All Posts in Category: Trucking Business

Why Will The ELD Mandate Affect Freight Rates?

 

 

Currently at least 80% of drivers are able to keep a “flexible” schedule. Many like to say drivers using paper log books are cheaters, super truckers, danger on our highways. It’s this belief, a picture society holds of a driver shooting up some sort of a drug, with his teeth rotting from sugar products, smell of cigarettes and smells worse than a rotten body speeding down American highways with no sleep as if the driver holds license to kill. For a long time truckers image has been tainted as dangerous and dirty.

Now let’s snap back to reality what is really going on with our truck drivers, and our industry. Drivers on paper logs are actually more safe. Majority of these truckers uses the paper logs in order to take a break when their body and mind require it. Once rested, they will adjust their log book and keep driving to deliver products to the people of America.

Let me try to paint a picture for you. A driver wakes up at 7:30 AM, checks in with a customer in order to deliver these precious products. Best case scenario the driver has a dock by 8:15 AM. However, the product did not get unloaded until 11:30 AM. Technically the driver’s log should claim he started his day at 8:15 AM at the latest. Once the driver is unloaded, hopefully he has a load already and now he has to drive maybe 80 miles away. This can take about an hour and a half at best case scenario. By now it is 1:00 PM. The shipper decided to load the driver until 3:30 PM. Finally loaded, the driver has a problem. At this time traffic is forming and he is losing his drive time. He needs to get to a truck stop, wishes to fuel up his truck, take a shower, and maybe grab a decent meal finally. By the time he reaches the truck stop it could possibly be 4:30 PM, if not later. Diesel pumps are full, and he loses another 30 minutes getting fuel. This is 5:00 PM right now. It takes him about 10-15 minutes to find a parking, grab what he needs and heads into a truck stop. There is a line for showers and he waits another 15 minutes.elog Takes about 30 minutes to unpack, shower,get dressed, pack his bag again. By now it is close to 6:00 PM. His delivery is 340 miles left to go. Which means, grab a sandwich, or a slice of pizza and adjust your log book to allow you to have another 6 hours of driving at average speed of 60 miles an hour. The driver makes it to his delivery at midnight. Goes to sleep. Maybe the driver did not feel well, and decided to go sleep for 7 hours, and left at 1:00 am, and made his delivery by 8:00 am. However, anyway you look at this if this driver started his clock at 8:15 AM, he would have been pressured to drive as fast as possible, no time for breaks,showers,or meals. He would be fighting the clock. What if this driver checked into a dock at 8:15 AM, and decided to go sleep for 3 more hours as he waited to get unloaded? Once he drove another 80 miles, and was awake for 3 hours maybe he went back to sleep for another 3 hours while getting loaded? I am sure he is more rested than a driver that couldn’t sleep on his 10 hour break, and is now pressured to drive 11 hours on his ELD. Well, the problem with safety, and the law is the HOS Regulations, but paper logs allowed drivers to be flexible, and get the rest they need in order to keep doing their job.

What does this have to do anything with ELD affecting the freight rates?

Once this flexibile time is lost due to the ELD mandate, these drivers are not going to drive the truck tired and fatigued just because their device says they are safe to drive. The flexibility will be lost. Carriers will start losing company drivers that can’t make the miles they used to. Some may even been forced to drive tired because their ELD had hours such as the YouTube trucker RunHardGetPaid. Why would any driver be away from their friends and family to make as much money as he would driving for Uber? Only way to keep drivers happy will be, less miles, and more money! This money does not come from thin air. It has to come from the shippers.

Successful owner operators and carriers know their operational costs. The more miles their truck does, the less their operational cost is, which can drag freight rates down. Trucks not being able to keep the operation costs down due to the fact the miles are being cut down creates two things: tight truck capacity, and demand for more money in order to keep their operation costs and profit going. Shippers will not have OPTIONS, and brokers will find themselves in tight spots. Brokers will have to do a lot more work looking for drivers that have legal hours to complete a delivery, pick up, and so on. Customers will not be happy when brokers give them rates that carriers ask for and it could possibly create a shift of brokers losing customers, at the same time gaining new customers. Not too sure how well it go for brokers, but from my perspective I would not sign any contract freight for the next year at least.

But there are more drivers that will come and drive! I doubt it! Old drivers are retiring, and ELDs was the last pin being dropped. Young drivers are hard to come by now a days. Smaller carriers with good reputation, good pay can’t hire younger guys due to insurance policy requirements. Younger drivers are being forced to drive for carriers such as Swift, Werner, and so on. These carriers starve their drivers. How many 21-23 year olds can you think of would want to be away from parties, drop out of college, away from their relationships, to be gone for 3-4 weeks, and bring home $1600 if lucky? Would you? Exactly.

