Success and failure is based on much more then the rate some broker quotes you any given day. It is easy to say cheap freight is the cause of all failures because indirectly it is. But in reality many other things went wrong for those that fail. I would say there are three things that have to happen in order to be successful. An O/O must be able to run their business effieciently, they must manage their expenses, and they must maintain their equipment. I beleive managing expenses is the real reason for failure. If you do not know all of your numbers you will never nogotiate a decent rate, the margins are too tight. Cheap freight is all relative, if it cost me $1.00/ mile in expenses then a rate of $1.35 or $1.40 is profitable. As opposed to an O/O who has expenses of $1.20/ mile. That driver may think that same $1.35 is "cheap". Some drivers take on large truck payments or sign lease agreements that remove control or add to expenses. If these numbers are not managed and the truck isnt run efficiently failure is certain. And its not the rate that caused the failure it was the expenses.
The spot market is subject to rate fluctuations. If these flucuations force rates down below your operating costs. You have to figure out how to lower costs or you lose your competitive edge. Thats business! Id also like to mention the psychology of all of this. Negotiating is hard, some of us are good at it and some not so much. Its easy to follow the path of least resistance and many of us tend to do that. So when faced with deadheading for $0 or taking a "cheap" load ( and by cheap I mean not profitable) to another area you begin to find the path of least resistance. Thats when you say to yourself " at least I got something to come here" but really you have begun the downward spiral of operating for less then costs. When you get to this "better paying" area you are still subject to supply and demand and if conditions have changed you might be faced with taking more less then profitable freight to another "better" area.
Market psychology is something that has an effect on decision making. In stocks the hardest part of trading is selling for a profit. Sound crazy? It is! But what happens when you are up on a stock is you tell yourself " I think I can make more" so you hold and before you know it you are down. Same with loads and load boards... You see a load paying $2.20/mile and think "hmmm, Ill wait and see if I can get $2.50" and before you know it you are hoping to cover expenses to get to a better area because all the good loads are gone. If you see or negotiate a profitable load take it and dont look back. If you look at the load board later in the day and see a better paying load going to the same area you will be telling yourself to hold out next time for a better rate and you most likely end up losing money because you thought you could get more.
Know your numbers, all of your numbers......And real numbers not what you think it costs to operate...Know those numbers to a tee then you will always know where your profit lies. You'll be able to set up loads in advance that average out to a profitable rate by the end of the trip. Never talk yourself out of a profit by waiting for something more profitable. As the saying goes "you'll never go broke taking a profit" its true in any industry. This is a game of numbers and margins are tight. Competition is fierce and some of your competition do not even know if they are profitable. Track all of your data, compare your numbers quarter over quarter and year over year so you know the direction of your company. If the trend is down then you should know rather quickly that you need to increase revenue or decrease expenses until the trend reverses. Its all in the numbers and not some brokers numbers or profit on a load but YOUR NUMBERS. Thats all that matters. They will tell you everything you need to know. The only way you will be suddenly facing bankruptcy is if you are not paying any attention to your numbers. It should never come as a surprise that you are losing money because the data is a snapshot as to what is going on all the time. There is no broker to blame for your failure because you knew you were failing all along, you just decided to ignore the data.
Using the Load Boards - Successes and Failures
Discussion in 'Ask An Owner Operator' started by GearWarrant, May 18, 2014.
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GearWarrant, 281ric, SheepDog and 4 others Thank this.
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1. Know your numbers - cost / mile, etc
2. negotiate, haggle, Whatever you want to call it
3. give good service to establish a good rep with broker - on time or early, no excuses
not really rocket science, just plain ole uncommon common sense! -
Very well put crackinwise....
crackinwise Thanks this. -
I would figure that brokers would be tripping over each other to book a reefer in Cali around this time. Post your truck and don't take the first load you get offered. Tell them to give you a little to think it over, It will give you time to compare offers and it will make them think twice about the offer they gave you if they really need your truck
I Don't let lower expenses let me run for less. I pretend Im hooked up to a brand new truck and trailer and have to pay for them , keeps me from trucking for a hobby and more to make a living.
A lot of great responses on here from all the members.Last edited: May 22, 2014
Lady K and GearWarrant Thank this. -
"Help me find good freight so the O/O brothers can survive". Sounds like a lazy union mentality to me.
I don't go to FL much but from what I understand they:
-have lots of produce and oranges and stuff
-grow fresh flowers
-have the most calves in the USA.
I also understand that those three commodities require care and speedy delivery.
Sounds like money to me. But can you handle it? Odds are you cannot. Now......have I helped you? I doubt that I have.Lady K Thanks this.
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