Authority Operators need to standup against this broker market and warehouse workers!!!

Especially those on contract freight or those who never worked the spot market have this self conceived idea that they can be in position to command rates when they get their own authority. They think that their rate will be nothing else but a function of distance, weight, commodity, disregarding the most essential ingredient of the rate which is the number of trucks in the area competing for the loads on the same lane.
They will find themselves in rude awakening with their formulas and their profitability logic, especially in times likes these, when they - for example - try to find outbound freight from Baltimore, MD getting them back to Midwest.
I always say that it is ONLY the Market conditions dictating what rates they will haul for and the other way around. They can toss their formulas, ideas, convictions, business wisdom out the window and embrace reality of "either you take it the way it is, or you sit there and wait for better days to come".

 

Are we talking about trucking in general or just van freight?

 

I am not too sure where they pay 1 dol per mile other than the North West going south to California but the idea of hauling 1 dol per mile - or otherwise cheap enough to make a man cringe - is the that this cheap freight takes you out of the area where they don't pay any better than that anyway and unless your time and deadhead is worth more than that cheap hauling provides than you will deadhead and go for ZERO per mile, which does not get cheaper than that.

 

This applies to anything and anywhere where there is no monopoly on the services offered. If you offer unique type of services in your part of California, you might be in a place where competition is negligible - so may be under illusion is that you can command rates, but if you haul a dry van in the Midwest, the reality is that you can argue for your rate all week long to no avail.

 

Exactly,
When I think about Chicago - Baltimore, I already assume the worst case scenario which is - indeed - 1 dol per mile backhaul and anything above is a bonus.
Going from Chicago to Baltimore for less than 3 dol per mile / $2500 is out of question.

 

I'm not likely to have a truck much farther east than Winnemucca and even that is a rarity. I like it that way.
I was just curious about whether all your figuring was specific to a particular kind of trucking.
We have competition here but not to the extent that the spot freight guys do.
I don't use brokers but our customer base is relatively stable and well established. It's easier to track costs that way.

 

I am confident to say that the spot market is a model example of how the free markets work in the aspect of supply and demand. So if they teach Economics 101 where they show those intersecting supply and demand lines - where the intersection point determines the market price, they can have freight spot market as their case study.
Those who enter the spot market often have it backwards. They are all well prepared with their cost analysis which will further determine their rate and thus desired minimum profit margin but they don't realize that the market price for their services is an independent product of market forces that they don't have any control over. Instead, they should look for rates fluctuations in the past and how they formed with relations to freight volumes, diesel prices, equipment prices, etc. Generally speaking, the spot market is a place where someone should start calculating their profit potential from what is considered cheap. They should assume "cheap" to be the rate they will have to work with for the most time.

 

When fuel is pushing up to $6/gal, dollar loads aren't cheap- they with put you out of business. Doesn't matter how many people are chasing the same loads if they are all $1.xx. I have zero debt and I can't run at the current rates- I can't even imagine how those that have payments due every month are surviving!
You talk about other legs of legs of the trip... I think I understand what your point is, but I can't find $5/mi loads lol- All I find a 1 to low 2's and those low 2's get me in locations that have no backhauls unless I deadhead 200-300 miles.
So I don't understand how other a surviving on those rates. I must be missing something.

 

Not very long, just under a year now.