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As some of you know I operate a small refrigerated freight carrier company. We have 6 over the road trucks and refer trailers. I just got a call from my dispatcher panicked... within 48 hours the rates have ABSOLUTELY tanked, so much so that we are electing to sit in Salt Lake City and Denver. We have been getting between $3.00 - $3.30 per mile, rates are now $2.00 per mile and lower. We simply can not make a profit at this number, we are literally losing money with every additional mile. The funny thing is this is across the board, the spot market is very quick to react to market conditions and there is very little fat. What this tells me is there is NO freight to move ( we move food) and there is a serious excess capacity with trucks. Between fuel cost, increased and unwarranted insurance increases they are KILLING small carriers such as myself. I also heard that Walmart and swift are cutting a huge % of their company drivers and back filling with owner operators. My gut is the insurance and maintenance costs coupled with downed trucks because of the lack of parts makes it hard to make a profit.

I hired back a driver that went to a company that had 46 truck fleet and 18 of the trucks were down waiting for parts (3-6 weeks for some longer for others)

As some of you know I operate a small refrigerated freight carrier company. We have 6 over the road trucks and refer trailers. I just got a call from my dispatcher panicked... within 48 hours the rates have ABSOLUTELY tanked, so much so that we are electing to sit in Salt Lake City and Denver. We have been getting between $3.00 - $3.30 per mile, rates are now $2.00 per mile and lower. We simply can not make a profit at this number, we are literally losing money with every additional mile. The funny thing is this is across the board, the spot market is very quick to react to market conditions and there is very little fat. What this tells me is there is NO freight to move ( we move food) and there is a serious excess capacity with trucks. Between fuel cost, increased and unwarranted insurance increases they are KILLING small carriers such as myself. I also heard that Walmart and swift are cutting a huge % of their company drivers and back filling with owner operators. My gut is the insurance and maintenance costs coupled with downed trucks because of the lack of parts makes it hard to make a profit. I hired back a driver that went to a company that had 46 truck fleet and 18 of the trucks were down waiting for parts (3-6 weeks for some longer for others)

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[–] • 0 pt

I thought we didn't have enough trucks to move everything.

We didn't, but it wasn't so bad to the point where everything collapsed like most imagine it would. It manifested in much more subtle ways, mostly a lot of really overworked truckers picking up extra shifts (not joking).

Are people not buying stuff?

Companies aren't willing to pay reasonable prices to have stuff that they bought/made moved. OP talks about getting about $3/mile with his refrigerated transportation normally, but the customers are not willing to pay more than $2/mile very suddenly, just earlier today. Could mean the companies are hurting in the wallet, looking to cut costs everywhere they can- freight is one of the first places to look in a lot of cases.

[–] • 1 pt

I wouldn't say that is how the supply chain works for perishable goods. It isn't like they are going warehouse food that will expire.

[–] • 2 pts

Most of the refrigerated warehouses we ship to are at max capacity and woefully under staffed. We are often made to sit days on end because they are ao backed up, essentially using my trailer as a next to free mobile atorage.

[–] • 1 pt

Could mean the companies are hurting in the wallet,

I don't think this is how any of it works.

When I want to ship something I compare prices between shippers and go with the lowest cost option, regardless of what the price is. Shippers compete for my buisness by lowering prices. As the lowest priced options get booked the higher priced ones are what I have to use. The less remaining capacity there is the higher prices go. And the longer it continues even the lowest priced carriers adjust thier prices up.

Similarly when shipping freight I set a low price, based on what current shipping prices are, and adjust up if no one is willing to take it at that price.

This is what dictates rates and not the .001% of freight that doesn't ship because the shipper can't afford it.

[–] • 1 pt

I'm telling you how it works. I am very close to someone in the industry. I'm speculating about possible reasons for OP's observations.

[–] • 0 pt

Correct, this has way more to dow with not enough freight leading to extreme excess capacity. Larger carriers can run a no or even negative margins just to keep the trucks moving. I cannot not!