Channel 19

Todd Dills

Rate undercutting getting worse?

| September 26, 2013
Recognize this 1978 Mack R-767ST? It's a replica owner-operator Robert Steele put together of the Rubber Duck's 1978  RS700L used in Sam Peckinpah's "Convoy" classic film. The truck, powered by an old 500 Cummins, Steele says, shows but one difference from the 1978 RS700L used in the film -- the top of the hood is not quite as tall. Steele had to modify the RS700L grille to fit the 767. Steele uses the rig only sparingly, but says it'd look great at the head of a convoy. Read his letter appealing for greater industry unity in our Voices section here.
Recognize this 1978 Mack R-767ST? It’s a replica owner-operator Robert Steele put together of the Rubber Duck 1978 RS700L used in Sam Peckinpah’s class “Convoy” film. The truck, powered by an old 500 Cummins, Steele says, shows but one difference from the 1978 RS700L used in the film — the top of the hood is not quite as tall. Steele had to modify the RS700L grille to fit the 767. Steele uses the rig only sparingly, but says it’d look great at the head of a convoy. Read his letter appealing for greater industry unity in our Voices section here.

Robert Steele thinks so. Operating a fleet of three trucks, one of which he drives himself, out of St. Augustine, Fla., he’s seen several direct accounts he’s had with certain shippers run under by operators who are either getting two-three times his fuel mileage or (yes, most likely) don’t know or don’t care how much it costs to operate a truck and are content to run up and down the road with little to no profit. “Some of these guys,” he says, “as long as they have a Big Mac to eat running up and down the road, they’ll just keep doing what they’re doing.” 

Then there’s the competition from larger outfits. The rate on a decorative stone-hauling contract Steel had, shipper-direct freight, over the approximately 360 miles between Jacksonville and Pensacola in Florida, paid a solid $900 until recently. The shipper “changed up their dispatch and gave it to a lady in Tampa,” Steele says. “When they did they opened up the freight rate to everybody nationwide,” though Steele says his service was on-time every time.”

Today, the rate they want on the load is a mere $560, or about $1.56 a mile. “And people pull it, that’s the bad part.” Steele adds. “Right now, with the amount of freight out there, it should be the truckers’ market to set the rates, but it’s not.” Quality of service, he adds, doesn’t seem to matter.

Contrary to what the analysts say about the wider economic conditions and the trucking market, which all seem to point to a boost in rates and pay, as we’ve recently reported, Steele says a cutthroat dynamic remains the rule of the day and getting a fair rate for very long in such conditions is increasingly a difficult prospect. 

Independent reefer and hopper bottom hauler Cody Blankenship, based in Waco, Texas, responding to news of FMCSA’s shutdown of a Laredo, Texas-based hauler who routinely flouted hours regs, echoed Steel when he said there were “many more that need to park. Running illegal means they’re running cheap and doing volume. If this riff-raff would stop there would be a better class of truckers with all the benefits of fair pay and less hassle from the DOT. These types of carriers are the cause of the regs coming down the pike at a breakneck pace….”

Read more about FMCSA’s stepped-up efforts to shut down non-compliant carriers in this “Crackdown” special, part of the CSA’s Data Trail series. 

In this light, could more robust new entrant requirements and FMCSA’s focused attention on shutting down scofflaw carriers be considered quite a good thing?

Independents, what have you seen on rates in your operation the past several months? 

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  • guest

    Sure..Mega fleets like USA Truck…in July had 15 wrecks..KILLED 1 and INJURED 13 with their CRAZY operation…they have NOT made a PROFIT for years!!
    They should be put OUT OF SERVICE permanently.