I would not be worried about smaller companies expanding again. It’s hard to find good drivers and not many wish to invest money into equipment that might sit again. For some reason, I can’t help but wish to add that this winter may not be as mild as the last two.In winter time many paper log book drivers will drive with caution 30-40 MPH for an hour or two to get out of a bad storm, fix their log book and continue driving. With ELD this will not be possible. 400 mile run can possibly turn into a two day delivery. Truck parking shortage is serious. Now a trucker can drive through here and there to find a safe parking spot, but once ELDs kick majority will look to find a parking an hour or two earlier before their clock shuts them down.

Overall, driver shortage, no flexibility in HOS,and parking shortage, is a perfect storm to even force some brokers out of business, allowing the brokers who stayed to get more customers, but also for higher rates. My prediction is .46 -.66 cents per mile rise.

 

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Higher Rate Per Mile During DOT Road Check Week

 

Will your truck be on the road during the DOT road check week this year?

According to DOT this year between June 7-9 they will be inspected a lot of truck drivers and their equipment. Last year the DOT’s focus was on brakes, and this year they will be focusing on tires. While many truck drivers,specifically owner operators are driving safe and legal equipment they don’t like being targeted. The truth is DOT can pull over a brand new truck and trailer and find something to write a violation for.

If you are a independent carrier, typically a 1 man owner operator company you wouldn’t want to risk damaging your company’s CSA score over something minor that DOT may find on your equipment. Many carriers that are company driver operation typically put all their trucks for DOT inspections at places like Petro, T/A, Love’s, etc.

dotinspection

DOT Inspection

Do you plan on rolling during the DOT road check this year?

If you plan on rolling remember that rates will be higher. Don’t sell your self short or accept cheap freight. The truck capacity will tighten and majority of the truckers that are on the road will be accepting only shorter hauls due to less driving which equals to less chance of being pulled in for an inspection. If you are a night time driver this will probably be good for you since DOT is not going to have 30 DOT SUV’s inspecting trucks at 2 AM. Majority of the inspections are done between early mornings and late afternoons. It’s a chance for longer miles and high rate per mile to accompany the transportation of the freight. If you are a dispatcher, or a owner operator that books loads don’t leave money on the table this week!

Road Check 2016 Inspection Check List

Be Ready and Prepared:

  • Fire Extinguisher & Safety Triangle Kit: Check that your fire extinguisher is not dirty and dusty, wipe it off in case it is. Make sure that it’s charged and operable. Check your safety triangle kit is in the truck, not broken, and you know exactly where it is when a DOT officer asks to see it. This is part of your daily pre trip, and if you can’t find where you placed it flags rise that alert DOT officers that you haven’t done a proper pre trip. Safety Triangle Kit
  • Proper Documentation: Your log books if on paper logs, should ALWAYS be updated, and filled out properly. Straight lines, clear hand writing will allow DOT officers to do a quicker check to make sure you haven’t violated the HOS Rules & Regulations. It also indicates that you know how to do your log books properly, which is part of being a professional commercial driver. Your documents such as Registration, Insurances, IFTA, Permits,medical card, etc should be kept in a neatly organized folder, and a clean one at that. This makes it easier for the DOT officer to verify that your truck is indeed properly authorized to be on the road. DOT officer does not want to spend 45 minutes waiting for documents to be found with coffee stains over it.
  • Professional Attitude: Your attitude is everything in this world. A DOT Officer is not looking to ruin your day, he or she is simply doing their job. This doesn’t mean you have to make best friends with the DOT Inspection squad, but a professional and kind attitude with honesty will get you far. Poor habits such as smoking cigarettes in the DOT Inspector’s face, and giving them attitude for puling you in may prolong the inspection. Keep politics, and personal beliefs out of the conversation. Don’t play with your phone, blasting music, and smoke cigarettes. Do as you’re asked and go about your day.
  • Clean Cab & Clean Truck: When a DOT officer sticks his head into your truck he doesn’t expect to see a sparkling luxury like in the backseat of a Rolls Royce. He does expect not see piss bottles all over the floor, mold, cigarettes butts, and other dirty habits. If you can’t dust off your dash, sweep the floor, and make your bed, this indicates that you don’t check anything on your truck either. If you can’t keep where you sleep clean and organized, chances are you don’t check for your equipment. Dirty cabs can also call for a thorough search for any drugs, or weapons. Get a truck wash. Doesn’t mean you need to detail your truck, but any oil stains can indicate you have oil leaks. A dirty truck can indicate that you haven’t had time for a wash due to driving nonstop.
  • Citation Quota Myth: Just because you have been pulled in for an inspection doesn’t mean it’s because the DOT has to meet a citation quota. They do have to meet a inspection quota however. What this means is as long as they inspected a certain number of trucks they’re off to go. It’s much more easier for them to meet this quota with passing trucks.
  • Inspect Your Truck: Spend 15 minutes to ensure all your tires are legal by having good PSI, no cracks and good tread. Having an extra spare tire helps in case you do run over a nail during transit and cause damage to your tire. In the perspective from a DOT officer, it’s understanding sometimes things can go bad, but being prepared for it will make them easier on you. Check all your lights, and keep extra bulbs just in case that a light does go out after you inspected it. If you are not sure how to adjust your brakes, find a mechanic shop that will do it for you. $75 can avoid a bigger headache, and your brakes should always be adjusted all the time! If you have extra oil bottles, tools, etc keep those nicely organized as well. This indicates that you do check your truck, and properly organize your tools. Truck Tire Inflator KIt
  • Seat Belts: You will be surprised how many drivers get chosen for an inspection due to being caught without a seat belt. No matter how clean, and brand new your equipment is a seat belt is a violation.

