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An industry divided, even on rates


Last year, I read an article quoting a so-called “transportation expert,” and his reaction to some 2015 transportation mergers. He felt these mergers could only improve freight rates.

This helped me remember an alternative definition of “expert” that I heard almost 40 years ago.

‘Ex’ refers to not current, or no longer relevant. A ‘spurt’ is a drip under pressure.

Is that too harsh? We’ve only seen downward pressure on rates recently, at least partly because of these mergers. I’m not even entirely blaming the merged companies. Some, obviously, are at fault – not all.

These large mergers seem to terrify the other significant-sized carriers, who were locked out of the acquisition lottery, which seems to fuel some sort of ridiculous challenge to see who can work the cheapest and still remain in business, apparently in the name of retaining market share.

Forgive my antiquated attitude, but if the market in question is just marginally above the break-even point, I don’t want a share of it. There’s no long-term winner in these foolish freight rate bloodbaths.

Trucking revenues remaining pitifully low, just maintaining the opportunity to deny drivers and owner-operators the substantial pay raises they deserve.

This, as we all know too well, floods the industry with even more underexperienced, underqualified, and often unmotivated drivers as older, experienced, and established drivers throw up their hands in disgust and leave the business.

And that nasty, destructive snowball continues to roll and grow, as productivity drops at the same rate as the recruiting door revolves.

If you are a bank, or substantial-sized retailer, you can’t merge with another substantial entity within the same industry without government approval, based on the ensuing economic impact.

The health of any industry overrides the financial desires of the merging companies. It seems to be unfortunately approaching the point where our industry would benefit from such intervention.

Are we ready to relinquish that kind of control to the government, with their amazing records of fair and productive response to everything else they’ve touched? Speed limiters and annual senior driver exams, anyone?

We urgently need to sensibly self-govern, while still maintaining a deregulated industry. We need to stop freight rates from either dropping or remaining stagnant as operating costs increase.

Every other industry gradually increases pricing accordingly; strangely, ours rarely does, even in times of favorable capacity.

If higher rates and pay are ever attainable, now is the time to do it.

Those working for low rates are running out of excuses to continue doing so, and infuriating those of us trying to nudge up rates.

If we’re legitimately trying to improve the fortunes of this industry for all concerned, rates and the treatment of drivers – not limited to pay – must go up, and not by microscopic increments.

Any carrier of any size that slashes rates to starve out their competition is hurting everybody – including themselves – in the long run.

Ever see the cartoon with the progressively larger, open-mouthed fish following smaller ones, all intent on eating the one in front of them? You’re one of those fish. Eventually, in this scenario, you’re lunch.

We should all be here for profit, not exercise.

Seriously, if the large carriers through their associations can continue to agree to lobby for speed limiters, electronic logging devices, etc., why can’t they agree to raise freight rates, industry-wide?

We smaller outfits are already trying, so we sure aren’t going to fight it. This would allow higher driver pay and will reduce the shortage of qualified, safe drivers.

It’s such a basic starting point if the interest is really there to try it.

I don’t get the impression the interest is legitimately present, though.

It’s time to work together for the greater good, which benefits everybody.

***

Bill Cameron and his wife Nancy own and operate Parks Transportation. Bill can be reached at williamcameron.bc@gmail.com.


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1 Comment » for An industry divided, even on rates
  1. John Jones says:

    If you didn’t know better, you’d think there may be something else behind the whole rate/driver thing besides just short term profits hmmmmmm.

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