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RAY’s Rules Continued

RAY’s Rules Continued April 2010
Some of you may recall that in the February entry to this blog I wrote a piece I called Ray’s rules which was a satirical oversight of some of the issues facing the industry and was meant to insight your comments and feedback. Well I am comfortable in saying that I managed to accomplish what I set out to do. Some of you asked if I would run for Prime Minister of Canada which is too funny and thanks but no thanks, while others suggested I was a hypocritical closed minded backward thinker. The later came primarily from the load broker community, with Mr. Robert Voltman of the Transportation Intermediaries Association having written the most detailed regale on my comments. Before I get into some of the letters I received, as promised I am going to pass on some unedited, additional rules I received from you folks, my comments are in brackets. I think they are worth considering being added to Ray’s rules but it’s your call so let me know.
Rule 11. Any diver who does not shower on a daily basis should be led out of the building to his/her truck & have….! (I had to edit the rest of this because it entails having bodily fluids pored over people’s heads. Subtle as a rock I know but effective. Please driver, clean it up if you’re a “stinky” as no one needs to be subject to poor hygiene at anytime.)
Rules 12. Thou shall not use the CB radio for your own personnel display of racism. The 2 way has a history as a warning device and a platform to develop comradeship. I often hear “professional” drivers nowadays say they don’t turn it on any more because they can’t stand the garbage language and mal-contents. (This one hits home for me as the last two years that I drove, I only turned the CB on to get information I needed. I was completely sick of the complaining, whining and cow tears that never seemed to end). There have always been the loud mouth schnooks who display their poor upbringings over the air waves but what you hear now has gotten out of hand. Sub section to rule 12; each driver shall say one positive thing on the air waves each day. This could be good for you and it may remove the grimace from your face for a minute. It could also be contagious; it could even start to restore the positive use of the CB. (The other way to break this bad habit is to pretend that your kids or mother are listening and to assume that respect is deserved by others until they prove they are not worthy of it.)
Rule #13. I carried an AZ license for over 33 years and it’s always been courteous to flick your lights after you have been passed to let the passing commercial vehicle know that it was clear to pull back in. I am only a four wheeler now but habits are hard to break. I still do the light flicking thing but notice that hardly anybody says thanks anymore. (If you think about it, it is kind of sad that this needs to be a rule but I guess that is where we’re at today).
And now for my letter writing buddies……the Load Brokers!
Rule #14. (A Ray’s Rule proposed by ME!). Every shipper releasing freight from their dock must write the cheque for the freight to the trucker who physically pulls the load, if they don’t they must then disclose on the front of the BOL the full freight rate with currency and calculation used to determine the rate; by the pound, linear foot or mile. They also must disclose all demurrage charges, including fuel surcharges and waiting times along with their payment terms on a clean bill of ladings etc. Any shipper not complying and found guilty will pay a 10K fine per shipment to the widows of our fallen soldiers or to the families of drivers who have lost their lives while trucking?
There, how do you like me now load brokers?
I saved lots of space for you guys as I am not sure you got the intention of the original article. It was a satirical look at the industry and what I would do if I had carte blanc to change what I wanted with the simple writing of a rule.
Here’s the simple truth folks. In my past I have owned and or operated trucking companies that sold freight. Never did I say I didn’t but to be clear I have never been a pure load broker. That being cleared up I happen to believe that we would all be better off if there were no such thing as a pure load broker. Let me explain why. There is simply no room for three to dance with today’s freight rates and for the trucker to make money. What you have with a pure load broker is a system of redundancies in the transaction between the load broker and a trucking company. Both have collections departments collecting on the same load, both have billing departments billing the same load, both have dispatchers dispatching the same load, both have payroll taxes, rent, hydro, heat etc. There is no way that you can do all these jobs twice along with every other necessary item needed to operate a business and for both to make money on the same load, especially in a down market with predatory rates. It cannot be done! A trucking company that sells freight already has these infrastructures built into their trucking operation as normal course of business, the cost of operation for them on a sold load is less!
Here are some more hard truths. For the vast majority of trucking companies, the pecking order of preference for where they get their freight from goes as follows:
1. Direct customer solicited by the trucking company.
2. Trucking companies who broker freight.
3. Pure load brokers
This is also the order of best receivables to worst, pure load brokers are always the slowest paying (remember they have to collect the money then turn around and pay the guy who did the work and they do not have regular trucking income coming through the door). This is also the order of least service failures to most as again there is one too many hands in the pot as all instructions are given to the load broker and then once again given to trucking company and finally to the driver.
On a final note, we as an industry would have a very difficult time surviving without the brokering of freight. My primary area of trucking throughout my career has been North America and all points between SW Ontario. No trucking company could possibly have sales representatives everywhere. So we rely on buying loads occasionally. Simply stated I would prefer to buy the freight I need from a trucking company that has a brokerage division servicing the area I need a load. Period! Its dollars and sense!
Safe trucking!

