Trucking News

LiberalTrucker contributed this post for Masslogics Trucking News.   “Bigger is Better” has always been an American motto. And now many trucking companies are asking Washington to allow them to have bigger trucks.

A coalition of truck drivers wants to ensure that a Bill can be reauthorized by Congress to allow for bigger trucks on the road at the end of next year. For the past several years, big trucks were banned from many of the highways in the country. Now, the truckers want to get permission from Congress to be able to drive their large vehicles in several states including Maine, Minnesota, Wisconsin, South Carolina, Georgia and possibly Texas.

These States have been selected partly because of their economic benefits of having a seaport location or border crossing with either Canada or Mexico.

Owner operators believe that American drivers are at a major disadvantage compared to their Canadian and Mexican colleagues who can drive heavier trucks on six axles. Having access to the big trucks at the cross Border States like Minnesota, Wisconsin, Maine, Texas and the Canadian border will bring the truckers on parity when it comes to the loads that they can carry over the border.

The truckers also claim that with the larger vehicles they will be able to reduce the size of their fleets which in turn could lead to lower overhead costs, less impact on the environment and decreased damage to the highways.

However, this does not sit well with many other Unions, esp. the Teamsters. Jim Hoffa the president of Teamsters Union says that having bigger trucks on the road is more dangerous and will completely ruin our already poor road infrastructure. He thinks the idea borders on insanity.

Not to be outdone, Joan Claybrook who is President of Parents Against Tired Truckers has urged Congress to simply ignore the demands of the certain truckers. She thinks that are clueless.

More than likely this demand by the truckers is going to fail, but one can never know.

One should note is that many studies have shown that larger trucks are more likely to have fatal accidents compare to their smaller counterparts. The DOT claims that the currently designed large trucks can be expected to experience a fatal crash of 11% higher than single trailer combinations- perhaps Congress should have this data before agreeing to any demands by the truckers.

Oakland, CA. At the Union Pacific Rail Terminal truckers have had enough. Trucks are pulling over in solidarity to protest the rising fuel costs they must shoulder. Most of the truck drivers are only being compensated for 12% of their fuel costs. “We want to work.” Said many of the owner-operator drivers, but they can’t afford to when their fuel costs exceed the fees companies pay them to haul the loads.

Four years ago companies negotiated to pay 5% of the fuel costs above $2.00 per gallon. Drivers protesting say they have not been compensated.

Protesters yell and jeer at trucks passing by. Many fellow truck drivers abruptly stop their rigs and join them. Truckers in surrounding locations are also pulling over to support the cause.

Is this the first sign of things to come? Most economists are in agreement: oil prices are on a permanent upward trajectory. Cities are dependent on food and other goods arriving daily, most cities cannot continue normal activity for more than 72 hours without fresh inventory arriving. The protesting truck drivers at Union Pacific Rail Terminal are addressing this increasingly dangerous crisis now, we should all pay attention. Truck drivers cannot shoulder the impossible burden of endlessly rising fuel costs.

I know what you’re thinking, “I have to get home” or “If I’m parked I’m not making money.”  You’re right, and we are all guilty of using those reasons to take loads that we shouldn’t take.  But there are other things to consider, the main one being the cost to operate.  As an owner/operator or a small trucking company, you must run your business as a business, which starts at turning a profit.

Let me ask a simple question, what does it cost you to run?  You should have the answer to that question on the top of your mind each and every day.  You should be able to answer that question cold, without thinking, exactly how much it takes to operate.  And when I say exactly how much, I don’t mean just for fuel and labor.  I mean for insurance, taxes, licensing, maintenance, labor and fuel all bundled together.  As a long distance truck, the number might be by the mile.  As a more local truck, it might be by the day.  Either way, you should know those figures and be able to determine in about 10 seconds if that next load is worth taking.  When you see a load posted to a load board, you should be able to do the math and determine the profitability.  Profitability = Total Revenue – Total Cost, where Total Revenue is the load pay plus any fees and the fuel surcharge.

So, how much does it take to be profitable?  To some degree, that is up to each of us as individuals.  However, I would recommend a minimum of 10%, but 15% is a more comfortable zone.  Here’s a typical example:  If you determine your cost to operate as $1.42/mile (which should include your driver pay, even if that is you in the seat), then to maintain 10% profitability you need $1.58/mile for every mile, loaded or empty (divide 1.42 by .90).  You can make adjustments to the math to compensate for empty and loaded miles.  If you know that over the course of the year you drive on average 87% loaded and 13% empty, then increase your loaded price by 13% to cover the miles you won’t get paid for.

We all know the phrase “Say no to cheap freight.”  But how many of us actually live by it every day?  It starts with each of us as individuals.  We must operate our businesses in a successful manner in order to survive in this highly competitive industry.  Find your cost number, add your profitability, and commit it to memory.  And remember, if the load you are looking at doesn’t meet your profitability minimum, then help yourself and the rest of us – don’t take it!

Yep, I said it! DON’T TAKE IT! If you want to see better rates in the trucking industry, then you need to grow a pair and turn down unprofitable jobs. Let’s assume for a minute that you are in business to turn a profit. I hope that’s a safe assumption. Now, if it takes $1.38/mile to run your truck (that’s including your fuel, maintenance, taxes, insurance, and labor even if you’re the driver) and the load you are looking at is paying $1.40/mile after you consider the miles required to go pick it up, then why would you even think about taking it?? That load is only paying you $.02/mile, or $50-60/week?? It doesn’t take an MBA to see that’s just plain stupid!

If you are going to be an owner operator or run a small fleet of trucks, then you better get good at some math and record keeping. And I don’t mean waiting for the end of the month or year only to say “Hey, how come I don’t have much left over?” You should know at the end of every day, how much you made that day. And at the end of the week, how much you made that week. Good days and good weeks turn into good months and good years. But you have to take control now! Figure out exactly how much it costs you to operate and for the sake of you and the rest of us out here – don’t take loads that aren’t profitable!