  • guest

    That Crazy Redco Transprt in Laredo….had all illegal Aliens driving their 122 trucks….their ALERT STATUS with FMCSA was for UNFIT DRIVERS….they could NOT speak the English Language according to ALL the CITATIONS that are listed in their CSA FILE…….CROOKS!!!! Plain and Simple..paying COPS to leave them alone….UNTIL they KILL so many people that it makes HEADLINES…..the SHIPPERS encourage this crap with their ZEAL for the LOWEST BID!!!!!!!!!!
    Anne Ferro and her Cops are PAID to look the other way.
    Those CSA cops are CROOKS TOO!!!!!!!

  • guest

    Every shipper you go to is INVADED by foreigners…they LIVE in their TRUCKS…that IS their Home…much better than the Cardboard Box that they came from in their Village.
    So a low Rate to THEM aint really Low…they drive OLD junk trucks…No truck Payment to speak of…..may NOT have insurance payment to be Bothered with…Their Medical Insurance is the ER at any Hospital in America….Shippers LOVE these “truckers” Cheap/and Resourceful….many even have the entire FAMILY in the Sleeper!!!
    A “NORMAL” trucker cant compete…..soon it will be an INVASION of CHINESE PEASANTS hauling the Freight!

  • Bubba Trucker

    Seem the rash of Russian and Eastern Euro-truckers lately? “VLAD” has even been on the “Ice Road Truckers” show…they are like Mexicans: Everywhere. One even posted an ad on Craigslist – IN RUSSIAN.

  • Bubba Trucker

    Cheap freight rates? Tell me something new I don’t know.
    This has been going on since the mid 70′s when I got into this biz. National Shutdowns, Boycotts, Rolling Convoys, EVERYTHING has been tried – and it;s still the same old, same old. It is – what it is.

    Sure a few older guys in their 70′s can tell stories about lowball rates from the 1960′s….(hope I’m not still forced to drive a truck for a living if I make 70; but I’m not that far away in years……)

  • Red Light Bandit

    That old Mack sure brings back memories. Not as many as a 78 Astro, 76 K100, or ’80 Road Boss.

    Red Light Bandit
    “the original – BEFORE the movie”

  • John Scott

    Not only cheap rates but many times no FSC? Or they make a cheap rate look better by adding in FSC into gross. Lot’s of tricks of the trade. I lease to Landstar and agents post loads like this too. They all do it. They are all guilty of fleecing the owner operator. I drove 400 miles made a little under $200 net. Had to make a minor repair and guess I paid most of that net to the repair shop. You have enough competition out there in trucks that just kills the rates. They go up a little but then soon go back down. Yea, the economy is great. Thank you EPA, DOT, and Obama and company!

  • ilovdieselsmoke

    that lady in tampa,fl is probably with “tarpon truck lines.” they have an office in SC now with more piece of s#*t rates. their flatbed freight rates SUCK worse than i have ever seen anyone offer. hopefully someday soon someone burns their damn business out. they haul for one fifth the going rate on a good day. hauling air pays better than these bastards. that’s why i get what i need to haul a one way florida load. no way will i participate in the miserable back haul market back out of that state. sadly more trucks are now registered in florida so this has contributed to rates going into florida becoming cheap. last of the week the south florida truckers want to go home so shipping rates going down turn to crap. the shippers know this so they wait until Thursday/Friday if possible to move their product on these two way cheap florida back haulers. foreign ownership of these trucking companies isn’t helping matters either!

  • GI

    Comments so far are barking at the wrong tree.
    I’d say, blame the system designed by almighty money bags. The only power truckers and workers of all trade may have is the power of unity. Strength is in the numbers: 3.5 million truckers live and work isolated from each other in an unsustainable capitalist society that forces all workers to race to the bottom. Lowest wages, lowest costs coupled with lowest education and lowest life expectancy and the longest work hours in the developed world – welcome to America!

  • David Johnson

    I am completely lost if there is a shortage of drivers why based upon supply and demand would we be under cutting each other? This o/o has 40 year Pete getting appx 5.0 MPG but no truck payment and the other guy a company driver making no money and getting big Mac (which he can’t afford since his net pay less than minimum wage) what is wrong with this picture? It appears to me the customer and trucking companies are still one up!