 

 

Money Lost By Idling Trucks

Reduce Idling Increase Profit

Reduce Idling Increase Profit

How much fuel per hour does a semi truck use while idling at night?

It depends on what type of a truck you have. Are you idling on high rpms or low rpms? Is it cold or warm outside? Are you blasting heat or A/C? All these factors have to be considered when idling. It can range from 0.5 gallons per hour to 1.5 gallons per hour.

Cost Of Idling a Truck

If you are idling your truck 10 hours a day average, at 20 days a month that equals 200 hours of idling per month. Yearly that’s 2,400 hours of idling.  At an average of .8 gallons an hours yearly you are spending 1,920 gallons for idling 200 yearly idling hours.

At current diesel fuel prices average of $2.40 per gallon that’s yearly average of $4,608.00. Fuel prices, winter,summer, and more or less idling will obviously either raise or lower that average.

Saving money by reducing idling

If your average of $4,608.00 or more expense of idling can be avoided by at least 50% that is at least $2,304.00 yearly saved. If you have bought a truck on a 5 year term you can pay it off quicker by having extra $11,520.00 in your bank. Depending on your truck payment this can be 3-10 months paying your truck off quicker! Not only would you avoid a lot of interest on your loan, but also save your truck’s engine. Now imagine how much quicker you could pay off your truck or trailer by reducing 75% of idling.

 

Majority of big companies use any and every way possible to reduce idling. Multiply the savings by thousands of trucks by reducing idle times. There are plenty of after markets sources such as APU’s, cab heaters, and more to help you reduce your idle time.  At times we must idle, and that’s alright, but always look at idling from a business perspective if you are in this industry and realize that this is a great way to reduce costs, which will generate more profit in your bank.

 

Tell Me About Freight Factoring

freightfactoring

Freight Factoring

Freight factoring can be good and bad for your business. When you start your own authority your phone will be ringing off the hook with factoring services. You’ve also probably heard about factoring services prior to starting your own authority.

Tell Me About Factoring

Factoring is equal to payday loans. Typically in the transportation industry it’s a 30 day standard to receive payment on the loads you have delivered. Some brokers and direct customer may pay the same day, or can take up to 90 days if not months! By factoring loads, you submit your proof of delivery (BOL – Bill Of Laden) and the confirmation agreement between you and the broker. Once submitted the factoring company pays out the % of the money you agreed upon. This can range anywhere from 15% to 1% of the load gross.

Debating If I Should Use Freight Factoring?

Smart business decision would tell you not to give up any percentage of your loads, however not many people come into this industry with cash laying around. If you need cash flow to keep your business operating you should use factoring. Factoring companies typically have credit check for brokers and customers to give you some sort of a in sight if you should haul a load or not with that customer. If you aren’t looking to use factoring you have other options as well. Other options include getting a business loan from a bank at  low interest rate, or using a broker quick pay option when cash flow is needed for fuel, emergency situations, etc.

Not Sure Which Freight Factoring Company To Use?

If you do decide to factor your loads, I can not tell you which factoring companies are the greatest because they all of course want to make as much money as possible. However, depending your business plan you can decide if you want recourse or non recourse factoring. You also want to look at what’s being offered by the factoring company, such as fuel cards with discounts, terms and conditions on when you want to stop factoring. Fees for termination, and process fees. It’s very important to read through every agreement before signing it. Make sure you don’t even just send a application form before reading it thoroughly or having a lawyer go through it.

Looking For Good Freight Factoring Company?

