Owner Operator A ‘Great Purge’ is pushing small truckers out of business at an unprecedented rate

Mike

Well-Known Member
Not a news article, posting simply because this is a good example of rates being lower because too many truckers that can't negotiate and demand their worth are now in a panic because of the fear stories they read and they are now jumping on whatever load they can find. This shipper knew they were posting a low rate, with the anticipation of negotiations, and instead had truck drivers begging for the load at the listed starting price.

I referenced them as "truck drivers" because that is all they need to be. They have no business mind at all, and no backbone to demand their worth in the industry.

These types of people are the ones you see on the various Facebook groups crying about how the brokers are keeping too much of the rate.

Article snippet below:

Chris Tucker needed to move some hot tubs. It seemed like a good gig for his network of small truckers.

The Winchester, Kentucky-based owner of Full Coverage Freight, a truck brokerage, recently advertised to truck drivers on a load board that it had a shipment of hot tubs headed from Seattle to a small town in the middle of Wisconsin. The rate came out to under $2 a mile, which Tucker thought was low. He expected drivers to haggle with his company to get paid at least $2.50 a mile, or about $1,000 more for the gig.

Instead, his office was slammed with dozens of phone calls and hundreds of texts clamoring for the hot tub job — exactly at the rate advertised.

 
I think this will be good for the industry. There’s a lot of riff raff carrier’s, owner operators and company drivers that need to be wiped out of this industry.

The quality operators will be fine, as there will always be a need for them.
 
I think this will be good for the industry. There’s a lot of riff raff carrier’s, owner operators and company drivers that need to be wiped out of this industry.

The quality operators will be fine, as there will always be a need for them.
Exactly what you are saying!
I see so many O/O's barely getting the cost of fuel to run loads. They can't afford repairs. They will be out of business at their first major repair.

I probably should not even be commenting in an O/O thread but here I am.

It's a business and they should be looking to get enough money to make repairs and buy new equipment when the time comes or even grow to multiple units if they chose to do so.

Running a truck as a not-for-profit operation is not sustainable.
 
Exactly what you are saying!
I see so many O/O's barely getting the cost of fuel to run loads. They can't afford repairs. They will be out of business at their first major repair.

I probably should not even be commenting in an O/O thread but here I am.

It's a business and they should be looking to get enough money to make repairs and buy new equipment when the time comes or even grow to multiple units if they chose to do so.

Running a truck as a not-for-profit operation is not sustainable.
Yep. I have to give credit to the players up here who refuse to do loads that are bullshit for the money offered. For the most part, the dozen or so players at this XPO yard are pretty smart folks.

None of them are brand new to the industry so they know what it costs to run and fix a truck.
 
That's not a lost profit claim.
Others call it a daily per diem rate, overhead rate etc. consists of your fixed costs which should include a wage for ones self

But for GAAP, it comprises pretty much the same stuff.


GAAP = generally accepted accounting practices
 
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Others call it a daily per diem rate, overhead rate etc.

But for GAAP, it comprises pretty much the same stuff.


GAAP = generally accepted accounting practices
Yep I definitely don't know anything about that. I'll have to research it.

The lost profit claim I googled had to do with losing money on a job due to others' failures.
 
You can understand business 100%. Won’t matter if you are the one calling the shots and unable to negotiate the rates you need to make the profit you are seeking.

That is what is addressed in the beginning of the article I posted.

Trucking is one of the most simple businesses there is to run in regards to require business knowledge. That is, for a single truck carrier or very small fleet.

The tools are out there for you to very easily track your expenses and revenue, and to see where you need to be in order to be profitable. Without an ounce of experience, you can use multiple software options that are created specifically for trucking, and it’s a simple matter of plugging in real numbers. It takes the skill of an entry level office person entering data.

Problem is, when you see that data showing you need $x per mile based on the miles you plan to run, it does no good when you cave to a broker on a regular basis and take whatever they offer, or lease on to a carrier that pays less than your numbers are showing you need to earn a profit.

Even as a startup, there are plenty successful owner operators out there that will freely give their advice in terms of maintenance costs you need to plan for until your exact numbers become solid.
 
You can understand business 100%. Won’t matter if you are the one calling the shots and unable to negotiate the rates you need to make the profit you are seeking.

That is what is addressed in the beginning of the article I posted.

Trucking is one of the most simple businesses there is to run in regards to require business knowledge. That is, for a single truck carrier or very small fleet.

The tools are out there for you to very easily track your expenses and revenue, and to see where you need to be in order to be profitable. Without an ounce of experience, you can use multiple software options that are created specifically for trucking, and it’s a simple matter of plugging in real numbers. It takes the skill of an entry level office person entering data.

