Letters: Wise Up, 3PLs
These Letters to the Editor appear in the June 22 print edition of Transport Topics. Click here to subscribe today.
This is mostly addressed to anyone in third-party logistics or the brokerage business:
Look, I know we’re in a national recession, money and credit are very tight and the banks are hogging all the money and have put wicked restrictions on everyone’s cash flow. But despite these money problems, third-party people seem to expect the trucks they hire to run for nearly free — especially when it comes to hauling overdimensional freight.
It blows my mind how many people in the brokerage business, for example, try to help customers move OD loads but don’t have a clue about what they’re doing — something that shows up in the way they rate their loads.
I almost believe they want truckers to take money from their own pockets to move the freight. My gosh, people, do you really think the states along the way and the escorts — especially police officers — are going to adjust their pricing that much?
Road escorts still average about $1.40 per mile for standard and at least $1.80 per mile for the pole cars making sure taller loads don’t hit a bridge or low-hanging wire. Permits still cost the same, if not more, and many states are increasing restrictions on where trucks with OD loads can run, leading to routes with longer mileage. Engineers still charge the same for route surveys, and when states restrict routes, the miles get longer.
A supersized, specialized 13-axle trailer costs about $500,000, and anyone willing to make that kind of investment should see at least $20 per mile — plus permits and escorts as needed.
An owner-operator today makes an average of $150,000 per year. That might impress some because it’s a six-figure income, but with taxes and truck expenses, in many cases an owner-operator goes home with less than $30,000 a year to support the family.
In times like now, many owner-operators won’t begin to make six figures and will have to decide whether to feed their families or keep up with their bank loans.
Something has to give: Truck and parts prices, fuel costs, insurance, taxes and the hourly rate for truck maintenance all have gone up. Yet rates per mile have gone down.
Is there any logical reason for a rate of 50 cents a mile for a van? At a bare minimum, a van trailer should be at least $1.25 per mile plus the driver’s salary, typically about 40 cents per mile.
If you drive a flatbed, step deck or double-drop trailer or are into OD freight, the price should go up automatically, because it costs more to buy and maintain that type of equipment. With hazmat loads, the rates should be higher yet — higher risks should mean higher rates.
Sure, 3PLs can provide customers with all kinds of auditing services, but without carriers to support them, they have no one to move the freight. Yet they seem to expect the driver to dip into his or her pocket and pay these extra costs. That’s like going to the grocery store and expecting the proprietor to pay part of your bill.
If carriers ever start advertising effectively and working more closely with direct shippers, the middlemen in this industry would be hard-pressed to compete.
Dan Mitchell
Owner
Danstar Transportation LLC
Somerset, Wis.
