That’s wisdom no doubt shared by many of you now that e-logs are in play for many more than before. It’s something that came up on a recent conversation I had with Chad Boblett, Kentucky-based independent owner-operator and founder of the active Rate Per Mile Masters Facebook group for business discussion. We were talking about spotting the problem brokers and/or a broker’s problem customer by effectively reading the broker’s responses to your questions about the load. (Much more on that from a variety of sources in the March issue.)
Here’s Boblett on the subject of detention: In 2018, with the ELD mandate in play, “it is now 100 percent OK to bring up detention before you get off the phone” with any broker, no matter the load’s origin or destination. “You’ve got to start bringing it up. In the past, people have not made that part of the negotiation.”
If you find you’re having a problem getting the broker to agree to your detention terms, particularly if conforming to the industry standard of two free hours, after which detention applies, you can be assured you’re probably going to have considerable detention at one or another of the facilities on either end, Boblett believes. “If it’s a good shipper and receiver” when it comes to detention, “the broker should have no problem agreeing to your detention time pay” terms.
Consider, too, going above and beyond $50 an hour after the first two for a detention rate. “If the third hour is $50” paid, Boblett says, “that’s just $16.66 an hour for the first three hours. It’s not worth it. If a broker tells me, ‘It usually takes three-four hours, but we pay detention!’, I don’t want any part of that. We’re never going to be able to develop a relationship if I have to sit for three-four hours” on either end.
It can be hard to budge any broker off the industry standard of two hours free in negotiations, Boblett says. “I’ve tried, but haven’t had any success.”
But it is possible. And on that typically offered $50/hour rate for detention, you may well recall my podcast discussion with Mark White of Hartsville, Tenn.-based Old Time Express and his boost from $50 to $100 and after two hours for his direct customers’ contracts, and $100 after a single free hour with brokers when he can get them to agree to it. So it is indeed possible.
Consider deviation the other way from the industry standard, Boblett adds, a red flag when a broker offers you this variation: “The broker will tell you, ‘We don’t pay until after three hours’ or ‘if there’s a problem, let’s talk about it when it happens.’”
You ought to know, then, likelihood of a problem is high. “Whenever something a broker says raises a red flag” like that, Boblett says, “you only need one of these to tell you that you’re probably going to run into other issues. One red flag and I get freaked out and start asking all kinds of questions. I ask them all before I ever give a rate and the rate is based on all the possibilities that I might have to deal with.”
Hourly accounting of revenue and income, if you’re not figuring it already, ought to figure more and more into your analysis to help determine where to set your rates in negotiations. Landstar-leased owner-operator Gary Buchs looks at revenue and income in hourly terms through his e-log for total on-duty time and drive time both. At the least, it might tell you you’re not making enough for the time put into the work, in which case the operation is a drag on the market.
Speaking of drags, Buchs recently had a conversation with some part-time haulers among the farming community in his area who marveled at rates when he showed them what some of the freight in his leased company’s network was being offered for. “How did he get such rates?” they asked, which seemed to them astronomical but were well within what’s reasonable to generate a modest profit.
Furthermore: How could they determine what was a fair rate for their work?
Put in the research, he told them. Use the sources that exist to see where the spot- and contract-market averages are for your equipment type per-mile via Truckstop.com, DAT and others. Spot rates have been high and rising the last several months, and contract rates typically follow. With spot rate averages, consider those are brokered loads, primarily. The broker is often taking 15-20 percent or more off the top, so make the calculation and aim higher in negotiations with both brokers and direct shippers.
And don’t give away all, if any, of your on-duty not-driving time. The end was in the beginning. One more time, wisdom from Mr. Boblett:
“It is now 100 percent OK to bring up detention before you get off the phone.”