New Pay Package

The difference, Bright One (and you are), is that this change is potentially structural. A penny for this a couple cents for that is almost meaningless (as Joseph says) because they can cut you off and starve you out at will. You have no recourse other than to move along, little doggie. A structural change in which truckload carriers pay for your time while loading/unloading is big news.

Really. At least potentially. Forcing other carriers to step up.

Especially carriers with debt that makes it more difficult for them than Heartland. Soon to be debt-free again Heartland.

This is really very, very shrewd. Cutthroat, too. The American way.

As you very correctly point out, a driver somewhere else may make more, or less, than at HTLD/GTI. Guarantee you Gerdin's phone has been ringing off the hook and he and Steve Gordon will be pummeled in the back rooms of upcoming truckload carrier functions.

"Just what the Hell do you think you're doing????"

I'd like to be a fly on the wall there, too.

 

This was a concerted effort by Heartland Express to attract more drivers. Swift started this a few weeks back by raising their pay, and other carriers followed suit. GTI/Heartland did this because Swift and other megas did the same thing. This was not a "Come to God Moment" for Mike Gerdin, who calls all of the shots. Steve Gordon did not make this decision as it isn't his money to spend anymore.

 

Okay, I peeked (usually do, just here's a for once I can agree with him).

Joseph's right here.

Don't underestimate Steve Gordon. He guided Mom and Dad through the awesome build up over the last few years and had the smarts and timing to get out from under the debt acquired.

But, yes. Gerdin calls the shots and has made the Gordons much richer and a lot quicker than they ever would have trying to pay off their debt with, what was it? 94% costs out of 100% revenue.

 

The Qualcomm message announcement was signed by Steve Gordon.

 

I'm sure Gerdin has made them some money, but GTI was a succesful outfit on their own. They didn't need Heartland. They chose to get out. Heartland needed GTI because they needed to expand. The PNW is an interesting market to get into because of its unique challenges. It also opened Canadian lanes for Heartland, something they didn't have before. And the one hour detention will have caveats as well. If the customer is willing to pay that accessorial pay, then its all good. If not, then there will be no detention pay. Truth is Vic, that GTI opened up quite a few new streams of revenue for Heartland. A Refridgerared division plus heavy haul, which, I'm almost certain will be a thing of the past for them.

 

The problem with huge debt is that you're at the mercy of Big Banks. And I mean mercy. What was that 1,000-seat firm that folded here back recently? Forget the name right now. (Remembered: New Century.)

Currently, interest rates are really, really low for top tier borrowers. That'll change. It has to and interest rates will rise.

I well remember 'disintermediation' during the Volcker/Reagan years, a term which meant that Big Banking made more money lending money back to the government in the form of Treasuries than lending it out to consumers and corporations. Interest rates from banks soared above 15%-18%. Banks got richer and richer. Remember the 'trickle down' theory?

Can you imagine how rising interest rates will squeeze Swift, for example? Nor do I get the impression that HTLD/GTI is saying that you get detention only if the shipper/receiver agrees to pay. My interpretation, and it's no more than that, is a bold move that pays you after one hour.

As it should be and should have been all along. No workee for free.

If so, it could shake up the truckload segment, big time. Think of the benefit to Heartland if this results in a sharp downturn in recruiting costs and turnover.

 

Unless things have changed in the past few months, trade-ins are "planned" around 400K-500K miles. Some go earlier, some later. Any more than that and the value/return calls off sharply. I never heard anyone operating an 800K miles truck as a company driver.

 

It was my first choice but they couldn't get me home, so...no reefer for me. Waaahhhh.

 

Perhaps companies are beginning to understand that they gain more by minimizing downtime while the HOS clock is running. It might even get miserable shippers and receivers to tighten up their process. They're the one having to pay, I bet.

I used to get so irritated by the Jewel DC in Chicagoland. They were a union shop and closed ... CLOSED ... Between 10 am and 2 pm. If you got there at or after 10, the guard wouldn't even let you in the gate. And they did not allow parking in-site. Try finding a parking spot at that time of day within any kind of range. And even getting there on time, many times I sat there in a dock for hours waiting to be unloaded. And all I was carrying was water!

Detention would have been nice then.

 

New Century was a different situation. Think Jevic a few years back. Same deal. Jevic and New Century should have been profit monsters, and for the most part, were. Bad management put an end to that. Go back to Arrow Trucking. One of the biggest and most profitable flatbed outfits in the country. Belly up because of greed and bad management that weren't there before.