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?

2 comments

  1. Yep, an education is what it must be. Sounds pretty lofty – and practical. Looking forward to Trucking 102. Dad

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