Trucking companies failing at nearly triple the rate of 2018

[Nature Boy 2.0 8,378]

Interesting.  I remember when I was an ops manager. My predecessor was paying way to much for freight. I bid all my lanes with brokers and back haulers and saved the company big money vs what they were paying a local company. The sales guy way crying that it was unfair but I explained he was welcome to bid on the lanes. They weer also paying the standard discount on LTL which is what a private citizen would pay for a single pallet.  I was moving sometimes 300+ skids a day of LTL

 

This has nothing to do with the economy really. 

 

 

 

https://www.foxbusiness.com/markets/trucking-companies-failing-at-nearly-triple-the-rate-of-2018

[Nature Boy 2.0 8,378]

12 minutes ago, Nature Boy 2.0 said:

Interesting.  I remember when I was an ops manager. My predecessor was paying way to much for freight. I bid all my lanes with brokers and back haulers and saved the company big money vs what they were paying a local company. The sales guy way crying that it was unfair but I explained he was welcome to bid on the lanes. They weer also paying the standard discount on LTL which is what a private citizen would pay for a single pallet.  I was moving sometimes 300+ skids a day of LTL

 

This has nothing to do with the economy really. 

 

 

 

https://www.foxbusiness.com/markets/trucking-companies-failing-at-nearly-triple-the-rate-of-2018

Interesting part. I fully back this. Some  companies now get around labor laws by classifying employees as contractors. Fedex ground and home do this. They dont own any of the trucks. They have people that own routes. They are all contractors and they hire drives and classify them as sub contractors. No insurance, brutal hours and very weak pay. Many delivery companies that run routes (bread companies for example) are doing this.

 

UPS however pays their drivers very well. 100K + for drivers that have a few years in. Great insurance and remain competitive with their rates and service.

 

But added pain for the industry could be coming next year in the form of labor laws designed to protect contracted workers from being misclassified. In California, for example, a law will go into effect in January that will make it harder for companies to classify workers as contractors, which the California Trucking Association has said could put 70,000 owner-operators in the state out of work. The group has sued to prevent the law from taking effect

[Boiler 45,979]

I know Amazon does this and I think UPS must just going on advert I saw that suggests they are looking pay people by the mile, 58c was the number I saw which would just pay possibly for the vehicle never mind your time.

[Nature Boy 2.0 8,378]

Just now, Boiler said:

I know Amazon does this and I think UPS must just going on advert I saw that suggests they are looking pay people by the mile, 58c was the number I saw which would just pay possibly for the vehicle never mind your time.

UPS normally hires helpers for the trucks during Christmas. This year in addition they hired people for the season to drive their POV.  FEDEX hires temps and puts them in ryder trucks

[luckytxn 2,265]

4 hours ago, Nature Boy 2.0 said:

Interesting part. I fully back this. Some  companies now get around labor laws by classifying employees as contractors. Fedex ground and home do this. They dont own any of the trucks. They have people that own routes. They are all contractors and they hire drives and classify them as sub contractors. No insurance, brutal hours and very weak pay. Many delivery companies that run routes (bread companies for example) are doing this.

 

UPS however pays their drivers very well. 100K + for drivers that have a few years in. Great insurance and remain competitive with their rates and service.

 

But added pain for the industry could be coming next year in the form of labor laws designed to protect contracted workers from being misclassified. In California, for example, a law will go into effect in January that will make it harder for companies to classify workers as contractors, which the California Trucking Association has said could put 70,000 owner-operators in the state out of work. The group has sued to prevent the law from taking effect

About 15 years ago the IRS had said that it was illegal to pay drivers as subs unless they were owner operators and had contracts. The past few years I have noticed many employers offering to hire subs and pay 1099's and not sure how they are getting away with it as they can't legally work and get 1099's. I been offered several times in the past few months to work as a driver and get 1099's and I tell them to go away.

4 hours ago, Boiler said:

I know Amazon does this and I think UPS must just going on advert I saw that suggests they are looking pay people by the mile, 58c was the number I saw which would just pay possibly for the vehicle never mind your time.

I was making 60c a mile a few years ago but as a company driver. If someone owns the vehicle and is an owner operator they will make a lot more than 58c a mile as they would be working at a loss before they even grabbed the load.

