New Radio Show --- Audio Blog?

If you've misssed it, here's the skinny...

In April the 3PL Radio Network signed on. Now, what is 3PL Radio Network? Good question, 3PL Radio Network is a radio station dedicated to the transportation professional. A mix of news, talk, information, weather, entertainment, and classic rock.

TALTOA's Trainer Mike (from our Podcast) is host of TALTOA's Transportation Minute and TALTOA's T&L (Transportation & Logistics). Transportation Minute is an infromation feature broadcast on 3PL that deal with different topics broadcast several times a day.

www.3plrn.com

TALTOA's T&L is a pre-recorded call in radio show with a new show broadcast every Wednesday and re-broadcast at different times throughout the week. You're invited to take part in the show by calling 724.444.7444, when prompted for an ID enter 8140 followed by the # sign.


Call times for the show are scheduled several times a week. The process is simple, go to the TALTOA Home Page (www.taltoa.com) and click the "More" option in the Talk Chat Box. A new window will open diplaying the next call time for the show. If a show is open for calls it will display a "Listen Now" button which will allow you to tune in and listen to the calls live and provide instructions for calling.

Hope we are able to talk soon...

The Last 30 Days...

A little over a month ago I left the confines of the office and went back out on the road. Due to the RV manufacturers normal July shutdown, I decided to go out on a big truck.

It was interesting to say the least. It was nice to be back out on the open road traveling many highways I hadn't been on in years. The first couple of days I was reacquainting myself with a big truck, after that I was able to be more observant and compare then and now.

One of the things I noticed was much of the foolishness on channel 19 had died down quite a bit. It was still a tad bit raunchy around the truck stops, but much tamer than I remember it being. I think satellite radio could be the main reason for the for the long overdue maturity.

Another thing I noticed was the slowdown of the majority of the trucks. I had been assigned a 70 MPH truck and thought I would be next to the slowest thing on the road. To my surprise, I was faster than most. This was a fantastic move by trucking companies. More than fantastic...a must!

This is something that has perplexed me during this fuel crisis, the speed limit. I remember in the 70's when President Nixon lowered the national speed limit to 55 M.P.H. Not a popular move and I'm sure it wouldn't be today either. The statistics of that day shows that fuel consumption was reduced by only 1% or less. Personally I find this hard to believe.

While transporting RV's I experienced as much as a 10% increase in fuel mileage (dependent on weather conditions and terrain) by slowing to 55 MPH. Big trucks would have to experience more than a 1% savings to justify slowing their trucks down or they wouldn't do it. Keep in mind that the motors of today are much better than those of the 70's. In the 70's there were no computers...just points, plugs, and condensers.

Another observation was that traffic on the interstates seemed to be less as well. The majority of the traffic that was traveling had slowed a good 5-10 MPH from the posted speed limit. A good thing but aggravating at times as well.

My first 2 weeks out I noticed that the RV Transporter traffic was down. Normal considering that the majority of the plants had been shut down in July. But I will admit, it was a bit worrisome. Was the RV industry over? Could it be that the last nails were being driven in the RV industries coffin?

Since the first of the year everyone and anyone in the RV industry has been concerned. To be honest, you didn't have to be in the RV industry to have a worried expression on your face about the future.

Then finally a break, news that oil was finally going down. Not to the level of last year but finally headed in the right direction after what seemed like an eternity of going up everyday. As I write this oil is down another $3.00 a barrel and the average price of diesel is down over $.10 per gallon from a week ago. Finally!!!

The last couple weeks of my big truck experience proved promising as well. I began to see hundreds of transporters with new RV's on the road to a dealership somewhere. I knew I was seeing more and more units on the road, but being gun shy after the past 7 months I wanted to make sure I wasn't seeing the same one over and over again. I called a friend of mine at an RV transport company for confirmation.

Not only did I receive confirmation I was told to send drivers. Hallelujah!!!

Now, this doesn't mean that we're back to the good ole days of a year or two ago but it is the first real positive sign in months. What's next? RV manufacturers will be doing some fancy re-designing I'm sure. More fuel efficient lightweight towables. This will be great for the consumer and the transporter as well.

In reality over the past 10 years the towables have gotten larger and larger. Up until this last crunch many manufacturers were attempting to go even larger, legally. RV's are considered RV's up to a certain square footage of living space, any larger and they're a mobile home.

Many of us can look at some of the towables today and remember that not that long ago those would have been considered mobile homes. Some are just huge! With the emphasis now on becoming fuel efficient and lightweight, transporters should begin to see a higher profit margin in the not too distant future.