  • john f

    well the choice is yours if you are an o/o. I live and run out of AZ, and have watched for years as the rates have tanked ! Thanks to nafta, I have watched Mexicans take our freight and laugh all the way to the bank, as they send their $ back across the border ! I can’t compete with these people as their fuel is being subsidized by the feds, so they wind up paying less for their fuel, and don’t have the same laws to comply with as I do ! So currently , I decided to park all my trucks and will continue to do so until the industry and law makers can get together and make it to where I can be profitable ! I refuse to go up and down the road and break even, and anymore , after fuel and maintenance costs, that is all that is happening ! So, if they want Vlad, or Juan to haul their freight for pennies on the dollar, and they are STUPID enough to do it, then I guess it is a match made in shipping heaven ! NOT ME ! Just remember this Mr corporate greedy prick , WHEN YOU LOAD THOSE SORT OF TRUCKS,WHAT WILL YOUR FREIGHT LOOK LIKE WHEN IT SHOWS UP AT THE DOCK ?

  • gearjammer2000

    sorry people but the fault is with the truckers themselves,
    25 years in a truck 20 of them as an O/O and i finally had enough of this bull shit.
    my truck is for sale, and my wife has my permission to shoot me if I EVER think of driving again!!!!
    OOIDA at one time was looking out after the drivers but they have drank the coolaid and have no interest in fighting for the drivers,
    you all want to inprove your life as a trucker the I would suggest you get together, form a group that really cares about trucking and support that group, it won’t happen but that is what needs to happen

  • Mike Smith

    When this article says Laredo it means Mexicans. MEXICANS in SO. CAL, IE., Fontana, CA, can’t speak English according to forklift drivers. According to tow companies Mexicans are driving trucks without INSURANCE as well. And the CALIFORNIA GOVERNMENT is allowing this to happen. Just last week Governor Brown decided it is going to work to protect MEXICANS from the border patrol, customs, and the police.

    What the G D hell is going on in this country? I’ll tell our own government has SOLD us OUT, and support MEXICAN CITIZENS in OUR COUNTRY INSTEAD.

    When another country or people take your territory, taking over your country, and your resources, history dictates it’s time for war. But our government supports these people invading our country by calling them illegal IMMIGRANTS in stead of calling them people who are INVADING our country.

  • g

    Yep INVASION by mexicans is in Full Speed.
    Every truck stop is filled with them. Every shipping office the clerks are all talking SPANISH. Warehouse men are all mexicans…Legal or Not they have taken over the trucking industry in the Southwest..and WILL INVADE the rest of the country.

  • g

    Smart to leave trucking..their is NO FUTURE for an American Trucker with real obligations….all the LOADS go to these LOW PAID bracero mexicans that cant speak English..and live in their OLD Jalopy Truck and eek out an existence while they DRIVE OUT the Americans. Only Misery is the Future for
    American Truckers.

  • guest

    All true…and this comes from a Business Man with many trucks……this is the NEW Reality.

  • g

    So True..that is what is happening..shippers want the LOWEST bidder..and they scrape the bottom of the barrel to find them.

  • Mike Smith

    I have seen all the the things you’ve mentioned, and I have watched this take over of our country for years. It is now obvious what has happen, or it should be.

    It’s about time for everyone to start speaking out. Political Correctness must be killed, because it is killing us.

  • trucker959

    the problem you are having with Eastern European trucks and drivers flooding the country we in the U.K have had for a few years.Its so bad that signs in truck parks and warehouses are now in English and Polish (sometimes in Polish first ) You need to shut the doors guys before its to late.