 

 

Celadon I had worked for about 15-18 years a go and stayed with them for about 6 months before I quit them and went to work somewhere else. They were a horrid company and also what is a niche carrier and hauled mostly auto parts for the big auto makers. When the auto companies had a downturn Celadon had an even bigger downturn. They also had been caught falsifying their finances to stave off bankruptcy for years and am surprised they even lasted this long. After I left them they tried to get work visas for Mexican drivers and then pay them a third of the going rate that usual drivers got. I knew one of the drivers they brought in and he said that the pay was a killer but that the company would even not get them that many miles. The company got sued and lost a huge court case over that and almost went under back then. They were a crappy company. The other companies they mentioned in the article were also niche carriers and one of them I know were  mostly hauling pipe for the oil fields and another sands and water for the fields too. Niche carriers rarely last long  and start only to fill a need that came along. Also that need usually quickly gets filled with many newbs and fast gets overfilled. The few niche companies that make it are the ones that quickly adapt to other markets.

 

Now as for using brokers they are a middleman and takes a huge cut of the pie and many times they are more expensive unless they also find the backhauls in order to get the truck back to where they came from and pay for their fuel and a small stipend for their trouble. The best bet is to get an established carrier and use a contract to run regular loads but if they can't then one has to use LTL (Less Than Truckloads) or the spot market.

 

The industry has always had its ups and downs and will continue to do so. One third of all the loads on the roads at any given time are paper or paper products and then a third to nearly half is foods and food products. Those are the staples the country has to have in order to just live as we all have to eat and then wipe our behinds. Yes there is always news about the trucker shortage but that is mostly due to a huge driver turnover in the industry. Celadon along with major carriers like Swift and JB Hunt have 200-300 percent turnover. Yes that is correct. Driving is a suckee job and companies may say they care about drivers but they barely tolerate their drivers. I would never recommend the career but have helped many get into the industry and mentor them if they insist on trying it. Very few make it past a year though.

[Voice of Reason 10,298]

51 minutes ago, luckytxn said:

The past few years I have noticed many employers offering to hire subs and pay 1099's and not sure how they are getting away with it as they can't legally work and get 1099's. 

Why can't they get paid via a 1099?

[luckytxn 2,265]

1. What Is the Level of Instruction?
2. Is There Skills Training Involved?
3. What Is the Worker’s Level of Business Integration?
4. Is the Worker Expected to Personally Accomplish Tasks on Behalf of a Business?
5. Is the Business in Control of a Worker’s Assistant/s?
6. Is There a Continuous Professional Relationship?
7. Are Working Hours Specified by the Employer?
8. Is the Worker Expected to Render a Full Day of Work?
9. Are Services Rendered Within Company Premises?
10. Does the Employer Demand Order by Which a Task Must Be Accomplished?
11. Is the Worker Expected to Write Work-Related Reports?
12. What Is the Payment Method Used?
13. Are Paid-for Business Travels Included in the Contract?
14. Are There Materials and Tools Provided?
15. Are There Work Facilities Provided?
16. Does the Worker Earn a Preset Amount?
17. Does the Worker Render Services to Multiple Bosses?
18. Are the Worker’s Services Available to the General Public?
19. Is Abrupt Worker Discharge a Possibility?
20. Does the Worker Possess Right of Termination?

These 20 questions explain how the IRS determines an employee or contractor. A driver was determined by the multitude of positive answers that led them to determine that drivers were employees. This was like I said many years ago and many companies were forced to treat drivers as employees instead of contractors that many companies started offering lease purchases of trucks and thus making them owner operators and then they can be treated as contractors. California and other states and I read the IRS was looking to change this and make the owner operators listed as employees again as the answer the the questions still showed them as an employee.

[Nature Boy 2.0 8,378]

1 hour ago, luckytxn said:

About 15 years ago the IRS had said that it was illegal to pay drivers as subs unless they were owner operators and had contracts. The past few years I have noticed many employers offering to hire subs and pay 1099's and not sure how they are getting away with it as they can't legally work and get 1099's. I been offered several times in the past few months to work as a driver and get 1099's and I tell them to go away.

I was making 60c a mile a few years ago but as a company driver. If someone owns the vehicle and is an owner operator they will make a lot more than 58c a mile as they would be working at a loss before they even grabbed the load.