Today someone wishing to enter the RV transport business is in a better position than those entering as little as a year ago. Today you can buy a truck for as much as $10,000.00 off the sticker of a year ago. Just last week, while in Michigan, I saw a commercial where one truck manufacturer had resumed employee pricing on trucks.

Is the RV industry dead or dying? Not by a long shot. Is there money to be made? You bet if done right!

How Can I Become A Freight Broker

It’s hard to believe that it’s been nearly 20 years since I started my transportation career, looking back I can remember wishing that I knew the answer to that question. As I learned nearly 20 years ago and what you’ll soon learn is the easy part is becoming a freight broker, the hard part is being a successful freight broker.

I could furnish you a list as long as my arm of companies that would contract you right now, with no experience. Why shouldn’t they, it’s not costing them anything except a little time. Don’t misunderstand me; they would prefer you to have experience, transportation knowledge or some kind of understanding about the business. But there are many that will play the odd’s game of contracting freight brokers with no experience.

The odd’s game is that if you contract enough freight brokers you’ll eventually have one that makes it. The average freight broker contracted to a freight brokerage earns a 60% commission, on average. This commission is derived from the difference of what the customer paid you to move a load and what you paid the truck. The 40% goes to the freight brokerage with whom you’re contracted.

The freight brokerage knows how many agents they must contract in order to find one that can make it. Of course the experienced freight brokers don’t fall into that picture as it is much easier to contract an inexperienced freight broker. Experienced freight brokers are a give-me.

By playing the odd’s game the freight brokerage can’t lose. Over time they become the big winners as long as they retain their agents. The losers in the odd’s game are the ones that took a chance with little to no transportation experience and didn’t make it. They are the ones that purchased equipment and have been without a steady income for “X” amount of time.

In the early 80’s I answered a blind help wanted ad in the newspaper. I was in my early 20’s and really hadn’t figured out what I wanted to do with my life yet. The ad ended up being for an insurance company looking for agents. They would train me for two weeks to pass my state test to get a license. Afterwards, contingent on my passing the test, they would contract me as a commissioned agent. By commissioned I mean I would make a commission of what I sell.

During those two weeks of training I was exposed to other agents coming in and out of the office every day that had made sales with commissions in the hundreds of dollars. The more I watched the more determined I was to make it. Not knocking anyone from those days, but there were several agents that were making great money that convinced me that if they could do it, I could do it!

I got my license and became an agent. I was fired up and ready to go. Five days later I was still ready to go and really fired up because I hadn’t sold anything yet. I was really fired up and still motivated because I kept seeing these other knuckle heads make money doing it. I was determined.

Five more days later, I was really mad. Not even a nibble. I mean it was close to being embarrassing. Right then and there I knew I was missing something and that something was how to sell. That Friday afternoon I went straight to the library and checked out all the books they would let me on sales.

That weekend was nothing but a constant study hall. But it paid off. That next week I sold my first policy and that was all I needed. Once I was able to accomplish that it wasn’t a matter of trying to make money as an agent, I was an agent!

The insurance company was playing the odd’s game. They knew that all their investment would be was a little time…and a newspaper ad while their reward would be the agents that made it. It was up to the agents to make it or not. I chose to make it by learning as much as I could.

Being a freight broker is much more than just having loads to put on trucks. You’ve got to know how to sell, how to negotiate, how to prospect, how to set rates…and the list goes on and on. This is one of the reasons many in-experienced freight brokers fail, just as I almost had with insurance, they’re not prepared.

If you’re serious about becoming a freight broker you should give yourself every opportunity to succeed. Do this by educating yourself on the industry as a whole. Learn what you must know and always understand that you’ve never learned it all.

The Price Of Fuel...

This is a concern to all not just those in the RV transportation industry. The commercial transportation industry appears to be taking the brunt of the impact but it's hitting everyone. Not just in the fuel you buy, but in your everyday purchases as well. The items we use in our everyday life are being affected because some form of commercial transportation delivered them. When fuel goes up the price is eventually passed down to the consumer. Same with the RV transportation business.

The RV Transport companies charge their customers a base rate PLUS a fuel surcharge. The fuel surcharge is in addition to the normal rate charged to move a load from origin to destination. If you've been to FedEx, UPS or any of the other courier companies lately you've experienced a fuel surcharge.

All reputable RV transport companies pass 100% of the fuel surcharge to the transporter. As of this writing, I am not aware of any company that isn't passing this to the transporter. Believe me, if I knew of any company that was keeping a percentage of the fuel surcharge for themselves, I'd list them.

Now before I get letters, every company has their own way of calculating the fuel surcharge. If a company is paying a little less fuel surcharge than another it's probably because of their fuel surcharge agreement with their customer, not them being dishonest with the transporter.