Problem is, when you see that data showing you need $x per mile based on the miles you plan to run, it does no good when you cave to a broker on a regular basis and take whatever they offer, or lease on to a carrier that pays less than your numbers are showing you need to earn a profit.

Even as a startup, there are plenty successful owner operators out there that will freely give their advice in terms of maintenance costs you need to plan for until your exact numbers become solid.
So many people don't do any of this though.

When I actively engage people, they don't seem to have the slightest clue.

"I just run and whatever is left is what's left."

😳

XPO didn't distinguish those paper loads from easy fast light weight ones with the same mileage on the interstate until everyone wised up and refused to do them.

As long as there was at least one sucker, the rate stayed too low.
 
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I’ve recommended it in the past and I will recommend it again right now.


You say people don’t grasp why the price on a load doesn’t change at XPO a light load versus a heavy load. Because honestly it doesn’t matter. You have a daily operating cost and you have a maintenance and fuel cost per mile that’s all that matters.

 
I’ve recommended it in the past and I will recommend it again right now.


You say people don’t grasp why the price on a load doesn’t change at XPO a light load versus a heavy load. Because honestly it doesn’t matter. You have a daily operating cost and you have a maintenance and fuel cost per mile that’s all that matters.

Fuel mileage changes whether you're light cruising the interstate vs heavy crawling the back hills.

It also takes more time to crawl hills vs cruise the interstate.

We're not talking cross country where it all evens out. It matters. And we're also not talking about the same trip but with different weight. We're talking terrain and road conditions and weight.

140 miles that takes 2.5 hours at 7mpg shouldn't pay the same as 90 miles that takes 3 and a half hours at 3mpg.

So far, Keith blew a turbo doing it and I blew an EGR cooler.
 
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Fuel mileage changes whether you're light cruising the interstate vs heavy crawling the back hills.

It also takes more time to crawl hills vs cruise the interstate.

We're not talking cross country where it all evens out. It matters. And we're also not talking about the same trip but with different weight. We're talking terrain and road conditions and weight.

140 miles that takes 2.5 hours at 7mpg shouldn't pay the same as 90 miles that takes 3 and a half hours at 3mpg.

So far, Keith blew a turbo doing it and I blew an EGR cooler.
Stop thinking like a driver…

Over 10 years of budgeting for repairs, it works out to about 18-20 cpm HAS to be set aside for repairs. Oil changes, lights, filters, wipers, washer fluid etc. some months that “account” will grow because it’s hardly touched. Other months it’ll turn into a deficit suddenly because you wrote two consecutive $9,000 repair bills.

But it’s still 18-20 cpm on all miles driven.

Fuel mileage/ cost is easier to track with something like “Let’s Truck.”

So that’s pretty easy to say what it is.
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It’s not out of the norm to “stabilize costs” like maintenance over time. You know an oil change is good for 25,000 ( pick your ****ing interval. I don’t give a damn what it is.). It costs $400 to get it done. So right there is 1.6 cpm of your maintenance cost.

Tires are $5300 for a set of drives and should get you 320,000 miles. So there’s another 1.6 cpm. That’s 3.2 cpm already.

And engine is $28,000 and should be good for 650,000. That’s 4.3 cpm. Transmission is $13,000 for an Ishift and good for 750,000. Clutch $4000 and 500,000. You get the point.

They all have projected service lives. Even planning for turbos are possible.
 
320,000 out of a set of drives? Maybe if you never turn the steering wheel for them to scuff the roadway. Granted, I'm a local operator and do a fair amount of twisting and turning. But, I've never gotten more than 200,000 out of a set of drives and a little over 100,000 out of the steers with nothing but Michelins. And that was pushing them to the end.
 
320,000 out of a set of drives? Maybe if you never turn the steering wheel for them to scuff the roadway. Granted, I'm a local operator and do a fair amount of twisting and turning. But, I've never gotten more than 200,000 out of a set of drives and a little over 100,000 out of the steers with nothing but Michelins. And that was pushing them to the end.
Same. It's absurd to think an OTR guy and a local guy are going to incur the same costs. Let alone a guy who runs 3000 miles a week at 7-8mpg in top gear all the time vs a guy running 1000 miles a week pulling grades at 3mpg all the time.
 
Our trucks loading and delivering the sea-going tankers never leave the port and run maybe 3-5 miles a day on a good day. They get like 2 mpg and tires last maybe 1500-2000 miles. But the revenue per mile is unfathomable for those trucks. They are worked hard and put up wet every day. When you divide the engine hours by the miles the speed average is less than 5 mph. They have to be manually regened at least twice a day.

I just put my 3rd set of rubber on all the way around and the truck only has 400,000 on it. The coral infused roads here eat them up.
 

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