Of Rates and Trucks - rates you will not believe

Rob

Rob

Site Supporter
30
Casey said:
Some of these have doubled since March? Once again the dialogue changes immediately. My point is, we had increases based on fuel prices rising. That was the discussion. When carriers asked I informed my clients, we reviewed it and we obliged willingly. It was obvious that it was necessary. When fuel prices come down, the discussion completely changes, as you just proved.

And no, my good clients are aware how much their increases were and when they were. I can only relay the message. They, as well as I, had no issue with it. To be honest in this case, they have not even asked for the lower rates. I was striving to get it for them and yes, actually pass it along to show them that this was real and based solely on fuel. Every carrier I have opened up this dialogue with has been a brutal debate with no logic whatsoever. You want to raise rates based on other factors, we can talk about that. Right now we are talking about fuel prices. The dramatic increases were justified and based on fuel. Lowering rates back to March levels is also justified.

The real problem may be that when I deal with a client, I consider them my bread and butter and treat them like I need them. Some carriers like to treat brokers like we need them. Of course at times we do, but we should all be treated as the same relationship they have with a client they deal with directly. When some carriers are paid by a broker, they treat a broker very different than they would treat a large Customer they deal with directly. Try telling your largest client that the past increases for fuel are no longer for fuel, they are now for entirely different things that went up but we didn't tell you about it.

Don't get me wrong, some carriers are reasonable and totally awesome
Some brokers are reasonable and totally awesome as well.

I'm just making a point as not one of my "awesome" carriers has willingly lowered rates as of yet.
We'll see what the near future holds. If it continues on a down trend we'll be having many more of these discussions.
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Casey basing it all on fuel is not right was my point. All costs have gone through the roof. yes fuel dropped a couple cents a mile in the scheme but fuel is not the only thing that drove up rates. My points are all valid as to why rates are up and need to continue to be. Basing everything off of fuel is maybe how the carriers you talked with explained it but not the whole story. Inflation is up what was it 8.9 percent in June they said there you go rates up 10 points please JUST to cover inflation but telling most brokerages that is like asking them to recite Rudyard Kipling. They haven't a clue.

Some brokerage employee's I do believe get off on seeing how bad they can bend carriers over ( yes some carrier have been doing to to brokers up until the freight drop). I get what you are saying but the picture is bigger than fuel. In last year an average truck up 50k dry vans IF you can get one double the price over last year. Tires IF you can find them double. Drivers pay up 10-15% just to keep them. Oh and me heaven forbid carriers with millions invested turn a profit that is for the brokers only?

What we need is trucking companies and brokers to say no to the drops. Let it sit for a few days and see if saving a couple hundred bucks is worth these shippers risking losing their customers over. My guess is they pay and so they should trucking is always the first place everyone looks to shave a dime. All fine and dandy until the next freight peak. I am thinking of advertising free trucking loading and unloading extra. Think it will fly.
 
AgentSmith

AgentSmith

Well-Known Member
20
We drop rates to customers based on current market pricing without being asked by the customer. We have to do this to keep the customer because when the freight market is loose -- i.e. there are more trucks than loads -- carriers are calling customers, shippers and receivers and offering lower rates and we need to act before the customer starts asking about the rate.

As a 3PL we don't have to be bottom feeders and match unrealistic rates from desperate carriers who will drop the customer as soon as the freight market shifts but we do need to move with market trends.

Prior to the great flood of 2021 in BC plus the surge of inbound container freight we had fixed rates in place and would ride out the peaks and valleys of the freight market, changing the rate infrequently. This has changed and for some customers we guarantee pricing weekly, monthly and quarterly.

Pricing during the peak of the freight market was not sustainable for the customer and increasing the rate further to accommodate rising FSC was not going happen -- I was paying $15,000 - $18,000 CAD for BC to ON at the peak.

Current rates to carriers is also not sustainable and I expect another shift in the freight market in the fall as carriers park trucks refusing to run at current rates and others shut down.
 
