I remember 20+ years ago when manufacturers needed trucking companies for the movement of their product. The trucking companies with the contracts would spread the word that they had loads to move and they would call upon people in their network within the industry to find drivers needing loads, thus creating a mutually beneficial relationship. Referrals were common and this created very strong and healthy business relationships. There was a tremendous amount of cooperation; we needed each other.
Today, with the ability for anyone to access load boards online, customers can simply post their need for product transportation and they take bids to get the best price. While this is great for competition, it’s the drivers that ultimately suffer. The reason is because there are so many trucking companies and owner/operators bidding against each other, the actual cost of hauling that freight is driven down artificially. Margins have shrunk to the point that drivers and companies are making pennies on the dollar and that is simply not sustainable.
Dozens, if not hundreds, of owner/operators and trucking companies alike close their businesses each year due to shrinking profit margins and an ever increasing pool of competition. This is not good for business and is not good, ultimately, for the industry.
We all know it, but no one is saying it; rates must go up. Shippers, manufacturers and brokers all need to understand that the operating costs of running a trucking company or even running your own rig as an owner/operator is not going down; it’s going up. This means that what it costs to ship your freight needs to go up at a pace similar to those rising operating costs. Unfortunately, this won’t happen unless there is some catalyst that makes this happen.
Here at NTC, we are always looking for new ways to bring about positive change to the industry and we have a plan for bringing the industry back to being about mutually beneficial relationships. We can’t share anymore right now, but we promise that it’s going to catch your attention.