 

 

Celadon I had worked for about 15-18 years a go and stayed with them for about 6 months before I quit them and went to work somewhere else. They were a horrid company and also what is a niche carrier and hauled mostly auto parts for the big auto makers. When the auto companies had a downturn Celadon had an even bigger downturn. They also had been caught falsifying their finances to stave off bankruptcy for years and am surprised they even lasted this long. After I left them they tried to get work visas for Mexican drivers and then pay them a third of the going rate that usual drivers got. I knew one of the drivers they brought in and he said that the pay was a killer but that the company would even not get them that many miles. The company got sued and lost a huge court case over that and almost went under back then. They were a crappy company. The other companies they mentioned in the article were also niche carriers and one of them I know were  mostly hauling pipe for the oil fields and another sands and water for the fields too. Niche carriers rarely last long  and start only to fill a need that came along. Also that need usually quickly gets filled with many newbs and fast gets overfilled. The few niche companies that make it are the ones that quickly adapt to other markets.

 

Now as for using brokers they are a middleman and takes a huge cut of the pie and many times they are more expensive unless they also find the backhauls in order to get the truck back to where they came from and pay for their fuel and a small stipend for their trouble. The best bet is to get an established carrier and use a contract to run regular loads but if they can't then one has to use LTL (Less Than Truckloads) or the spot market.

 

The industry has always had its ups and downs and will continue to do so. One third of all the loads on the roads at any given time are paper or paper products and then a third to nearly half is foods and food products. Those are the staples the country has to have in order to just live as we all have to eat and then wipe our behinds. Yes there is always news about the trucker shortage but that is mostly due to a huge driver turnover in the industry. Celadon along with major carriers like Swift and JB Hunt have 200-300 percent turnover. Yes that is correct. Driving is a suckee job and companies may say they care about drivers but they barely tolerate their drivers. I would never recommend the career but have helped many get into the industry and mentor them if they insist on trying it. Very few make it past a year though.

Thanks was hoping you would weigh in 

[luckytxn 2,265]

2 minutes ago, Nature Boy 2.0 said:

Thanks was hoping you would weigh in 

Anytime. I know that industry well. I am seeing the self driving trucks lately making big inroads fast and looking like the driver shortage will be a thing of the past.

[TBoneTX 45,981]

6 hours ago, Nature Boy 2.0 said:

Thanks was hoping you would weigh in 

Was also intensely looking to hear from Bro C.

8 hours ago, luckytxn said:

One third of all the loads on the roads at any given time are paper or paper products

Would never have guessed this.

8 hours ago, luckytxn said:

companies may say they care about drivers but they barely tolerate their drivers.

Some years ago (~10?), when I presume that there was a driver shortage or a competition to hire them, I saw trucks with "Our best asset sits 64.5 feet ahead" (and similar; distance might've been 61.5 feet).  The company was Crete Carrier.  The comment clearly referred to their drivers.  Whether true or not, I thought that it was cool.

[Nature Boy 2.0 8,378]

6 hours ago, TBoneTX said:

Was also intensely looking to hear from Bro C.

Would never have guessed this.

Some years ago (~10?), when I presume that there was a driver shortage or a competition to hire them, I saw trucks with "Our best asset sits 64.5 feet ahead" (and similar; distance might've been 61.5 feet).  The company was Crete Carrier.  The comment clearly referred to their drivers.  Whether true or not, I thought that it was cool.

I saw that sign yesterday. I forget the company

[luckytxn 2,265]

7 hours ago, TBoneTX said:

Was also intensely looking to hear from Bro C.

Would never have guessed this.

Some years ago (~10?), when I presume that there was a driver shortage or a competition to hire them, I saw trucks with "Our best asset sits 64.5 feet ahead" (and similar; distance might've been 61.5 feet).  The company was Crete Carrier.  The comment clearly referred to their drivers.  Whether true or not, I thought that it was cool.

Thanks for thinking of me brother TBone.

 

Yeah foods or food products are a huge part of our economy and it is estimated that in less than a week that the store shelves would bee emptied if trucks stopped delivering. People have to eat no matter what and when I said that paper products are a third of all loads on the road at any given time it is that most of the paper products are used for cardboard or other packaging for the food products or just general products. Next time go into a WalMart or other general store try and notice how much paper products there are. 

