Month: January 2014

No Freight Is Worth Your Life

I’m a broken record when it comes to talking about capacity and reduced inventory levels. These are very good things for the trucking industry. But the down side to Just In Time Freight is the customer is pressing to get it delivered.

As a professional driver you must be the one that makes the decision to shut things down. Nothing is worth your life or the lives of other motorists. There were times in the past when I would have dispatch tell me they had trucks still running when I felt it was un-safe. While frustrating to be pushed like that, it really is your responsibility to make the decision when it is safe to keep running or not.

Fortunately, more companies have people on staff that will make the call to shut trucks down. This takes the call out of the hands of dispatch (that is getting pressure from the customer) and the driver (that feels the financial pressure).

We all need to remember that this is a marathon and not a sprint. The safe, professional driver will make better money over the long run than the super trucker that thinks skill can overcome conditions that are unsafe.

Reality is Better Than the Index Shows| December’s Truck Tonnage Index Spells ‘Best Year Since 1998′

What this index doesn’t capture is what happens when you have a high volume of loads that that are relatively light. Like what we had in December with all the online sales.

I’m not complaining or feel that this is not a good index to watch and understand. I say this to point out that December was actually even better than this index can capture because we had so many good paying miles that registered very little on the index.

The Owner Operator that wants to operate and think like a business owner needs to stop and ask what is an index missing. Is what is missing good or bad for the industry and their business? In this case it would be good.

Food for thought.

Trucking News Online – Trucking Industry News & Information | December’s Truck Tonnage Index Spells ‘Best Year Since 1998′.

A Strong Start for Spot Market in 2014

For January, this is a stunning map. What we are seeing is that in most of the country we have very tight capacity and rates should remain strong for the rest of the month.

Source: DAT

Clearly the weather at the beginning of the month had a big part in this. The lesson for all Independent O/O’s is when you see weather, regardless of the time of year, you need to start planning you next moves to capitalize on the coming truck-to-load imbalance.

Now, I love data and when I can see it graphically like this. I can quickly start looking for ways that I can take advantage of tight capacity.

What I see is a couple opportunities that most would tell you to avoid. Now these are not for the faint of heart but if you are smart and know how to negotiate and who are your best candidates to negotiate with are, you can score a big week.

State graphics-12

Florida

I love the opportunity with Florida right now.

“You are crazy Bill. There is no imbalance in Florida.”

And that is what everyone is thinking. They can make good money running other markets and avoid this all together. But Florida is a consumption state. Take, take, take and they aren’t giving out any freight right now. But they still need their sun screen and Walgreens knows that if they don’t have it the customer will walk across the street to CVS and buy it. So they are going to pay to get the sun screen on the shelf (remember, everyone is running with low inventory levels these days).

But that is only part of it. Because normally that still wouldn’t pay enough to make it worthwhile. But as I look at the map I see that North Florida has an imbalance. So for some planned deadhead you can move North and get a better than normal rate.

But you have to be smart and understand how the markets are working.

The sad fact is that many brokers have seasonal rates. And since January is typically (typical in terms of what the uniformed think) a slower month they will bid a lower rate. They are going to be very reluctant to go into their pockets to move this sun screen. And they likely don’t have room with the way these contracts are designed to go back to the shipper and get more money. So they are going to sit on it and take a service failure.

The other sadder fact is that many of the brokers don’t actually own the freight in times like this. Because Broker A is having a harder time moving the freight than normal they will reach out to other brokers to help them move it. Further reducing your ability to negotiate the rate you need.

No of course, don’t not call on these but understand the dynamics at work. Farm2Fleet has a driver that regularly gets good rates from CH Robinson.

Carriers are in a better position to get a good rate from. They will typically have more money in the load to start and they HAVE to move it. Service failures like this are not an option for the carrier. Taking a loss is typically less of an impact and often they have penalties if they have a failure.

The best option is working with 3PLs that are paid a flat rate. They have the room to move up on rates because it is being passed on to the customer. And the good news is that many of these accounts are coming to them when the broker fails to move the load. So the customer is already expecting to pay more.