Ray Haight

Ray Haight

Mr. Ray Haight has enjoyed a successful career in transportation starting as a company driver and Owner Operator logging over one million accident free miles prior to starting his own company. After stepping down from a successful career managing one of Canada’s 50 largest trucking companies, Ray focused on industry involvement including terms as Chairman of each of the following, the Truckload Carriers Association, Professional Truck Drivers Institute, North American Training and Management Institute and the Ministry of Training Colleges and Universities voluntary apprenticeship of Tractor Trailer Commercial Driver, along with many other business interests, he enjoys a successful consulting business, also sitting on various Boards of both industry associations a private motor carriers. He is also Co-Founder of StakUp O/A TCAinGauge an online bench marking service designed to assist trucking companies throughout North America focus on efficiency and profitability within their operations.
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12 Comments » for RAY’s Rules Continued
  1. Shawn Jameson says:

    Well said Ray
    Things need to change in this Industry
    Load brokers need buy some equipment of there own and then maybe they would learn how to put a decent
    rate out there
    Shippers should be responsible for the loading of trucks and follow a safety rating system also
    I will vote for you for PM Shawn

  2. Ray,
    I agree 100% with your rules.
    Outridge Consulting Services

  3. jimh says:

    As a load broker said in a previous blog, ” if you don’t like load brokers, don’t use them.” If you are not happy with the rate then negotiate for a higher one or leave the freight on the dock. As a former O-O at your (ex-)company Mr. Haight, I have seen the results of accepting poorly paying freight. That’s why I am a FORMER O-O of yours.

  4. Rick says:

    Shawn Jameson (above) obviously doesn’t understand that brokers don’t set the rates..the marketplace via supply and demand does that.. Instead of relying on load brokers for freight maybe he could pickup the phone and find his own..If you can do better on rates, Shawn, then why don’t you?
    Ray..your column..your rules..your opinions. However when you refer to ANY group in a derogatory manner you’re apt to draw letters of criticism…that’s not brokers..that’s human nature. To your credit you did not repeat that silliness about skin in the game..thank you.
    Your follow-up column mentions redundancies and no room for three to dance. appear to be wrong on that as there are an awful lot of loads that have three and more parties in the dance. And there’s nothing wrong with that provided each party provides a “value added” that justifies that party’s cut of the freight charge. So..IT CAN BE DONE (and apparently it IS being done). You forgot to mention (or perhaps don’t know) that brokers add something of value to the transaction which justifies those “redundancies”..or else why on earth would brokers exist at all?…As far as I know there’s no law that requires the use of brokers…so brokers are used by shippers, receivers, and even carriers out of pure freedom of choice.
    About the pecking order of preference..maybe you’re right. I don’t know. All I can tell you is that I never have a problem getting trucks…and I have carriers calling me for loads every day.
    About best receivables to worst..not true. When you generalize like that you do the better operators a great disservice..some of us do pay within 15 days like clockwork..
    Moving on to service levels…my largest accounts hire me for two reasons: Number 1..they move upwards of 500 loads every day…and they need trucks quickly. The fact that I don’t own trucks is about as relevent and meaningful to them as my wife’s hair colour. I can get them trucks… and often on very short practically any destination in North America. THAT’S WHAT MATTERS. Reason number 2) SERVICE..yes indeed..contrary to what you stated..having a good broker in the middle who can think on his feet improves service levels. Let me illustrate with an example that plays out almost every day of the week. Shipper tenders a load to me..I hire a carrier…carrier cancels truck (breakdown, problem etc) and cannot get me another one..I hire a replacement truck from another carrier..shipper’s load is moved and shipper never finds out his initial truck cancelled. I also manage appointments and all the other details that result in service excellence. Without wishing to overstate my own’s a fact that without me in the middle my own shippers would have many more truck cancellations and service issues to contend with.
    Again, I don’t know about the pecking order of preference. I do know that I supply some of my carriers with all of their loads.. I also provide interest free financing on equipment purchases they make..(because having them grow works to my benefit as well). Doing those things..paying my bills on time..and paying fair rates that involve a profit for my carriers all ensure that I always have trucks available..(even if I don’t own any of my own).
    At the end of the day it really ain’t so much about WHAT you call carrier, broker, shipper, etc..99% is about how well you perform.