A good factory company does not have hidden fees. You should be able to factor the loads you choose to factor. Some factoring companies force you to factor EVERY load. Also, you want  factoring company that will allow you to terminate the contract without crazy fees, and at any time you want with at least a 30 day notice. Do not get locked into yearly contracts.

Factoring companies can be great for starting out for someone that is in need for a cash flow. Certainly most business owners will tell you how bad factoring companies are, but everyone has a different business mind and majority of small business use some kind of funding for cash flow. At anytime you read the agreement contract with a factoring company, don’t feel pressured to sign it without having them change certain terms that you wish to be put in place.

Recovering Abandoned Semi Trucks & Trailers

With today’s technology full of tracking devices via GPS there shouldn’t be a reason you shouldn’t know where your equipment is located at all times. However, guys starting out in this industry that are either smaller carriers, or owner operators with an extra truck or two never feel the need to invest money into tracking their trucks. Often you find yourself with a driver that seems knowledgeable, has experience with a clean record and you feel that you shouldn’t have to worry about your truck and trailer. Unfortunately, you can never know what type of a driver you hired until it is too late. He may have depression issues, alcohol or drug addictions, or even be a complete sociopath. If your equipment is ever abandoned is can become a nightmare real quick, and it can be costly to recover it.

Reasons Why Truck Drivers Abandon Semi Trucks & Trailers: 

  • Compensation: There are carriers and owner operators that don’t compensate drivers what they worked for. At the same time, some drivers may feel that they weren’t compensated as much as they thought they would be for the reason of driving a longer route in belief that extra miles they drove will be paid, when there was no reason to do such a thing.
  • Lanes & Home Time: If a driver doesn’t like the lanes and routes you are offering him, chances are he has been looking for a new job, and is ready to abandon your truck and trailer as soon as he is 100% he has a new truck to drive else where. If a drivers feels as if he hasn’t had enough home time, or finds a reason that he needs to go home, chances are down the road once he saves enough money, or secures another line of work, he will abandon your truck.
  • Forced To Drive Illegally: Never force a driver to break laws, especially HOS rules and regulations. Anytime a driver is forced to do so, and has proof that you have forced them to violate HOS rules and regulations he may feel entitled to abandon your truck.
  • Drugs & Alcohol: There are drivers that appear to be friendly, happy guys. Dark side of them is only on the road. You will noticed patterns of low communications, repeated illness, excuses for poor performance such as late deliveries. At this point they will ask for cash advances, and are ready to take a month or two off and do drugs or soak in alcohol. Instead of returning the equipment, they tend to simply disappear.
  • Being Fired: When a driver knows he is being fired for late deliveries, being put out of service for no good reason, or threats, they will leave the equipment because they don’t believe that they will be paid, and also in some cases may try to hold it hostage instead of returning it to the terminal that you asked them to leave it.

What Can Happen To My Semi Truck That Is Abandoned Or Held Hostage By A Truck Driver?

  • Driver may sell parts such as your tools, fuel, spare tires, or even brand new tires to swap with old tires with an owner operator that’s low on money, or a small time shop. Any parts or accessories in the truck that belong to you may be taken and sold via craigslist, or in truck stops for low.
  • If you aren’t sure where your truck is abandoned it may be towed or impounded. By the time you find where it is you may have a lot of charges for the truck to be released, or the impound lot may put a lien on your equipment.
  • An angry driver may cause a lot of damages such as dumping gravel, sugar in your fuel tanks. Pouring water in the engine where the oil goes. Cutting up wires, stealing batteries, unscrewing lug nuts, cutting holes in the air lines, and more.

What To Do If My Semi Truck Has Been Abandoned Or Held Hostage By A Truck Driver?

  • Immediately notify the police. Report the equipment stolen and possible damage. Share the equipment’s last known location, and provide the drivers information and your equipment’s description.
  • Shut off any fuel cards, or any credit cards that might be in the driver’s possession.
  • If you have located the equipment immediately go recover it! Once you are in possession of your equipment again check the oil, lug nuts, wires, air lines, batteries. Call local police to get a report, of what you have found missing, and also while your search to make sure there are no drugs, or sign of drugs that might get you in trouble down the road.

 

Best way to avoid such headache is to make sure you have a GPS tracking device on your equipment. At this time if a driver is driving a different direction than advised call the state police or a scale house where your driver is headed towards, and report it stolen. They will be more than happy to pull the driver over. Report the incident on  driver’s DAC record to ensure they don’t cause the same headache to another carrier,and next time check their DAC report to make sure you avoid any chances of getting one of these drivers. Typically these drivers look to run for owner operators, and small carriers and they will ask you to pay them on a 1099.

 

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