cant remember which one but a trucking trade mag several yrs ago did a 3-4 piece thing on this…said would be a great idea here…wonder what happened…[:-^]
Actually the piexe in the Chicago Tribune was off by quite a bit the avarage O/O makes before expenses aroud 130-150K a year not 40K as the paper states and after the expenses are taken out they are clearing around 50K. The fact is the independant O/O is a vital portain of the trucking industry they are the ones that haul alot of the houshold goods and stuff liek that Allied and North American Van Lines have no cpmpany trucks and besides you want some one fresh out of school moving your grandmothers china shegave you on your wedding across te country. You have to remember the large companies refuse to service the small shippers and recivers in the trucking field like in the RR think of the small companies like a short line or regional and the big boys like J.B. and Schinedor and England as the Class 1’s the only go after the large accts. I am a former OTR driver and only worked for companies small enough that the boss knew who I was when he saw us yet we were large enough that we had the equipment and contracts that we gave the best service to the big shippers. I know for one that the avarage O/O would not use what you think is a great service based on the simple fact that it will squeeze even more out of a tight profit margin.
I was an O/O for abour six years. I even had a small fleet (11 trucks)at one time. You can be very successful, as long as you keep the proper mind set.
For example, You run a load from Dallas to Memphis. It pays 513 miles loaded, and 34 miles empty. If you are leased to a carrier ((most O/O are) they supply trailer, reimburse you for tolls, scales, assist in paying state taxes, etc…) they are going to pay something for the deadhead. It’s usually enough to pay for the fuel and that’s about it. On this trip, we’ll say they are paying $.72 per mile. Your loaded miles are being paid at $1.40 per mile.
You load at FedEx-Dallas at 1300. Your appointment (I don’t know if FedEx still does it, but when I drove, you could only be 15 minutes early or late. If you were late they would charge the carrier, by the minute, till you arrived!) is at 0520 the next morning. This is an easy run, not only on the driver, but also the equipment. The loads are light, your going eastbound, and there are no hard pulls. All of these elements increase fuel mileage, which in turn, increase money in your pocket.
Now here comes the mindset, some big riggers think you have to run as fast as possible, all the time. They have their big large car with all the chicken lights, straight stacks, large Texas bumpers, and lets not forget the EGO. So they run between 75 and 80 miles per hour, that means they are averaging about 4 miles to a gallon. Fuel is running about $2.37 a gallon. It’s going to cost “big rigger” about $324.09 to run this trip, and keep his “image” alive.
Now if he slows down to 60 miles per hour, he might get 7 miles per gallon. That would reduce his fuel costs to $181.81! That would save him $142.28 on this trip alone! If he does this the trip will pay truck $560.87.
I see this is getting too long so I’ll stop here, but there’s more to it then going and buying whatever the bank will loan you, and setting out on the o
I started this thread with the idea of showing part of the reason why railroads have not taken more trucks off the road.
In the big picture, it can not be said that the individual truckers are the cause of the situation. Each guy is out there competing with 300,000 some other guys and there are way too many shippers who will exploit that and demand superior service at rates that will barely pay the fuel bill. For every trucker that declines to take a load because the money isn’t right, there are five who have to take the load just to get out of town or get some cash at the end of the trip. (Or a month later.)
In my first post, I said that railroads don’t aggresively pursue domestic intermodal business. I will amend that to say that they don’t aggresively pursue EVERY last load for nothing more than the fact that there are loads moving at rates that wouldn’t cover the cost of rail service.
My views on this come from over 15 years experience at getting transportation service of all modes for my employers. I was fortunate that most of the time I worked for companies that recognized that service of good value comes at a fair price. I did have one job at a company where management expected quality service at the very lowest available rates. Sounds like a nice idea, but in the real world it just won’t work. I very quickly decided to leave for another employment oppurtunity.
I agree. I have taken loads that I wouldn’t normally touch, but it’s destination put me in a location that I could get a really good load out of.
Zapp:
At one time or another we have all done this. That is what the load broaker counts on to move a cheap load…As previously stated, one man’s backhaul is another man’s main haul…
Pretty soon with all the mega-mergers we’re all gonna be working for JB Swift toting around containers locally for the Chessie Union railroad anyway!
the truck to rail to truck at the other end sounds good but only works if everyone works together and that be too easy and wouldn’t make sense! kinda like split speed limits!
