Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: https://read.dmtmag.com/i/522363
June 2015 | Overdrive | 39 CYCLE ANALYSIS those states," says Boblett. "This is an area where, if you stay in this area and bounce around within this area, you can make good money." The Midwest-South area, with Georgia and Arkansas on the Southern end up through Indiana and Illinois at the top, is "an area that I predominantly do," he adds. For operators farther afield from good-rate states, such as Waco, Tex- as-based Blankenship, geography has led to different strategies, including a good bit of planning for loads outbound from low-rate areas, with negotiations taking place farther in advance of pickup. In spite of the reportedly booming spot market this past year, Texas "seemed to fall off the map in terms of availability of freight," he says. "I used to get calls on local little 100-mile runs here and there" with his reefer. No more. To get back from a routine haul outbound from Texas to Mississippi, Blankenship was working regularly with a broker on a run that picked up in Decatur, Ala., hauling hot wings for Papa John's. When fuel prices fell, the broker lost the Alabama-to-Texas lane "to somebody cheaper." Quarterly reefer rates outbound from Texas tracked along about 10 cents below the national quarterly averages for reefer throughout the first nine months of 2014. In the final quarter, however, things changed as fuel fell. The national average reefer rate rose to $2.50 a mile from $2.46. On reefer loads outbound from Texas over that same time, rates fell a nickel on average to $2.31. Blankenship believes there is plenty of opportunity for "owner-operators who stick it out" in areas across the country, given pressures that make it difficult for larger fleets to expand. Moscrip sees no let-up in the strong demand that has driven the spot market since last year. Even though economic growth is fairly slow, "we certainly aren't adding capacity to stay ahead of it," he says. "Tight capacity has gotten rid of that cushion that shippers and brokers used to rely on. Used to be we were at about 98 percent utilization of active capacity, but we're at 99 percent now and on our way to 100. … "Because it's tight, it's really boosted rates," Moscrip says. "For five, six, may- be even seven years, fuel prices by and large determined rates. Last year and the year before, capacity really started to determine the rate. When you look at fuel today, it's approximately a third of the cost of running a truck. We've seen fuel down 30, 40, 50 percent in some places, but we haven't seen that corre- sponding drop in rates as we've seen in the past." What new capacity is being added, Moscrip says, is in the small fleet and independent owner-operator realm. Larger companies are in many cases "firing customers instead of putting on a new truck. … We see a lot of new small companies coming in," but not enough to substantially lessen the capacity pres- sures driving rate growth. Blankenship, like many others, hopes that such dynamics continue and deliver "some kind of reward at the end of it." On which day should you negotiate and book the load for the best rate? Sunday 4% Monday 7% Tuesday 6% Wednesday 9% Thursday 13% OverdriveOnline.com poll How far in advance do you negotiate most of your loads? Friday 40% I don't know 17% Saturday 4% The day before pickup 25% The day of pickup 23% All of these apply, but none represent a majority of loads 23% I don't know 4% Two days or more before pickup 25% Almost half of all owner-operators negotiate for loads on the day before or day of pickup, according to this April polling at OverdriveOnline.com. Online extras OUTBOUND RATES IN ALL STATES | At OverdriveOnline.com, search "rates heat maps" to explore state-by-state average rates by 2014 quarters with our interactive U.S. maps. LOWEST OUTBOUND RATES BY TRAILER | Search "rates hall of shame" for the lowest-rate states for outbound freight in van, flatbed and reefer segments. " Weekends and after hours, if I can make myself available to go and work during those hours, I'll post my truck. " — Chad Boblett, Kentucky-based dry van owner-operator