Has anyone noticed in the past 2 weeks that rates have suddenly shot up? I've gotten several calls recently on loads that were paying in the low to mid-$4.00 range (from GA to NJ). Since this is my first summer hauling general freight, I'm not sure if this is just a seasonal thing, or if it is an indication of things to come.

Any thoughts?

 

Produce season in the SE right now. The timing is typical, rates are up, but I'm not sure how much when adjusted for fuel.

 

Rates usually go up this time of year. They are not normally at $4+/mile. I have hauled several loads the last few weeks in that range. I had one that was almost $5/mile. All were legal loads. Some are still trying to move their loads for just over $1/mile. I tell you, drugs are really taking over this industry, especially with the brokers. :roll:

I think a couple of things are taking place right now. One is that many owner operators have lost or parked their trucks. In addition, a number of carriers have closed their doors. I have heard figures from 42,000 for the first quarter to more than 200,000 so far this year. In any case, there are a lot of trucks that are no longer on the highway. Of course, you would never know it by the traffic. Some brokers and shippers are finding it more difficult to find trucks to haul freight. More owner operators and carriers have apparently decided to stay away from most of the cheap freight. They really have no choice if they are to survive. Apparently, there are still some who are willing to haul for anything to keep the truck moving. I have spoken to a number of brokers who tell me that many carriers and owner operators are demanding $3/mile or more to haul their loads. There are some areas where I won't go for less than $4/mile. Brokers and shippers will need to decide whether they are going to pay a higher price to move their goods or let it sit on the dock. Some will allow it to sit for a while, but they cannot let it sit forever. At some point they are going to have to move their products. I actually had a broker who called and offered me a load for $1.20/mile the other day. Who says these brokers don't have a sense of humor!!?? :wink:

I think the unwillingness of many owner operators and carriers to haul below a minimum amount may be spreading. As I have said on a number of occasions, it is the owner operator and carriers who set shipping rates, not the brokers and shippers. When you hold out for a fair rate, you are setting the rate. A year or so ago, $2/mile was a decent rate. With fuel at or near $5/gallon, that is no longer the case. Those who survive this slow down will need to demand higher rates.

 

I noticed this several weeks back (with decks)...think I posted the same question as you. I'd say open trailers have cooled off a little since then.

 

GMAN, I hope your assessment is correct. It's terrible that owners are losing their trucks and companies like this, but perhaps the lack of options will turn things around for those who make it through.

It's always bothered me the way many trucking companies pay they o/o rates so low (per mile) but they can afford to pay their company drivers comparativley high rates (per mile). I think there is a discrepancy- but the o/o have just simply taken what they thought they could get. Now the o/o can't afford to run for pennies.

Say no to cheap rates isn't a saying any more- it's a survival tactic.

 

I think that there are a couple of things going on. The first is that quite a bit of capacity has been taken out of the market. Thousands of owner operators have lost their trucks this year. There have also been a number of carriers who have closed their doors. These are people who simply could not continue to haul the cheaper rates and pay their expenses. The second thing is that those of us who are left are demanding higher rates. Some are sitting until they get the rate they want. This is forcing brokers and shippers to pay higher rates if they want to get their products shipped. I don't know how long this will last, but hopefully owner operators and carriers are waking up and deciding that they either hold out for better rates or they can close the doors. I still have a few who call and offer cheap rates. Some call with $2/mile freight and I tell them that was a decent rate a year or two ago when fuel was half of the cost today. When you are paying $5/gallon for fuel it is difficult to keep hauling freight for $2/mile. Most agree, but some are caught in a contract with the lower rate. I think you will see many contracts renegotiated this year.

As painful as this is for many owner operators and carriers it may be a blessing to the industry as a whole. It will force rates to come up. Those of us who run a lean ship and keep expenses low will do well when the dust settles. Those who have been hauling cheap freight are not going to make it. I still expect this to continue through the rest of this year and most of next year.

 

GA to NJ is no surprise and have always been hot spots. Georgia is #2 in outgoing freight in that section of the U.S. with an average of over 5,000 loads available today alone and 454 trucks posting their availability . It's not a good indication of rates in general as this area must pay more to attract the trucks.

You can run your butt off up and down that coast and do OK. I would end up going postal and pulling out my AK47 real quick though.

I ran that area for a few weeks and to me it's just not worth it. The wear and tear on your truck and yourself is much too much. Your runs are usually less than 600 miles and your lucky if you can load in the morning, deliver the next day and reload. I'm talking about a flatbed by the way.

When all is said and done at the end of the week you've put on less then 2,000 miles and worked your ass off. Not something you can keep up for a long time before it wears thin. Your dealing with tons of traffic, tight spots, waiting waiting and waiting and then to top it off you end up in a crap hole truck stop paying to park there, crap for food and every degenerate trucker is there also.

 

Rates going into the Northeast have nearly always been higher than other parts of the country.

 

Called on a load yesterday out of Mobile going to Tennessee. The broker tells me $600. I ask, "For 580 miles?" She says, "Yeah, the shipper has a regular carrier who usually takes these for $600."

I say, "Well, not for long, cause they're going to be out of business soon."

And they need to be if they are dumb enough to haul anything for a buck a mile in this operating environment.

Flatbed rates in the southeast have been depressed since the middle of last week from what I've seen. I thought they'd come back up Monday after the holiday weekend but I haven't found it yet.

I ended up getting a load of aluminum logs at the state docks in Mobile going to Atl. $2/mile was the best I could find.

With fuel prices being so volatile this year I've developed a short little rule of thumb for what I need to average. I take the current fuel price and divide by 6 mpg to estimate my fuel cost per mile (though I can usually beat this mpg figure). Then I take this figure and multiply by three, reasoning that if I can keep my fuel costs to 33% (or less) of my revenue that I'll be profitable. A mathematical shortcut is just to divide the fuel price by 2, which is the same as dividing by 6 then multiplying by 3.

Since that figure (based on today's fuel prices about $2.37) is what I need to average for all miles, I add about 10% to cover deadhead. So that puts me around $2.60/mile. That's the rate that I ask for, adjusting upward accordingly if I'm going into a bad freight area, like Mobile.

I'd like to hear some feedback from some of you guys that are more experienced on how you set your rates. BTW, I run flatbed in the southeast.

I have to admit, most weeks I fall short of my mark. Three weeks ago I averaged $2.35/mile for all miles, but the last two I was in the $2.10 - $2.20 range.

 

For the most part I have been getting some decent offers coming out of the Southeast, although I haven't been in Mobile lately. There are way more loads than trucks in many areas of the Southeast. That usually results in higher rates.