Better O/O rates coming soon

by Robbie Wilkins

Attending both Truck World 2002 and Truxpo over the last few weeks gave me the opportunity to talk to owner/operators from one end of the country to the other. The majority were concerned about their bottom line – or lack of it – and what the big guy had in store for them in the future.

They all had one thing in common. Passion. You could see it in their eyes and hear it in their voices.

Despite the current tough market conditions, they were proud to be truckers. It was never a question of what they were doing for a living; the concern came down to what was left over in their pocketbooks at the end of the day.

They were all doing their best to source out lower diesel prices, insurance rates and repairs but their one common problem was they couldn’t control shippers’ competitive rate demands. If they didn’t accept the shipper’s rate, someone else would.

Are you ready for this ladies and gentlemen? There’s a good chance a change is just around the corner.

For the months of May, June and July, shippers have reported experiencing a shortage of carriers available to ship their products to market. Many of these shippers have clauses built into their contracts that require substantial penalty payments if the customer’s delivery requirements aren’t met. Needless to say, when this happens they aren’t happy campers.

If this continues, expect the old supply and demand equation to kick in. The more demand – the more you’ll be able to charge – it’s a beautiful thing!

Before you head down to the bank to finance that new rig, keep in mind that, if we see a surge in truckers getting back into the business, this trend will balance out.

The ideal scenario for truckers would be for demand to keep slightly ahead of supply over an extended period of time.

According to Lou Smyrlis, editor of Motortruck, Canadian Transportation and Logistics and the Canadian Marketing Managers Guide, we lost 4,000 owner/operators and 2,000 small fleets in 1999 and 2000.

Most of these went by the wayside due to the substantial increase in diesel costs at that time. Those of you who weathered that storm are the survivors, it’s your turn, it’s your time. If you don’t understand the negotiation process, go and get some training. With any luck, you’re going to need it.

Rob Wilkins is the publisher of Truck News and he can be reached at 416-442-2097.


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