  • Jimmy the Greek

    What the hell is so bad about an old truck ? I drive a 1998 centry it’s white with a teal green nose clip , my dry van is a 1998 to ! no recaps , it has a 3 mo old sticker on the windsheld has never been put out of service in the last 11 years i owned it ,i haul Haz-Mat 90% of the time and i make real good money , Last year my gross was $168,000 i payed a little over $18,000 to irs on right at $77,000 net i run only south east out of houston texas. Last year i ran right at 50,000 miles i only have it washed 2 or three times a year to hell with crome and the tractor only has 783,000 miles and i am not leased to anyone run like i want , I spend my money on old motorcycles pre motor compiney only and my bad assed red mustang I well run the truck four more years then get out

  • Richard Jones

    I left the trucking business back in ’06 and sold my equipment for these very reasons! I wrote on this forum back then that this crap was going to start happening more and more! I remember sitting in ATL with an empty flatbed and the best rate my agent/dispatcher would give me to run up the east coast was $1.15 / mile! I told her I would be losing money to run at that rate, so she got pissed and let me sit there at the truck stop for a week! (They wouldn’t let me book my own freight.) I then told her that if I dead-headed home to OK, the stickers were coming off my truck and the plate would be in the mail. Well, I sat there another 4 days and went home. I saw the handwriting on the wall back then and got out. The rates, as far as I have seen, haven’t improved much since then, considering fuel prices. The other thing I saw starting to happen back then was the influx of Mexicans drivers. I figured if the companies could get Mexicans to drive for 25 cents a mile (and the Mexicans would LOVE to make that much), the additional profit to the trucking companies would be close to $40 billion industry wide. If you don’t think the trucking companies haven’t figured that out and want to get Mexican drivers up here driving their rigs, you ARE crazy! It is coming!

  • David Johnson

    Mike I wish every time there is a discussion about OUR money you STOP getting off on the tangent of immigration and again that I do not care. But the ISSUE here is that big trucking companies have never paid FAIR wages to all American drivers because you guys since God knows whenever 1970s have accepted it. Now the reason why big trucking companies have the free(d) monies to undercut o/o because again they do not pay crap! And like one of the other people on this post stated most drivers not all have no unity! just look at our attitudes towards each other in any truck stop on company terminal! The only thing that is going to help like I have said before is a union but driver’s would rather eat BigMac watch a flatscreen TV, play video games, etc. in a truck they do not own than pay a dime in union dues!

  • David Johnson

    You are absolutely correct there is money to be made out there because there is shortage of company drivers stupid enough to get paid pennies. And there is nothing wrong with a truck, power unit, money maker what is pay for needing periodic maintenance. You are specialized carrier tanker, hazmat, flatbed heavy haul etc. standing out in the rain, snow although you are probably smart enough to run I10 back/forth country. But there is some truth to the article expect big companies undercut each other as well. And the way they do this whether they hire foreign drivers or not is keep paying crap!

  • David Johnson

    And Mike so far as illegals that is enforcement responsibilities of the federal (DOT) and state (troopers) governments which we pay for everyday. Now what I want is not to be DETAINED since WE the drivers also allow trucking companies to have us sit around hours each day. Yet drivers everyday continue to let these foreign clerks and dock workers to overload trailers and will never say to the company the next time I come to this shipper you better had sent by fax, email, or carrier pigeon, etc. a pallet plan in Spanish before accepting the order for transportation!

  • David Johnson

    Again how have or did freight prices so-called “tank” get out of here I say again did trucking companies lower freight prices when diesel prices went up and did customers request same shipping prices when diesel price went up hell no. The only thing that has gone up are drivers pay for the reasons that are obvious drivers willing to eat bigMacks and not steak!

  • Mind Games

    Here’s some simple advise and I know some will agree some will not… Do the best you can and if ya can’t hold on then find ya self a school and retrain and go into another field of work.
    Open a small business if you can but ultimately just let go of rope I know its hard to let them win but in the long run they will see the light as the old saying goes let’s take THEM down with us and don’t even think it won’t happen if all drivers applied legally for SSD which by the way is what they really want us to do don’t believe me??? Call up social security and asks em now much they will pay you to sit at home and play sick.
    The answer will boggle your mind if you are close to retirement age.
    The system would bust if we all did that at one time!
    Me? I ran lateral one and filed for bankruptcy!
    Like I said let’s take them down with us!!!

