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By Mark Montague, DAT Solutions
A dilemma is a tough choice between two or more equally undesirable alternatives. For truckers, there's no greater example of a dilemma than deciding to accept a low rate or drive empty.
We asked that question in a quick poll on the Rate Per Mile Masters group for truckers on Facebook, and the vote was overwhelming: no way. Almost 400 respondents said they'd rather deadhead, compared to just 23 who would take the low rate. Fourteen said they might take less money if it worked with their schedule.
Shippers and brokers take note: that's more than nine out of 10 independent truckers who say they'd refuse to haul anything they consider to be "cheap freight."
This wasn't a scientific survey but it's still revealing. Many truckers would rather deadhead than waste time searching for a low-paying load.
Find the Balance
From a trucker's perspective, rates are often out of balance on a lane pair—the load in one direction pays a lot more than the return trip. The average for the roundtrip, however, makes taking the low-paying backhaul load worth it.
On some lane pairs, the higher-paying (head-haul) direction is almost always the same. Los Angeles to Phoenix pays more than Phoenix to L.A. Philadelphia to Boston pays better than Boston to Philly. Phoenix doesn't generate a lot of outbound freight compared to L.A., and Boston doesn't generate a lot of freight, period.
On a few lanes, the head-haul direction changes in peak seasons. For example, Miami to Atlanta often becomes a head-haul for reefer loads during a few glorious weeks in the spring. Truckers can monitor load-to-truck ratios in these markets to assess these seasonal shifts.
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Running on Empty
Rate Per Mile Masters founder Chad Boblett of Boblett Brothers in Lexington, Ky., makes every effort to "take the backhaul with me" when accepting a load into one of those quiet markets. Boblett explains that he needs to be paid enough on the head-haul to compensate for deadheading out.
Another Rate Per Mile Masters member agreed. "I will always make enough going into a dead zone to come out empty," he wrote. "I'd never take a cheap load."
Other carriers consider that a low-priced haul may sometimes be worthwhile. "Time equals money," said Sammy Lloyd of Lloyd Trucking in Chattanooga, Tenn. "Rolling at $1.50 per mile today is more profitable than $2.00 per mile tomorrow. With good planning during my week, I find that I can make room for an additional load by week's end."
If you're shipper or broker who posts truckload freight to the spot market, it pays to listen to what truckers want and to work with them to help them turn a profit instead of taking a loss or low rate. A financially healthy carrier is good for everyone.
Mark Montague is senior industry pricing analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. Mark is based in Portland, Ore.
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