Well just as information…
If we look at someone who does have to compete with those independant truckers, Werner, we find that in the three months ended June 30, 2006:
They had an average length of haul on a load of 584 miles.
Then, on average, they had to move the empty truck 86 miles to the next load.
Their average revenue per loaded mile was $1.679, exclusive of fuel surcharge. This was an increase of 6.4% from 2005.
The fuel surcharge added about 21%, making the charge to the customer around $2.03/mile on their average haul.
If the volume is there, and drayage costs are contained, a railroad should be able to make money hand over fist with intermodal competing against truckers charging over $2.00/mile at 500 miles. And Wener isn’t doing that well even at those high rates - its return on assets was only 8.3%.
The major railroads have their hands full right now - but when things ease up a bit I think we’ll see some decent efforts at developing shorter haul domestic intermodal business. It seems the money is now there.
One more thing. The belief that the railroads aren’t interested in anyone who doesn’t ship 1,000 loads per year is not an issue. All it takes to solve that one is a middle man such as an intermodal marketing company. They’ll aggregate the loads of several smaller shippers and present themselves to the railroad as a high volume customer. Happens all the time in all lines of business. It solves a problem called “discrepancy of size”.
Actually, not a bad synopsis.
But one error needs correction. If the railroads decide to haul Werner et al trailers, they are not competing with Werner et al, they are providing a service to Werner et al.
The only entity the railroads would be competing against per se would be the highways, and since highways are not private profit ma
That’s funny, because as I was loading rolled paper at, say St. Frances, La., I would see these very large boxes with wheels being loaded with, yep, paper!
So, yes, trucks and rail carriers DO compete.
It’s product sensitive.
Remember, too, there are vast differences in target markets within the transportation business. There are markets that require more or less direct departure and cannot withstand delays to concentrate traffic :
“fragile” produce (lettuce, strawberries, “deep frozen” foods
High-dollar manufacturing components moving in a JIT supply line (such as assemble auto components)
Air freight and some LTL feeder routes.
These markets are simply not going to be available to rail haul - and they will create a backhaul lane to reposition equipment. A classic illustration is a situation managed by a acquaintance - fresh produce moving from Florida to Michigan markets, with a guaranteed two-trailer per day return haul of auto parts (repair parts) moving from a Detroit-area parts distribution center to the company’s local DC in the Ocala, FL area.
I’ll agree with the strawberry’s example (they’re a real B@*^h to haul in a truck so I don’t think you’ll ever see the RR’s try it), but JIT auto parts are also shipped by rail.
GM’s Arlington, Tx plant receives the frames, engines, transmissions, and other components for their Tahoe, Yukon, Denali and Escalade’s via Union Pacific.
Another example of modal competition.
Zapp:
I could not agree more with you on problems hauling the fresh strawberries, they are a highy expensive and sensitive cargo in a truck. But when the Illinois Central was in the passenger train business; strtawberries out of Louisiana were a regularly hauled comodity on the passenger trains, and at times they even ran special strawberry trains to Chicago for in-season strawberries. Some of the more informend IC fans can probably give train’s names, as well as equipment involved [during that time IC had a pretty extensive reefer fleet to service the banana trade from Mobile/Gulfport so there was equipment to be had] and more info on this.
Well, I’ll agree on the strawberries. (Strawberries are so perishable they tend to move air frieght.)The other stuff you mention moves by rail just fine.
Even air freight. True story from the old ICG. We had 30 hour TOFC service from Chicago to New Orleans. You could ship it Friday afternoon and it would arrive at the NOLA ramp midnight Saturday.
There was a shipper who obviously didn’t know what he/she was doing. The shipper contacted a shippers’ agent to get some “urgent” freight from Chicago on Friday to New Orleans Monday morning.
The agent took the load (about 5,000 pound IIRC), billed his customer for an air freight move, put the freight in a pig trailer, and paid us for the TOFC haul. As long as the agent paid us, it was none of my business.
Trains compete with over the road movement for just about everything shipped.