State graphics-13Denver

There should be a big red flashing sign here. When do you see an imbalance like this in Denver? What is great about Denver right now is the customer is already expecting to pay more to move into the market. So getting the rate that you need shouldn’t be as hard as Florida.

But like going into Florida, you may need to negotiate a little more because the contract rate is going to reflect the typical market conditions.

Caution Icon-07Be Warned

Capacity can change quickly. So grabbing a load on Wednesday to deliver Friday and reload on Monday is a big gamble. Especially in Denver when you are talking about weather. This time of year you can get delayed days with a decent storm or add days because it is just slow going. And while you will likely still be able to get a rate you have lost days of productivity.

Common sense only works in common conditions. What we have now is not common and the educated Owner Operator can take advantage of these conditions.

By the time I post this the map will likely be out of date. But us this as an example to start thinking differently when conditions like these present themselves.

You Have To Do The Hard Things – Part 1

Ever wonder if you can hold on any longer?  Ask yourself why you are doing this when it seems no one else is?  Scared to death because you could fail in an epic fashion? You have to do the hard things. The things that you do define you.  At times it is the little things that no one seems to think matter and take extra effort.  Other times it is things that seem impossible.

“Those are the things that make the difference between living a life of mediocrity or outrageous success.”

-Dan Wadschmidt

How easy is it to make excuses to not do the hard things?

You have to do the hard things.

You see people you think are extraordinary and wonder how they accomplished what they have.  But the truth is, often what differentiates them from ordinary people is that they are not just willing to do the hard things, it is a passion for them.

In Dan Wadschmidts blog (found here) he hits 19 of the “Hard Things” you need to do to be successful.  As part of the Trucking MBA I have added my thoughts around being an Owner Operator.  Part 1 of 4

 

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More often than not I talk with drivers that go deeper and deeper in a hole with the carrier they are leased to and won’t make the change.  Just last week a driver was telling me he was losing money every week with his current carrier and couldn’t afford to switch.I asked him if he couldn’t afford to change now how he felt it would get better in 4-weeks.Change is one of those things that we seemed to be hard wired to avoid.  Even bad situations seem easier than going into something new.  The unknown is scary.  But we don’t grow without change.  And does it also seem that the easy changes are the ones that are bad for you?Pretty easy to eat garbage compared to that healthy eating plan you are on, right?  But how hard is it to change to healthy eating?
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Or stay up later than you want.As drivers we need to make sure that we get our rest.  That is more important than anything.  But there are times when we are home and have been on the road for weeks and it would be easier to sleep in a little extra.  Even when you know that you need to get your numbers pulled together.Maybe it is about getting up early to get the truck in the shop before all the others are arriving so that you can get out as soon as possible.  One of the best pieces of advice I go from an old trucking is to never hit the shop in the evening.  Get to bed early and get up before the sun and get in when everyone else is sleeping.As an O/O you are a business person first and driving is a task.  Make sure that you are making the time to run and grow your business.
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This is one of the areas that most O/O’s can’t break the driver mentality.  Even when you are leased to a carrier you need to think in terms of providing the best service possible even when you have a bad driver manager, challenging customer or running for a poor carrier.Eventually your efforts will be noticed and you will be the go-to truck.  That is when you get the better loads; others work harder for you finding you a load home and offer you better opportunities.Early on in my driving carrier I took this attitude.  That turned into a dedicated run about 6-months earlier than they normally would take drivers.  And then another dedicated lane came up that had me returning on every load MT.  Getting paid to drive 1,500 miles a week MT really helps the bottom line as an O/O.But if I had the typical attitude of most drivers I never would have been able to make the money that I made.  All because I willing to help other out even when there was nothing in it for me.
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How hard is it to know that your driver manager needs to get out of the office for a family engagement but you don’t have a load and aren’t sure if the others in the office will try as hard for you as them?  Telling them to leave, even when it could be at your expense is what this is all about.
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As the owner of a carrier that only leases on Owner Operators I have seen both sides of this.  The fighters and the quitters.The fighters don’t complain about rates, brokers, shippers, fuel or breakdowns.  They constantly evaluate what they are doing and look for ways to improve.  They stay positive and are positive they will succeed.The quitters will give you every excuse in the book why they can’t succeed.  Brokers are cheating them, fuel is too expensive, rates are cheap, no freight… At times it feels like the list of items going against them is endless. But how is it that two people can be in the same areas and have such different results?

