The rates are down…what's to come?

There is a lot less freight on the spot market (leftover market) do to the price of oil. I know you don't think you haul oilfield but the lack of drilling affects everyone, including steel shipments, cat engines, construction equipment, travel trailers, man camp mfg., even auto makers, a lot less new pickup are being purchased, food service, (less business in small town restaurants) construction materials, and on and on.

The slowdown affects almost everyone, which puts more trucks looking for freight, it is a brokers market, after the give loads to their regular carriers there is less to post and they can offer loads for less and someone will take them.

While everyone enjoys cheaper fuel we need oil to go up to the 70 - 80 dollar range which means 3.25 to 3.75 fuel, just a small jump in demand for trucks will raise prices. If business continues as it is today it will help cull the heard which is not a bad thing.

 

Trucking is cyclical. You have ups and downs. The downs shed capacity, and the ups add capacity until it meets demand. We just went through a long up period, and like Old Man says, the oil collapse is fueling the down period. The one man show o/o that operate on the spot market get killed during these times, unless they have enough set back to weather the storm. Have fun

 

2008 was the best year of my entire career. 2009 was the absolute worst. 2008, the fuel surcharge on general freight was near $1/mile. 2009, fuel prices dropped and freight rates went into the dumps. The bigger companies started cutting the fat. I received a message over the Qualcomm saying that they were cutting the fleet down and if there was any questions to contact your dispatcher. So, I called my dispatcher and asked if I had just lost my job. She told me no...everyone who was going to be cut already got cut.

How did they determine who to cut?

Safety compiled all the drivers that had safety issues, sent names to the dispatchers and asked the dispatchers to list the ones that they wanted to keep. They trimmed the fat. Then they put a hiring freeze on company drivers.

So what do you do when the freight rates tank? I go into what I call 'Survival Mode'. I am less reluctant to spend, less reluctant to venture out of my freight lane. Last year was my best year since 2008, and this year seems like it will be not quite as bad as 2009. The big difference between now and 2009 is everything is paid for. That means I will spend more time at the house and on the motorcycle.

This winter should be awful.

 

Winter will be brutal. That's why I'm running hard til than!

 

If you want something more reliable, get your own customers and set your rate.

 

There's a lot of one man shows that shippers won't even look at

 

You find the shipper's customer and work for them. The work that I do, very few shippers pay the freight. It's all up to the end user to find their own transportation and to pay the freight.

 

Sounds just like listening to farmers in my area. Corn is down, when will it come back up, etc, etc, etc. Welcome to the world of business. And no, there are no grain price supports. Corn would have to drop substantially more for any idea of price supports to kick in. Corn is at a price now where any profits are razor thin at best. Not a whole lot different than the cyclical thing that trucking goes thru. Based on the very same thing.... supply and demand.

 

NO GRAIN PRICE SUPPORTS what do you call the ethanol mandate really cowpie I don't wish to start a disagreement but farming is heavily subsidized

 

Prove it! Ethanol has not had any subsidies paid to producers of it since 2011. That is pure fact. As for a mandate, yes it is mandated, but one can usually chose not to buy it. I live in the dead heart of ethanol producing territory, surrounded by 46 ethanol plants, in a state where the agriculture sector has a a heavy hand on state politics. That being said, I can buy ethanol free gas if I chose to, in any town around me, any day of the week, any time of the year. Ethanol is mandated on a volume basis nationwide, but there is no mandate, except by state agencies, that everyone is stuck with it if they don't want it.

But so what if there is a ethanol mandate? That still doesn't explain why corn prices are the same price now that they were during the middle of the Clinton presidency. That is fact as well. All you have to do is check the commodity grain prices for last Friday, and for 1998 and see for yourself. Now, how would you like to be stuck with 2015 pricing for everything you buy and only be paid what you were in the mid 90's? That is farming right now.