I call the number, hoping to book the load I found. The phone is ringing. I’m talking to myself and practicing in my head what I’m hoping to hear the broker say when they answer: What good timing! I really need you to haul this load ASAP!
But all too often such a call takes a different turn: There are just a few more things you have to do. Or: The rate we posted was not exactly right.
Dreams of the perfect load, the money I expected to make, hours of service and fuel stop planning: All are in limbo. Now what? The broker’s got me destabilized, and it feels like I have to act fast to accept the offer and hope it works out -- or just sit and lose more time.
But might there be a third way?
Negotiating is an uncomfortable task. The business, the lifestyle of trucking are both grueling enough without having to think about haggling over the next load, or purchases big and small. As I sat down here to highlight some observations, I kept coming back to questions: Why do so many people I’ve talked to about negotiation say they feel they just can’t turn down the deal? Why don’t people feel they have choices, or at least opportunity to try to open up a conversation directed toward negotiating?
Truckers need loads -- we need that revenue. Shippers need their loads moved. Why is there a problem? Are we so conditioned from seeing the advertised prices for everything in our lives that, when looking at a load board, our thoughts automatically interpret what we see as gospel? Or do we feel like if that rate is going to move, it’s not in the direction we want it to -- that is, up.
It’s time to adjust that way of thinking with awareness of what’s happening when you stare at all those rates. Move your eyes from the posted price and examine the load’s details. If the offer rate wasn’t posted right there with the details, what rate would you assign to the load?
Do the hard work first. Focus on cost.
It’s easy to see or hear the revenue being offered, but it can be a little like herding cats to know what it will cost you, depending on the information about the load provided. Yet armed with details, it’s better to know what it will cost to move any load before what it might pay you.
Overdrive’s new Load Profit Analyzer is a fairly simple tool that might help owners in their efforts to corral costs and estimate potential profit with the right details about any load. After it went live, wasn’t too long before the time frustration yielded its head in comments under the story announcing it.
To wit: “If you know all your costs you don't need an analyzer. Most of the time when taking a load, you don't have time to analyze it or it's gone.” It's the reality for many if not most truckers; time restrictions become a roadblock interfering with our business practices. Time lost = loads lost = miles and money out the window. Negative emotions experienced are often more powerful than those that come with a gain of equal value, even if time lost was successfully put to use negotiating a more profitable contract or purchase.
End result for so many of us: Conviction that the only choice is to accept or decline, not to negotiate.
[Related: How truckers can flip the script on the negativity trap]
Claim the home field advantage
The Mind and Heart of the Negotiator, by Leigh Thompson, describes negotiation as an "inner personal decision-making process.” I had to learn this myself through the years in one-truck business management. Working with other owners, I stress that for the single-truck business -- any small business, really -- everything eventually becomes personal. Personal biases, coupled with our emotions, are powerful forces. It’s important to make sure they don’t get in the way of making the a deal that works.
- Set your minimum for rates, and don’t bother trying to search for or call on anything less than your own predefined acceptable pricing. Write this down in bold, or risk backing down from what is acceptable. Taking even a few seconds to write something down will help you slow down decision-making, maybe just enough to improve the odds that a winning move doesn’t become a future regret.
- Use a strategy of pre-negotiation. If you feel you only have that one chance to accept a deal, there’s no better time than before the call is placed to use pre-negotiation. Research average pricing for capacity, equipment or parts available. Compare the opportunities. Think about what you need days, weeks, even months in advance. Consider building more time in between an immediate need and starting your negotiation. This can help avoid participating in what might otherwise feel like an auction.
- Understand auction theory, and don’t let your zeal to win freight sell your business short. Cue Stanford economist Robert Wilson, detailing what’s known as the winner’s curse in this 2020 story from StanfordReport: “If different bidders have different information about what that price will be, then the person that overestimates the value the most will tend to win.” Pardoxically, in auctions winning bidders really lose, then, shelling out more for a product than it’s worth. In the freight-rates context, it's in reverse: winners are losers in the other direction, of course -- getting the freight but at rates that stink.
What are you selling? Your truck’s miles? Or your time
With time frustration high, it seems legitimate to question why we’re all still negotiating rates per mile and not always with respect to time. Lost time is clearly recognized as costly, yet nailing down total cost can be like a riddle for some loads, since time is even less predictable than the miles driven.
Start by deciding what your time is worth. A few times in relatively recent memory, I’ve attempted to shine the spotlight on this determination, most recently less than a year ago at the Mid-America Trucking Show with Red Eye Radio host Eric Harley. One thing’s abundantly clear: There’s no standard, agreed-upon route among owner-operators toward answering the question of what time is worth. Every owner has their own definition of target business profit and/or personal pay for themselves.
You might use a calculation of your fixed cost per day worked as part of it, among reasons Overdrive put that field among possible cost inputs in the Load Profit Analyzer. Consider what company drivers are earning, including benefits -- not drivers with a 1099 contract. (On average in 2023, according to the American Transportation Research Institute, driver pay and benefits together cost more sizable fleets about 96 cents a mile on average.)
[Related: Calculate any load’s cost in relation to time, not just miles]
Be on the lookout for new strategies, and ways to put non-driving time to good use, too. I’ll suggest the stories and podcasts here on Overdrive as generally more reliable source material than a lot of what’s out there, particularly for examples of how peer owner-operators have discovered a path to success that hinged on well more than just driving. Seek new and continuing education. Attend meetings and trade shows like MATS, the Broker-Carrier Summit event, or that company affair where you might meet business partners face-to-face to talk and share concerns.
How would you answer this question: When is the last time you made a sales call to a customer?
Make it a goal to be able to answer “yesterday” or "this morning" next time.
You probably know more than any other person involved what it will take to successfully provide the customer services requested and defined in rate contracts. Remember all the hubbub over so-called "remote work" among office types so many years ago now? I remember thinking then of the one-truck business owner as the ultimate remote worker -- mobile, taking the office everywhere we go. Yet, really, the opposite is true. Owner-operators are at the very center, on-site, of the work being done for every mile and hour in between negotiation, pickup and delivery of a load. Everyone else involved? They’re the remote workers.
You see and know more about what is happening as the work gets done than any other party -- communicate observations and updates effectively, and you’ll be the player everyone wants on their team. Better negotiations with them could well be the result.
[Related: Take the wheel of Overdrive's Load Profit Analyzer]
