Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/391783
30 | Overdrive | October 2014 RIDING THE SPOT MARKET BOOM independents, which now has upward of 3,000 members. While there's long been a public focus on cutting costs among owner-operators, now "there's a big interest in get- ting a better rate per mile," says Boblett. For the first half of this year, says Boblett, his dry van's loaded rate per mile averaged $3.40. Grand Marsh, Wis.-based hus- band-wife team Don and Chris Cartledge, for whom Boblett's been negotiating and dispatching of late, have seen their $1.72/mile (all miles) average jump up to $2.38, "a substantial pay increase," says Don. "The money is there," Boblett says. "You've just got to ask for it and know where to look for it and how to set yourself up for it." His group, like a similar group called "Revenue: Knowing Rates and Lanes," is focused on tactics toward $2.50 $2.25 $2.00 $1.75 $1.50 DRY VAN FLATBED REEFER August September October November December January February March April May June July August September October November December January February March April May June July August Internet Truckstop 2012 2013 2014 Before accepting a load, Boblett uses TruckersEdge to get a sense of the ratio of incoming and outgoing loads in the state to which he might be running, then analyzes the ratio. In TruckersEdge, he says, it's a matter of clicking "search map," then selecting outbound loads for your trailer type. Click "update count," and hover the mouse over the state for the number; do the same for inbound. If you see a significantly higher amount of outbound, you're going into a potentially good situation. Internet Truckstop's Pintac mapping function gives similar information at user-specified regional distances. Looking at just the state pic- ture can burn you, Muhammad says, particularly in big states with a large variability by region or metropolitan area. Boblett will use TruckersEdge to burrow down into inbound/outbound or load-to-truck data by city to get a more refined picture. As you move closer to deciding on whether to negotiate any load, both tortoise and hare agree that you're setting yourself up for the strongest negotiating position if the initial call is made by the broker, not you. The volume of broker calls can be a good indicator of demand, says Muhammad, perhaps the best one available to operators using lower-tier board subscriptions. "If the phone is absolutely melting and you can't ever hang it up from phone calls coming in – and sometimes it's really like that – you can name your price." NegotiatiNg the rate Muhammad, knowing lane market rates down to the minute, typically shoots for a small premium on the average rate. He took a broker training course and now is occasionally an agent for the brokerage that offered it, so he empa- thizes with brokers. Still, given the fine data Muhammad can access via 3Sixty, if he knows he's the only truck in an area and is on the spot market, he's not afraid to push the broker to "pay the piper," he says. The RateView tool "shows you the lower average and the top end. If I'm in a hot market, I'll go for the top end. If it's super-hot, I'll go for that and put something on top of it. When we go to the top end, we can always get more than what's indicated on the tool." Internet Truckstop's RateM- ate add-on ($35) to the board's basic carrier subscription "allows the carrier to use any origin and destination in the U.S. and Canada" in different radiuses, says Paul Malone, IT director of sales. It also shows the paid rate to carriers "with various data points and information that can show what brokers and shippers are paying carriers. Last, we show them the paid shipper rates," useful in carrier pricing management. Running as an owner-opera- tor on the spot market, Boblett emphasizes, you should strive toward beating the averages every chance you can and by as much as possible, partic- ularly if you're not doing any shipper-direct freight but are relying solely on the spot freight market and brokers. When you look at the per- mile national, regional or lane averages in your segment (van, flatbed, reefer), you ought to get a fair amount more than the spot average if you want to truly thrive. Reflected in those averag- es as a matter of course are strategic backhauls that get a carrier back to home base, though at a significantly lower rate. Boblett and Muhammad advise adjusting your negotia- tion on loads with a particular low-demand and low-rate des- tination to "take your backhaul with you," in Boblett's words. He gives the example of a load outbound to Atlanta. "A couple months ago," he said in August, there was "a gold rush on produce. As soon as it ran out, brokers could get away with $1.25 a mile. It's like Florida with a two-week peak period. … That means, if you want me to go into Miami, I'm going to total up the miles – all the miles out of Miami I'll have to run to get all the way back to Knoxville, where you can at least get a decent rate. My rate will be based on all those miles." DAT recently changed the nature of lane-rate data available in its basic Truck- ersEdge load board all the way up to its top-tier product. It now defaults to showing the spot market rate average for the past 90 days on the lane rather than the contract rate, which represents shipper-di- rect contracts and is typically higher. The contract rate, notes Harper, "is not very useful for anybody who's playing on the spot market" – the large majority of TruckersEdge users. (Continued from Page 28) Rising spot maRket Rates