Brokers, Please explain the plummeting rates these days.

When there’s 2 cheap loads sitting on the dock and 10 trucks sitting empty at the truckstop then how long will those 2 cheap loads sit there versus when those numbers are flipped and there’s 10 cheap loads and 2 trucks at the truckstop?

 

Only a high end and a specific (special) service provider can try setting their prices firm in times of crises and hope their clientele to stay loyal to them. The reason is that nobody else or very few would know how to imitate what they do.
How can you specialize in something that hundreds of thousands of dry boxes are capable pulling the same way as you are?! Answer this and find the holly grail of trucking business.
Relationships? The ones I know to be effective are only those that were cemented either by bribe or nepotism or best both. Otherwise, they may last for some time after the rates crash, on the merit of excellent service, but then is it really true that someone would want to loose tens of thousands of dollars on monthly basis to reward loyalty to a few carriers who are still exchangeable?
You can set your price, sure, but will you find enough customers when everyone else is willing to work for half of what you want?

 

it won't. I am going to say it was the best explanation of supply and demand and yet, certain other members will argue with it that "see carriers set the rate not the market"

Although, based on this thread, we should expect to see the rates going down shortly since the price of Oil is dropping. I mean, if it costs less in diesel, we should see lower rates from these super truckers who "set their own rate, not the market" if i am understanding their argument correctly, lol.

 

The thing that a lot of folks are missing is that what is cheap to one guy might not be cheap to another. If you are financed to the eyeballs, and run 70+ everywhere you go, and just HAVE to be the first one up the mountain in your W900 (I LOVE W900s, but they aren't the best truck for most operations) or 389, your idea of cheap is going to be way different than the guy in a paid off truck that knows how to run efficiently. Just a few years ago, people would have fought each other on the docks to pull a load for the "low rates" we have now. It's all relative.

 

What if none of those trucks will haul the load because the rate is too low?

 

Seems there are many naysayers here that can't hold their ground. Just like accessorials. Can't hold your ground for that either. I get it. Really, I do. I bet those same people are bad at poker too.

The problem I have with people like that is they have to bring down the ones that are the opposite so they feel better about their lack of conviction.

For the record, just because someone does something you can't do doesn't mean they're generating more revenue than you. For some the bottom line is top dollars and for others it's being in full control of one's business operations.

Money isn't everything and when you're fully prepared to prove that and sit lost revenue is inevitable. However, when operating costs are so high the amount lost is very little.

It's better for many of us to take the downtime and do things in our lives that actually matter. Fun things and quality time with friends and family. So much better than running very expensive equipment into the ground for pocket change.

 

You and I both know that isn’t even a realistic possibility. I have a simplistic example, but really it would mean you’d need 80% of the available trucks to sit and those two loads would still move. I doubt it would even be an 80/20 split. You’d have a few competing for those two loads which would lower the rate even more.

 

My brother in Christ, you read my comment without understanding a word of it.

Do I control the demand for my services or the demand for the trucking market in general? No. Do I control how many other trucks I compete with or the rates their owners charge? No. I have one truck. I set the rate it runs for. Quite literally the definition of price inelasticity. I can only supply my one truck at one price. If I had 50 or more, yeah I could have a range of rates to work with creating elasticity on my end, but that is not the reality I’m working in or towards. Even last year there was only so much work I could take on and complete with one truck.

Now, in the grand scheme of things am I affecting much in the market? No. I certainly have to work the phone harder this year compared to last year. However, my concern is not the market and the goings-on it has. My concern is operating my business. Just as I don’t run the market, the market does not run me.

For all the McDonalds in the world, somehow Five Guys is still in business.

 

Two times out of ten.

 

The only things I’m doing different than most is asking for what I want. You will never get what you do not ask for.

If you do that, you’re miles ahead of most of the competition.