  5. Ray Haight says:

    Rick it appears to me that you might be one of the better brokers in the industry and if that is so please bear with me and my contemporaries as we rant a little. I have admitted before and will do it again good load brokers are a necessary part of this industry; I have operated as an irregular route carrier for the majority of my career and have relied on brokers to be successful over that period.
    Shawn’s endorsement of my rules concerning load brokers comes from his experience like mine where 80% of this sector have little concern for the other party’s success in the transaction and bleed it to death. I take exception to your comment that there is nothing wrong with having 3 or more parties involved in one shipment, that’s a crock, there is only one party doing the trucking here.
    In your reply to me please feel free to include the name of your brokerage firm so that your customer can see that you endorse double or even triple brokering a load, you can’t justify that man, no way. Your explanation of what service you provide a shipper sounds exactly like what a shipper’s role description should be.
    Rick you finance equipment or zero interest and pay all your bills in 15 days you will never be without loyal truckers who will want to work for you, your last statement is right on the money, with one small exception:
    You say: At the end of the day it really ain’t so much about WHAT you call yourself…i.e. Carrier, broker, shipper, etc…99% is about how well you perform.
    I would change this to this: At the end of the day it really ain’t so much about WHAT you call yourself..i.e. Carrier, broker, shipper, etc…99% is about how well you serve others. Your business must bring value to the marketplace or it will not survive in the long run.

  6. Rick says:

    Those are good points Ray..
    I do work like a shipper…quite often brokers are used in place of a shipper’s traffic department..that’s the case with me alot of the time. However I don’t endorse double or triple brokering. In fact, I have put measures in place at all of my shippers to stop that practice dead in its tracks. Once I secure a truck I provide my shippers with the name of the carrier and that carrier’s DOT number. If a truck shows up with anything other than that name DOT on the side then that truck is not loaded. Moreover I make sure my carriers know that anyone who is inclined to double broker thinks twice about it.
    When I say that ther are often justifiably more than two parties involved…I count the broker..the carrier…and sometimes one or more factoring companies. I personally don’t use factoring companies, but alot of other carriers and brokers do. So it is possible to have the broker factor the shipper’s bill..and the carrier, in turn, factor the broker’s bill..that happens alot..that’s four parties in the mix…and you’re right..that rate gets sliced pretty thin. However, all parties involved have a legitimate claim on their cut and therefore the rate needs to be sufficient to begin with.
    Your last point is true..your busines must serve others..and I look at that as how well I perform. I prosper to the extent that I’m of value to my shippers, carriers, and even others like the tax department.
    Shawn and others do have a right to be concerned about unsavory business tactics, skinny rates, and not getting paid. I too have those concerns…I have bad debts every year due to shippers who don’t pay their bills…I have one now (in Winnipeg) who owes me alot of money and finds my collection efforts humorous..So if people think that their payment problems will go away by taking out the middleman they might be in for a rude awakening..many shippers are having a hard time and some more like to take advantage of people. By the way, that’s why alot of brokers fail..they get into the biz with the false assumption that all shippers are on the up and up..and they dutifully make their 50 to 100 sales calls a day and inevitably snag a stinker who doesn’t pay. That happens ALOT. I’ve been very LUCKY in that regard…right from the get go I’ve found good customers, with a few ntoable exceptions like the aforementioned shipper in Winnipeg. But in all cases my carriers get payment issues with my shippers do not get passed on to the carriers.
    Keep up the good work Ray..look forward to reading your colunms..

