New Owner Op / Market Questions

Topic 31654 | Page 1

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Michael's Comment
member avatar

Hello all. I've been trucking since 2016, but I recently started brokering my own loads. I know we are in a slow market, but I've been noticing that even when in hot zones with high L/T ratios, brokers are not willing to pay anywhere close to the 15 day average spot rates. I'm well practiced now at negotiating, but brokers just don't want to move. I keep seeing others come along and snatch up loads for absurdly cheap prices. I'm guessing the ones who are biding cheap freight are the larger companies that can afford to screw the rest of the smaller guys? Anyway, I'm barely averaging 2.70 per mile right now at a time when fuel has jumped to 4-7 dollars per gallon. Could someone who's been in the market for a while help me to understand what's happening here?

Sid V.'s Comment
member avatar

Hi Michael,

There's really no secret, inflation is high, gas is high, people arnt doing a lot discretionary spending. Therefore freight is low, supply of trucks is high, demand for trucks is low. You've been trucking for a while, where were you when the pandemic hit? I was in dallas and the rates got as low as .75 cents a mile. Imagine taking a trip from dallas to chicago for $700.

The people that are taking the loads are people that have paid off equipment. Personally, i haven't ran for 3 weeks and it's in my opinion it's going to take at least another month to really flush out the system. People that got into $250k trucks are going to find it really tough.

In an up market you go out and run for the money. In a down market you go out and buy equipment when everything is cheap.

Pacific Pearl's Comment
member avatar

Freight is always boom or bust. With a recession just around the corner (turns out record inflation and gasoline prices cut into consumer's disposable income) rates will be low until the market thins the herd of trucks to more closely match the demand for freight.

Fuel prices are 100% the result of shutting down domestic oil production and depending on countries who HATE us for our oil supply. Despite plummeting approval ratings there is no signs of a u-turn from the current regime. In fact, they're doubling down. Now that we've stopped buying Russian oil our options go from bad to worse. Begging Iran and Venezuela for oil is the new plan since they refuse to buy more from Canada and Saudi Arabia is demanding help with their Houthi problem in Yemen before they'll help us out with more oil. Can't help the Saudis because that would upset our new friend, Iran.

The rate problem will fix itself when all the suckers who jumped in with $250k truck loans go broke. Economic recovery and the next boom are at least 5 years off IF we get a free and fair election in 2024. Otherwise, food shortages and double-digit inflation are here to stay.

Michael's Comment
member avatar

What should I be expecting to gross each week? I've been averaging about 7500-9000 per week. This seems terrible to me, but I'm guessing it might be the most I can expect in this market. Is that average about the best I can expect?

Davy A.'s Comment
member avatar

So, if fuel costs are rising, inflation is rising, commodities are raising in cost, why are o/os not passing those costs on to the customers, ultimately to the consumer?

From everything I'm reading it says it will happen, shipping costs will go up. I would think inflation and fuel prices going up would allow almost open season on pricing. I'm trying to wrap my head around it.

When I was in housing, and building products/lumber went up, say 10 percent, we'd bid 20 percent on top on our material prices. Every cycle of inflation caused shortage of disposable income, so less jobs, but the jobs we took went up in price because labor and materials were more expensive and harder to procure.

Guess I'm wondering why you can't bid and negotiate for the current market conditions? And what's preventing costs from being passed on to the consumer?

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Stevo Reno's Comment
member avatar

Seen a youtube vid, back right before Biden took over, Trump was giving a speech, when gas was around $2+ a gallon in some places. He said, if Biden gets in as Pres., we will see gas prices in the $6,7,8 range ! TADA !! & Look what we have NOW !

We are in the SAME situation we had with Nixon, and Agnew as Vice Pres. Powers that be, did NOT want Agnew as Pres. So him being so corrupt, they got him out first, with Jimmy Carter taking over, then forced Nixon to resign or face impeachment....Now we have the same scenario, they want Joe gone, but don't want worthless, Kamala sliding in his spot.

So they have to get rid of her first, with someone in the wings to take her spot, THEN, impeach or have Biden resign, so whoever took over for Kamala, takes Biden's job.....NO Doubt, now Joe will go down in history as THEE WORST we ever had ! When I HAD to wear a mask at shippers/recievers, I wore my "F**K BIDEN 1 lol I waited for anyone to say anything about it, "Uh sorry you require a mask, so this is mine" sorry my 1A right, in play. Of course no one did, got few weird looks from other drivers, oh well.

Shipper:

The customer who is shipping the freight. This is where the driver will pick up a load and then deliver it to the receiver or consignee.

Michael's Comment
member avatar

Still wondering what some other owner ops are grossing per week.. I'm trying to determine if I am doing everything I can in this market.

Sid V.'s Comment
member avatar

Davy,

The answer to your question is pretty complicated. What your describing is what happened last year in trucking. Everything was going up by small percentages and we were all passing it along to the consumer. Michael is pretty spot on when he said he was grossing $8k a week.

The problem is wages didn't match the inflation and now everything is coming to a head with gas prices crushing the consumer. You can only raise prices so much until there's no more to squeeze. Consumers stop buying, less freight has to be moved, and rates go down. It's just supply and demand.

Klutch's Comment
member avatar

I was talking with a couple owner ops in Dallas who were contemplating shutting down. They said it wasn’t worth running atm, making around dollar per mile after expenses. Not sure if that holds weight or if they were just frustrated and exaggerating.

Robert B. (The Dragon) ye's Comment
member avatar

The only real suggestion I could make is to haggle for fuel surcharge or lease on to a company that pays fuel surcharge to help offset or completely cover that fuel cost

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