LrgCar

LrgCar

Well-Known Member
30
Everyone is talking about fuel, but has anyone tried to buy a truck and trailer these last year? Trucks have gone up an easy 60-80K if not more and trailers have doubled in price and so has driver pay. If you expect carriers to haul purely based on increased and decrease fuel cost and not consider all the other factors maybe it's time to consider buying a unit and servicing your customers for fuel money. Good luck with that and let us know when we can scoop up your equipment at the bank auction. We have assets and brokerage and our customers understand their freight will be moved in the right hands with reputable carriers that pay their drivers well care about their safety scores and arent a Chameleon company, those carriers charge us a premium and we pay them what they want within reason. Of course, if we are getting ridiculous rates out of the air we let our carriers know that they may be off. Trucking margins have always been low you make good money for a few months and it all evens out in the next once rates decrease.
 
misto27

misto27

Site Supporter
15
As a 3PL, we have are responsible to look at the whole picture:
- costs of buying trucks and trailers which is crazy high
- fuel costs
- costs of employee, either in the office, driver, maintenance, AP, AR, everything!
- then costs of operating a truck from point A to point B
- then there is admin fees

It never stops. So, for those who thinks the rates are too high, try to work at the other side for a while. You'll understand. I did both sides for many years. And for the past year, hiring someone can takes weeks / months. This is a huge cost for any company! Then you have to hope they will actually show at work the first day, then hope they will actually stay. If they don't, then all the fees and costs associated with this goes to garbage. Then you have to start back. On every side.

So yeah, rates are high! But yeah, it's what is it and if people cannot stand the situation, then change industry. Simple as that.

Rates always went up and down, depending on the market. But we'll never go down at what is was 3 years ago.

We have to move on and still have fun doing what we do.

I came back in the industry after 2.5 years away. Everything has changed but what also changed, IMO, is that customers now understands ( majority of them ) what is the situation and what is the costs / rates associated with everything.

My 2 cents.

Happy Friday!
 
N

NotForHire

Well-Known Member
30
Insurance companies are starting to price high volume 3pls the same way they would price asset based carrier because the risk is just getting too large.
 
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N

NotForHire

Well-Known Member
30
Try finding a trucking company with a 6 digit mc number. Most companies in service today are 7 and even 8 digit motor carrier codes
 
C

Casey

Active Member
10
OK there are obviously more carriers than brokers here. LOL.
I believe I have proved my point. The Massive immediate rate increases were only about Fuel prices. When fuel comes down only a few months later, (as much as 30 cents a liter) the increases become about everything else in order to take advantage of profit from the fuel decrease. Let's face it, if pricing was so low before, the increases would have already happened, or nobody would be open. Using the fuel price is certainly one way to make it happen.

I totally understand all of the discussions. Unfortunately for rate increases they are difficult to quantify. Mentioning increases in every aspect of trucking isn't really showing us a quantified increase for a certain lane. Citing "inflation" being 8.9% when fuel is a HUGE part of that inflation number is interesting and again, difficult to decide what portion is fuel, and what to increase based on inflation. Who believes these fictitious inflation numbers anyways. A blanket inflation rate based on "everything" is certainly much lower than inflation in our industry. I have never gone over the entire spreadsheet of what it costs to run a truck, or 50 trucks. We can only react to increase as they happen and try to get it from our client. We have to accept the increase or move on. We price the lane and see what others are doing it for. If another provider is just as good at a better price what choice do we have when competing against thousands of freight brokers as well as carriers back soliciting our freight. (that is another challenge)

Somehow mind you, it all works out and we all make a living. In the end, the good brokers meet and use the good carriers. This Forum certainly helps to weed all of that out.

Thank you everyone and I also appreciate it was kept light and informative. It has made me more aware.
 
C

Casey

Active Member
10
Shakey said:
only if you thought it was going to be easy, I love our industry.
Click to expand...

If it was easy, everyone would be doing it. LOL
That being said, I was recently included in an email from a carrier to all his brokers. He didn't BCC and we all saw who was included. I was fascinated by how many there are and it seems the everyone just might already be doing it. Ha ha
 
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