that area, especially if you sign onto a carrier with dedicated work. Not going to a particular dealer is the irregular route broker board mentality, long term contract success requires taking the good with the bad for both the carrier and their contractors. If you don't like where your carrier is sending you then you are free to find another carrier, simple as that, but you have to realize you give up a certain amount of control as soon as you put someone else's numbers on you door like it or not.

I am not independently wealthy, we only have 5 company trucks and 3 contractors, so we bid our work carefully but still I will send a contractor on the longer hauls as they can do it cheaper than I can after I pay workers comp, salary, benefits, and operate the truck, so they can be profitable even though it is an undesirable area, plus if I don't take the fringe areas I don't get the gravy areas to share with my contractors. If I don't have the gravy then I don't need the excess capacity contractors provide and they are out of work all together.

 

Easy guys no need to gang up. I just don't want this segment of the industry to be like the rest. Yes dealers need to be serviced. Yes we all need to make money. But remember we are in a specialized segment. Which means we still have a bit of barginng power. Remind the contract holders that it's not that easy to replace us and to pay us what we re worth. Not alot of guys have the ability to go out and buy a 10 car tomorrow and start hauling.

Is it me or does it not make sense to sign long term fixed contracts where all our expenses are variable? Yes all loads are not gonna be " gravy" but that doesn't mean they have to be #### either.

 

Everything you supply for your employees, the contractor has to provide for himself. You still get your cut, whether they make money on the run or not. They pay the expenses, insurance, etc and have to set money aside to cover vacations, sick time, etc.

In other words, your thinking is flawed if you assume they can do it cheaper just because they happen to be the one driving the truck. What benefit is it to the contractor to take the undesirable loads allowing you to get the gravy runs if the only gravy they are ever going to be offered are the ones you couldn't cover with your own trucks? The gravy ought to be distributed evenly throughout the fleet. Most don't mind a mildly profitable day mixed in with a few decent days and a gravy day...makes for a pretty good week. If you can't bid high enough on a run to beat my break-even point, I don't care if I've been running gravy all week, it isn't worth my time running for a loss. If the best I can expect is to break even, well I can do that sitting on the couch.

 

Believe me I don't want this segement to end up like general freight either. Safly it is already too easy to buy a truck and start hauling cars, very few good accounts exist anymore that a third party provider has not become involved with, cutting revenue for all of us. Add to that the freight guys coming into our segement and bidding like it was freight rates and the customers start expecting cheap rates. I want my giys to be profitable as well, without them I loose capacity and a broke trucker is not doing the best job nor representing my brand in the best way possible.

 

I'm not saying you have to lose money but if you signed the contract you have to honor it. If I were to only pay you when I felt like it then you would quit and drag me into court so fast my head would spin. All the OP was commenting on was contractors who cherry pick their lane when the agreement requires everyone to run all lanes not just the short ones or good paying ones.

Yes, a one truck o/o can run for less than I can, in addition to salary I pay 15.3% payroll tax and 14% workers comp, neither expense is shared by a 1 truck o/o.

Lastly, why would I want to share my gravy with someone who wasn't also willing to take a less than desirable run as needed? Being a team player goes a long way with being treated well, otherwise our industry segment will end up just like the freight segment. And, why is it ok for the carrier to run loads at a loss but to ask a contractor, who agreed to the terms of the contract when they signed on, to run a break even run is forbidden?

 

While you are only required to pay 1/2 of the employment taxes for each employee, the contractor covers 100% of that tax for himself...both the employer's half as well as the employee's, since he is both. The contractor may even pay the same (or more) in occupational accident insurance, unless he chooses (and is allowed to per state law and the contract he's operating under) to take his chances without coverage. And let's not forget that you're operating your trucks off of 100% of the gross. You're taking a cut out of the work the contractor is doing, so they have a much tighter budget on which to operate. You get paid whether they make money or not. My truck is my only source of revenue. If it doesn't produce, I don't get paid...and I don't work for free. EVERY time I fire up my truck, there needs to be a good chance I'll have a profitable day. If the best you've got to offer is "break-even", well, like I said, I can break even sitting on the couch.

As the one bidding on the contracts, the carrier has the power to say "that isn't enough" and not take on an unprofitable lane unless a higher rate is offered. As the one holding that power, YOU should be the one eating whatever losses are to be had running that unprofitable lane if taking on that unprofitable lane was part of the deal YOU worked out.

The contractor only has control over what HIS truck does, and the only way he can affect the rate is to decline running for crap rates. If you don't want YOUR trucks running for crap rates, bid those lanes a little higher next time so that they'll be profitable.

 

Yup. Too often guys bid on stuff just to say they have it. Or just to keep guys running. I have a definable cost of operation which I refuse to operate below . Now my profit margin is negotiable once I get to it but I'm not in this to just to keep wheels moving.

So to they guy that said I don't know anything about the business earlier.. I don't agree with cherry picking but it's not up to me to make up for a low bid. Keep in mind if a damage or catastrophic failure happens on one of those " favor " or " take one for the team" runs just how are we gonna cover that?

 

This thread was about refusal of a certain area not low bid. Bottom line is if the truck owner does not like the Carrier rules, get your own authority. Then you have a choice.

 

And the reason the guy refused the run was because it was a crap rate to a crap area. Still kinda relevant.