  • myronlind

    Todd, I have seen some rates fall as you have described. Others have remained stable and risen. The more the freight seems to be a commodity, the more the rates seem subject to being cut. The infrequent shippers (i.e. 2-5 times per week) seem to be the strongest rates at this time. I guess there is less incentive to go in and cut rates on this type of stuff since the timing is not as predictable. In a free market that is pretty much how it is going to work. Either way, I continue to find plenty of stuff that pays very well and keeps the one truck moving.

  • Ken

    If you think your working in a capitalist market place, you sir need more education.

  • Adrian Alexander

    After reading most of these messages all I can add is that I know a few that run teams in order to come up with a penny left at the end of the trip. I can’t make them understand that wearing off the truck like that is not the way to make money.

  • GI

    Honestly, that’s my thinking. Your thoughts…?

  • g

    Yep it is here and NOW…mexican companies and drivers thru out the Southwest….this is the new reality….

  • g

    Man aint that the TRUTH…it is already Too late..our Rich Bosses are already LOVING the Cheap Foreign Labor…there is No Turning Back…..Cheap is all they can say….Cheap rates, Cheap Pay, Cheap equipment……..MORE PROFITS!!!!!

  • Billy Higginbotham

    I read all these comments about how low rates are.
    What are you holding out for?

    I have a blanket to cover cost.
    A 100 mile run that delivers tomorrow cost me this…

    $325 to my truck to cover operations.
    $200 to me because I’m worth at least that for a days service.
    .75cpm to cover my fuel
    Plus 10% to the carrier I’m leased to b/c that is what they get.
    So for a 100 mile haul I charge

    $325
    $200
    .75 x 100 or $75
    ______________
    $600
    Plus 10%
    ______________
    $660

    Flat out!!!, any less and I’m loosing money
    I’m alright with $200 to me up to 400 miles then I begin to tack on $100 for each 100 miles up to 600 miles then I’m entering a new day and the process repeats

    For 600 miles I need $1270 or $2.12 a mile and that for a dry van. No touch to the driver, one pick one drop.

    We all complain how cheap freight is but no one says what there charging. How can we unite if were so secretive.

    In my opinion $2.12 a mile for 600 miles is fair. Let them rent a U-haul and pay a driver to haul 1/3 of what we do.

  • Billy Higginbotham

    I’d like to add this about the Mexican Drivers.
    My wife is from Honduras so I have a lot of Mexican/Latino friends.

    Many of then scoff at the idea of trucking. There happier working in a field, being home daily, and make more than a company trucker or O/O. Many have tried it and quit after 3 months because the pay was to low compared the time put in and was not worth it for them.

  • New safe driver

    Rates Depend on what U want. New company drivers need more info on what others are getting paid. Talked to several new drivers and they are shocked when I tell them that they are under payed. I tell them that several years ago drivers were getting .35 CPM, and they are shocked that they are getting way less, ( .24 to 34 CPM). Only a few are over the .40 CPM.
    O/O U need to stand up like me and only time the loads that pay good enough. I am not one to hide what my average rate PM is (((( 3.18 PM ))) Brokers call me and are shocked by my rates, then call back later and try to under cut my rate then come up to my rate, just to get the load moved. NOT sure if my MIN. $3.00 per mile is not enough, but it works for me.

  • Billy Higginbotham

    I read all these comments about how low rates are.
    What are you holding out for?