  7. Jo says:

    Wow. I feel really sorry for you going through life being so cynical.

  8. Jo says:

    I feel really sorry for you being as cynical as you are. Have you thought about changing professions?

  9. Robert D. Scheper says:

    Greetings Ray. Good comments and impressive heart’s passion. I havn’t been ignoring, you I’ve been overloaded. I’ll be commenting only rarely in the next eight to ten months, but don’t take that as a slight (very busy year… many irons… deforesting for fire). Attention “Jo”: Ray is NOT cynical! Changes cannot be made without first vigorous dialogue. Movements start with personal opinions, as opinions grow in momentum, pressure builds and accomodations are made. If the accomodations are not enough the opinions will eventually burst through opposition. Mock if you like but industry efficiencies and justice are birthed in individual expression and individual action. It is the way of Adam Smith’s invisible hand. Nobody (including Jo) can stop truth, justice and equality when freedom of speech is available. Ray… long live your blog!

  10. Renaud says:

    Load brokers have replaced traffic manager in large shipper, the shipper pay your salary in the rate instead to pay an employee. the shipper win , the load brokers take has much as they can out of those rates to pay themself. load brokers win on the back of carriers who do all the hard work. it look quite simple to me

  11. Ray Haight says:

    Hey Robert good to hear from you man, I missed ya, tax time right? Keep up the good fight man and thanks for reading.

  12. Stephen Large says:

    Hi Ray, I like your rules! As for rule #12, most older and experienced drivers hardly turn on the C.B. anymore unless they want to talk to a buddy they see going the other way. The foul language and poor content is enough to make a guy sick! If some guy has a legitimate complaint, then fine, but say what’s on your mind and get over it. Rule #13; I think this and also the guys who back into the dock and leave their headlights on, blinding anyone who may be trying to back into the dock beside them is just a really good indication that the driver is inexperienced and has been instructed ‘by the book’ at a driver training outfit by someone else who is also inexperienced! Or, maybe, after a decade or so of ‘idiot-proof trucks, have we created some idiots? ( I’m told that many newer trucks have been set up so you can’t blink your lights or turn them off manually )Any drivers who learned from running with an old hand from the 70’s and 80’s would have been properly trained that these were curteous ‘rules of the road’. Rule #14; Just charge by the hour for all loads hauled. Start charging when your driver goes out your gate and charge until he gets back to the yard. Any shipper who refuses to pay by the hour has got a problem getting their end organized, so they are afraid to pay that way. As long as there are carriers who will haul by the mile or by the box or by the ton, shippers will have their way with the truckers. It took me 18 years to do it, but in 2001, I decided that I was going to charge by the hour, round trip, from my yard and back to my yard. Granted, I don’t get as much work as I could, but I have some customers who are organized and the hourly system works fine for them. I have been to Winnipeg, Vancouver, Fort McMurray,Ab and even Fort Nelson, B.C. by the hour, round trip a few times, but usually get shorter trips around Central Alberta. I don’t care what the customer thinks about loading, unloading or waiting time, the clock is ticking, so they better get their butts in gear and make it happen. It’s funny how some of those places that used to take hours to unload can be so fast now!

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