Nearly immediately after the events of 9/11, there was a slowdown in transportation because of uncertainty. Uncertainty about what was to come, questions arose about will there be more attacks on US soil? What about the oil industry? Prices on diesel fuel and gasoline spiked tremendously in the days and weeks following the attacks. Market uncertainty played a huge role in commodities and transportation industries.
It seemed as if the whole nation was stunned. I was a cargo expediter for two companies in Milwaukee, leased to both at the same time, both of which were suddenly slowed, I spent many hours glued to my Blackberry and my cell phone waiting for calls to transport goods. It was as dead as it could be. Nothing was happening.
In the following month and months after this time in history, I had hauled some DOD items from one location to another and the pay for hauling these items was fantastic for about 6 to 8 months. Then the bottom dropped out again. I can tell people I have first hand knowledge to tell people that the transportation industry is highly unpredictable. Trans. company owners, dispatchers and their drivers never know what to expect from day to day.
Nearly a year after 9/11, things were improving somewhat, but my bottom line wasn't doing much better. I did several expedited loads to places east, Pennsylvania, Ohio, New York, and Virginia. Settlement checks were given at approximately two weeks after a run was made. I was shocked to find that my payments for some of these runs was very low. For people who don't know how trucking companies pay their owner operators, we work on a percentage basis, that is at the time I worked, I received around 45% of the total transportation costs charged. The trans. company kept 55% of that total. If the rate charge was $1.50 per mile, and the trip one way was 800 miles, the trans. company would bill the shipper $1,200.00, and I would receive 45% of that, normally. But these were not normal times, several of the runs I made were lowballed by the trans. companies I was leased to, and ended up with only about a 30% cut of the total billed. Out of my cut, I paid on a 1$M insurance policy-liability and cargo insurance, fuel costs, maintenance, tolls, meals, and all the good stuff a driver needs on trips. It was difficult to remain solvent.
The days of cutthroating were here. If a shipper needed a load transported, they'd call trans. Co. #1, and if the shipper thought that was too expensive, they'd call other companies and try to obtain a cheaper rate. Nine time out of ten, trans. companies would cut rate others, just to get their business. Today, corporations like Amazon, Walmart, and other that offer free shipping are helping undercut the trucking and transportation industry. Which is why many have gone bankrupt in the past 10 years. Some just can't operate a fleet and work for next to nothing.
I had a brief chat with the operations manager about the lowballing and my settlement checks voicing my dissatisfaction with such and he told me some money was better than no money at all - sitting idle. I let him know that it would be more beneficial to me not to even operate under those pretenses.
Has anyone noticed why the US postal service in recent years has been having difficulties keeping it's head above water? In recent years, the postal service has been forced to raise it's rates several times.
Companies like Celedon probably pay their drivers a percentage too.
"Truck drivers that are paid per mile see varying wages depending on their experience, the region they work in and the company they are employed with. A majority of trucking companies pay between $0.28 and $0.40 cents per mile according to the U.S Bureau of Labor Statistics. A few companies do pay up to $0.45 cents per mile."
The link below shows the average cost per mile of what trucking companies can charge for freight transportation.
There are two types of trucking which might be highly profitable these days. One is expedited freight, this is when a receiver of a shipment absolutely has to have the shipment from a vendor or manufacturer on an immediate basis, and are willing to pay extra if the shipment can be received within a matter of hours or within a day.
The other is LTL carriers. The LTL carrier usually has a warehouse where many shipments are received and at that time, the shipments are gathered together in one place, and loaded later on a trailer which will make several stops along a route. The benefit of the LTL carrier is being able to charge the shippers of such goods individually, thereby maximizing the loads leaving their warehouse facility and maximizing their profits. Each shipper is charged while the LTL trucking company cleans up on profits. LTL vs FTL, or full truck load, FTL is usually a truck load of one or two products or items of the same with no stops in between, is much less profitable for a trans. co.