It's not to the transportation companies benefit to skim any of the fuel surcharge. Let's face it, without the transporter the transport company is out of business. The entire industry is shut down.

What does this mean for the transporter? Basically that there is still a lot of money to be made. It's true that the price of fuel is keeping a lot of potential transporters away. Many may not be aware of the fuel surcharge.

One major transport company has published their fuel surcharge numbers that show the cost to the driver for fuel after fuel surcharge is only $1.89 per gallon. Another major company is paying an extra $.05 per mile bonus for new units being delivered.

The RVIA (Recreation Vehicle Industry Association) has predicted that RV shipments in 2008 are expected to be the fifth highest in 30 years, and well above the most recent ten-year average.

Using current fuel prices, I entered a 900 mile trip as a model in my computer. For transporter pay I entered a low $1.21 per mile. Gross pay for this trip would be $1,089.00. To make it more interesting I entered that I had to drive 800 miles empty to get to my load (trailer). At 17 mpg empty my fuel cost showed to be $190.59. With trailer and traveling 900 miles my fuel consumption dropped to 12 mpg with a fuel cost of $303.75. At the end of my trip my net after fuel totaled $593.47. Not bad for 2.5 days work and 800 miles empty.

What does all of this mean? If fewer transporters are entering the industry because of the fuel prices and 2008 shipments are expected to be the 5th highest in 30 years...It means to me that there are more trailers available to deliver which means more money in the pocket. There is a silver lining.

Let's Ruffle Some Feathers

I've been biting my tongue for some time knowing that I would only be causing myself trouble by posting my thoughts concerning the state of the trucking industry. This isn't something that I just decided to write about on a whim, it's been building for a while. It seems to have growth spurts every time I see a driver being interviewed by the media concerning the state of the trucking industry or when I read the rants of a driver that has written an article or a letter to the editor with their feelings.

I'm all for free speech and the sharing of ideas. This might be the most American thing we can do. However with this freedom comes responsibility. The responsibility to learn the facts before making statements that further jeopardize your brothers and sisters who are also in the industry. The responsibility to reflect on your own business practices before condemning others of theirs. Remember '05 and the rate FEMA was paying you? The detention time? Couldn't one easily say that was more than your fair share?

Unfortunately the drives I refer to represent themselves as owner operators to the press and in their writings. As such one would think that they would have a little business savvy. Case in point, if the load doesn't pay enough you don't take it. You find another. It's time to quit being a steering wheel holder blaming everyone else for your problems and start being business people.

Every report, article, or letter I come across or is brought to my attention always has a reference about freight brokers taking more than their fair share. What? What exactly is their fair share? If a shipper were to offer you $5.00 per mile on a load when the market rate was at $2.00 would you give $3.00 per mile back? A freight broker only makes what the market will allow. Freight Brokers don't control the market, trucks do. Again, if the rate isn't enough don't load it. A broker can not force you to take a load.

All of our clients hear me say the same thing, a freight broker is the most miss-used service in the trucking industry. A broker used correctly, should only be for backhauls. That is a load that returns your equipment to an area where you have an account in order to service your customer and allow you to obtain a higher rate. If you're using a broker for all of your loads then it's not the broker it's you! Why do you not have your own accounts?

Over the last several years we have had more owner/operators contract our services in order to learn how to find their own accounts. Each and every one of them were using a broker for more than 70% of their loads. Our brokerage has shown an unimaginable rise in companies seeking a load out of their home base area. This can only mean that they don't have or don't have enough outbound accounts. The one common denominator is that they are all smaller companies (1-5 trucks).

This past Christmas I warned our brokerage as well as our brokerage consulting clients that December 26 - January 3 would be slow. The reason for this warning is that Christmas is the holiday that finds the majority of the trucks home. Once they begin moving on the 26th it takes 5-7 days to have them scattered enough across the country in order to start re-loading them. This past after Christmas week, the week I warned would be slow, was the busiest week of the year for several of our offices. When reviewing the reports it showed that the majority of the loads were being picked up by local carriers as a head haul.

I understand that from time to time things happen. When things happen it should be the exception, not the rule. I am fully aware of the frustrations being felt in the industry and I fully believe that $4.00+ per gallon fuel is a sin. My opinion is that the rate per mile for a truck should be near or equal to a gallon of fuel. It used to be, a lot of things used to be. A strike is not the answer because they just won't work. How many have since deregulation?

Reality is this, the industry is going through a correction phase right now. The strong will survive others unfortunately won't. But for everyone to have a chance we have to accept responsibility for our own instead of blaming everyone else. For those that are and even those that are enabling others with the pointing of the blame finger, you should stop. Correction begins at home.