    I have a blanket to cover cost.
    A 100 mile run that delivers tomorrow cost me this…

    $325 to my truck to cover operations.
    $200 to me because I’m worth at least that for a days service.
    .75cpm to cover my fuel
    Plus 10% to the carrier I’m leased to b/c that is what they get.
    So for a 100 mile haul I charge

    $325
    $200
    .75 x 100 or $75
    ______________
    $600
    Plus 10%
    ______________
    $660 or $6.60 per mile

    Point being those $400 short hauls are cheap! I need $660 Flat out, any less and I’m loosing money.

    I’m alright with $200 up to 400 miles then I begin to tack on $100 for each 100 miles up to 600 miles then I’m entering a new day and the process repeats

    For 600 miles I need $1270 or $2.12 a mile and that for a dry van. No touch to the driver, one pick one drop.

    We all complain how cheap freight is but no one says what there charging. How can we unite if were so secretive.

    In my opinion $2.12 a mile for 600 miles is fair. Let them rent a U-haul and pay a driver to haul 1/3 of what we do.

    I don’t always get my rate and sometimes have to move so I don’t loose more by sitting in a dead area and for that reason I often need even more on other hauls.
    But I think if we all held firm to a higher rate, shared what we held out for all freight would move up to a better rate.
    This Florida freight or Northeast freight freight is just a crap.
    All freight should pay cost to operate and turn a profit.

    I do get good going into Florida from time to time or I refuse to go
    b/c I can’t get out on $3 a mile for 500 mile haul to Orlando out of
    Atlanta. And I’m not putting .75-$1.00 a mile freight on my truck to get
    out. PERIOD.

    This year I’ve averaged $2.07 for loaded miles and $1.78 to the hub.
    Even with those numbers I’m still low on my net.
    So far I’ve netted .27 cpm on loaded miles and .23 cpm from the hub after all expenses. That’s off $168,327 gross. It’s real tough to turn and hold a profit.

  • James P. Lamb

    And here we go. October 1st is here ($75K broker bond) and the big boys are already playing rate games. I hate to say I told you so, independent owner-operators, but “I TOLD YOU SO!”

    What you are experiencing is PREDATOR LANE PRICING, by the larger operators intended to knock out the small players, whether they be brokers or truckers.

    The larger trucking companies and megabrokers will now take a loss for a while to run you out of business and then when you are gone and shippers have little choice they will raise the rates shippers pay back up higher than it was to begin with.

    Wait until six months from now… and then a year from now.

    You can thank OOIDA and TIA for this.

    Join the new Small Business in Transportation Coalition to FIGHT BACK!

    http://www.linkedin.com/groups/Small-Business-in-Transportation-Coalition-5135395?trk=my_groups-b-grp-v

    JAMES LAMB, President
    AIPBA.org

  • canada trukker

    Blame is on the 100,s of brokers, both big and small,2011/12 Total Logistics made a $Billion in sales, I guess CHRW topple that, an guys are still pulling their freight for minimum rate, Indo-americans run for free also,

  • g.c

    I’ll tell you untill we do something about these big co. writing the regs along with the gov. we won’t get anywhere. as for going with unions thats about as stupid an idea as i have heard, we only will we give control over to them but then they can tell us to strike and make 0 money wile they are making full pay. The unions are the reason we are in this spot and we just keep letting them walk all over us, it’s time we stand up for our selfs and have the gonads to do something, eather that or just lay down and pee on yourself.o/o have the power if we would just us it.

  • Mind Games

    Its not a capitalist society it is however a fascist society.
    Most smaller companies cannot buy a politician but a rich fat slob sure as hell can..

  • LeaveMeAlone

    Where can I find this Cheap Labor? I could use somebody now.

  • Joshua Mulford

    I Own Haulin Ace LLC and I have seen rate fall for everything I run because of the guys that haul cheap freight and would rather make $0.02/mile on a load than haul a load for what it is worth. I have a Hotshot operation and OTR. Part of the problem is Sites like Uship that let anyone with a car or a pickup haul goods and the people posting the stuff have no idea that its illegal for them to be hauling the stuff