In part 2 we will discuss playing it safe, leading and looking like a fool (my wife says I have this one mastered).

Be Safe,

Big Bad Bill

 

Going Against the Grain

This is a blog post that I made on The Truckers Report (www.thetruckersreport.com) almost 2 years ago. I have modified it some to update to current conditions but my feelings and sentiments have only gotten stronger. As I am finally launching The Trucking MBA I thought that this was probably the best representation of who I am and where I am coming from.

Thanks,

Big Bad Bill

It is no secret that I am a bull (optimistic) on the trucking industry. More specifically the opportunities for O/O’s (independents and percentage leases with the right company) and small carriers. 

Over the 4-years I have had many O/O’s with decades of experience tell me that I just don’t understand this business. I respect their point of view and understand their position. And I certainly don’t discount their knowledge and experience. Actually, in most of those conversations I asked most of the questions and absorbed as much knowledge as I can. Even now with the success that Farm2Fleet Trucking has had and with a long list of successful O/O’s that have been successful I am still told that my thought process is wrong and I will never succeed.

The difference is that rather than look at this industry from a pure historical prospective, I look at historical data, compare that to what is happening today and listen to the major players on what they are looking at in the future.

When I look at all the information, this is an exciting time to be in this industry. Many don’t realize that this is like being on the ground floor of a dot com company years ago.

So here we are, going through a transformation that would benefit the safe, compliant O/O and small carrier. We are at the beginning of a prolonged growth stage for our industry and the O/O’s that are positioned to capitalize on the spot market and partner with large carriers and brokers for strategic freight will see huge profits.

Nothing will change the basic fundamentals of business (we all remember the Dot Com era where that little thing called profit seemed to be missing from business plans). But what has changed since 2006 is that public carriers can’t justify the capital required to expand capacity. They are focusing on brokerage and partnering with small carriers. Bull and Bear Market-11 (2)

More freight will be on the spot market. This is good. But the partnering is where the opportunities really are. 

As independent O/O’s and small carriers we offer flexibility and a focus on service that a large carrier can’t get from its fleet. This is what the large fleet lacks. It is those of us that understand that this is our strength and value that we bring to the table that will win in this game. So in order for a large carrier to grow they will need good partners. 

This is your wake-up call. It is not about the same old grind out a good rate from a broker. Now every call to a broker needs to be made with the intent of learning something strategic about that broker. Will it happen most of the time? No. But it will never happen if you are not asking questions beyond rate, weight and appointment times.

Look harder than ever at those direct freight bids. Can you really afford that account in this market? What is the opportunity cost of having to get back for that dedicated freight? Better have those answers going into it.

For a good part of 2013, most markets saw record lows in terms of capacity. Contract freight rates have risen but spot market has been better. A new high water mark has been set and public companies across the board have been issuing guidance to the markets to expect significant increases in shipping costs for the past couple years.

Now, in 2006, data like we are seeing today was coupled with record new truck orders. But that is not the case these days. Truck orders are for replacement and not increasing capacity. Who doesn’t love to hear that?

The new world order for trucking has already begun. How are you preparing to capitalize on it?

It’s looking like a good year 2014

2014-09Anyone, like myself, that thought you couldn’t do all sorts of fun and different things in trucking needs to flow and read Anne and Craig’s blog. They are the true “Paid Tourists”.

Anne & Craigs Great Adventure

After last year I am spooked to say good things about our truck. But we do love her a lot and she is being a good girl this year. We have had a couple little bumps but she is running beautifully. We are getting great gas mileage and running pretty consistently. It makes me wonder where we would be this year if she had been running this well since day one. You live and learn though and the one thing I can definitely tell you about trucking is. Sh*t happens. It just does no matter what you think. You just have to be prepared. I swear after last year we deserve some smooth sailing!
We have spent time with most of the family in the last month. That is the biggest reason we love our job. Honestly what other job enables you to go where you want, when you want…

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