Yes. I'll be the first one in line to say that bad brokers and even bad broker organizations exist, my answer is to not use them. The bad ones normally disappear in the course of time. Find a broker you can work with and cultivate the relationship. You shouldn't have 10 filing cabinets full of broker packages.

I truly hope that the next time a driver is in front of a camera, writes an article or letter to be published in a newspaper or magazine that he or she remembers that shippers are hearing and reading your words. The same shippers that will or won't pay more to ship their freight. They are a business just as we are. If they sense that our industry is in such disarray that they don't have to raise the rates, they won't. Why should they? They're in business to make money just as we are. They just do it different.

The Recipe For A Backhaul

A few weeks ago I was at a rally in Northwest Arkansas, seated and enjoying the day and the time I was spending with my wife. Seating was limited and a couple asked to share our table, which was no problem at all. As the conversation ensued, naturally the standard questions of where's home? What do you do?...All came up.

The gentleman that joined us with his wife was a truck driver that had some time off. Naturally when he learned that I worked for TALTOA, the conversation immediately went to the trucking industry. He had specific views on several subjects concerning the transportation industry but the one that amazed me was his thoughts on backhauls. His view, “there is no such thing!”

That amazed me. How could this seemingly intelligent man make such an absurd statement? He really believed that all loads were headhauls. Thus I felt a need to share with you The Recipe For A Backhaul.

When a person that owns a truck or trucks decides that it's time for them to become a trucking company, they do so generally with an account or two already set-up. In other words they have one or two customers that they know they can haul for when they start their business. These first shippers, customers, accounts (whichever you prefer to call them) are normally located in a close proximity to their (the trucking company's) base of operations. Before you send letters, I said first accounts and normally.

The shipments acquired from these accounts, the ones that the trucking company can call customers, are generally known as headhauls. The reason for this is that these are the trucking companies own customers with freight headed out or away from their customers location. Thus headhaul, freight hauled by the trucking company headed away from their own customer.

As a rule and depending on the location of the load, the rates paid by the trucking companies own customer to the trucking company is in the neighborhood of 10 -15% more than what they can get from a freight broker for a backhaul. The reason the rates are lower from a broker than from an actual customer is because the 10 - 15% is the fee the broker charges to provide the trucking company the load.

A backhaul should be a load moved by a truck that returns the truck to the general location of where the truck has accounts and can get the higher rate. There is a difference! A trucking company should have a plan. They should not get their own authority with the idea that they can use brokers until they can find their own accounts. If you have no accounts, don't start a trucking company.

Every day we have trucking companies register to send their people to a FBT Workshop. The reasons are twofold, 1) it serves their best interest to have their people know how to find and set-up customers for headhauls 2) with the accounts they’ll be adding they can obtain their broker authority in order to broker their excess freight to other trucking companies as backhauls generating a new form of revenue.

To learn more about the Freight Broker Training Workshop click the links found on the right.

How Can I Make Money...

Not a week goes by that we don't receive a phone call, email, even an occasional fax from someone wishing to know how they can make money as a transporter when the fuel prices are so high, when there are no re-loads, when I live 800 miles from the nearest terminal...

You get the idea.

There are thousands of transporters rolling up and down the road that are doing great and making a good living, then there are those that are barely making it or failing and can't wait to tell everyone of their impending doom. What makes one transporter successful and another a failure? The answer to that question is somewhat elusive, to a point.

Much of the problem for the transporter that is failing is poor planning from the start, for example:

1) Did they do the needed research before entering the industry or did they just decide to give it a shot and buy a truck?

2) Did they enter the industry for the long term or just to make a quick buck?

3) Did they have prior transportation experience or did they just figure that since they have towed a trailer before that their couldn't be much to it?

4) Any previous business experience?

5) Any previous sales experience?

Just from this short list it's obvious that succeeding as a transporter starts long before one hauls their first trailer. One of the first things we tell those wanting to attend a RV Transport Workshop is not to buy anything (especially a truck) before attending. This is to make sure that they have needed information for buying before spending. If one doesn’t know what one need's or what one is looking for, one will spend too much!

To answer one specific question from the hundreds of "how can I make money when..." is nearly impossible because to answer one question would require other questions to be answered first. This is the sole reason for the existence of the RV Transport Workshop. As transporters ourselves, we've watched hundreds of transporters go belly up because of lack of information/training.

You, as a transporter, are an independent contractor. The company will contract you and show you the way they want things done. This isn't training it's an orientation. Huge difference. Hence the conception of the RV Transport Training Workshop. To learn more click the RV Transport link on the right.