 

I actually drove for Crete Carrier for about 8 years and left them about 11 years ago when I got married. Celadon the company that just went bankrupt and I had worked for 6 months and then I went to work for Crete Carrier. Crete was and I believe still is among the lowest truck driver turnover firms out there and it was around 70-75 % yearly turnover which may sound like a lot but is considered outstanding for any decent sized trucking company. And yes to us employees it was still a joke about the trailers that had what you said about the most valuable asset of the company was the drivers as they still treated drivers like we were non human and just a tolerated employee. They gave me great miles and if someone lived in a truck pretty like I did way back then they were a good company but they would do everything possible to not get drivers home for their days off and it was a battle and struggle to get home. The reason I left them was I was getting married and needed to be home more so I left and went to Knight Transportation who had good a good reputation on getting drivers hometime. Crete has always been a solid company and is well run and so is solid unlike Celadon and 0ther niche companies.

 

Knight the company I went to work for after Crete is also a solid company and well run but their turnover is about 100% and that is still considered decent for that industry. I worked out of the Katy Texas terminal and planned on working for them till I retire but left them last year.  You may remember a few years ago a trucking company in Katy had the work place shooting by a driver that had been fired and the terminal manager had been killed and a few others wounded. Well that manager was a good friend of mine besides me boss and it hurt badly what happened. He is s huge reason I was able to convert to Catholicism as he gave me local work and scheduled me so I can attend the required masses and Monday night meetings. I had just come in  to thank him about all he had done for me and give him a gift that morning and that afternoon the incident happened. I also knew the driver that did the shooting and he had killed himself after when the police arrived to stop him. I had an incident with him and had warned my boss/friend about him a few months a few months before that about him. It is a hard industry to be part of. That company keeps calling me to work for them again but it is hard to do so.

 

The 1st company I worked for about the mid to late 1990's was one called Burlington motor carriers and they were among the largest trucking companies around went bankrupt and failed so I went to Celadon and gave them a shot. This industry is a hit or miss industry and are cyclical so this news about companies going under is an old one and will be a future thing also. I know several companies big and small that are on the edge of failing and it is not due to Trump or tariffs or even Obama before him or the governments fault but the industry and also the people running them faults. 

Edited December 15, 2019 by luckytxn
suckee posting

[Nature Boy 2.0 8,378]

2 hours ago, luckytxn said:

Thanks for thinking of me brother TBone.

 

Yeah foods or food products are a huge part of our economy and it is estimated that in less than a week that the store shelves would bee emptied if trucks stopped delivering. People have to eat no matter what and when I said that paper products are a third of all loads on the road at any given time it is that most of the paper products are used for cardboard or other packaging for the food products or just general products. Next time go into a WalMart or other general store try and notice how much paper products there are. 

 

I actually drove for Crete Carrier for about 8 years and left them about 11 years ago when I got married. Celadon the company that just went bankrupt and I had worked for 6 months and then I went to work for Crete Carrier. Crete was and I believe still is among the lowest truck driver turnover firms out there and it was around 70-75 % yearly turnover which may sound like a lot but is considered outstanding for any decent sized trucking company. And yes to us employees it was still a joke about the trailers that had what you said about the most valuable asset of the company was the drivers as they still treated drivers like we were non human and just a tolerated employee. They gave me great miles and if someone lived in a truck pretty like I did way back then they were a good company but they would do everything possible to not get drivers home for their days off and it was a battle and struggle to get home. The reason I left them was I was getting married and needed to be home more so I left and went to Knight Transportation who had good a good reputation on getting drivers hometime. Crete has always been a solid company and is well run and so is solid unlike Celadon and 0ther niche companies.

 

Knight the company I went to work for after Crete is also a solid company and well run but their turnover is about 100% and that is still considered decent for that industry. I worked out of the Katy Texas terminal and planned on working for them till I retire but left them last year.  You may remember a few years ago a trucking company in Katy had the work place shooting by a driver that had been fired and the terminal manager had been killed and a few others wounded. Well that manager was a good friend of mine besides me boss and it hurt badly what happened. He is s huge reason I was able to convert to Catholicism as he gave me local work and scheduled me so I can attend the required masses and Monday night meetings. I had just come in  to thank him about all he had done for me and give him a gift that morning and that afternoon the incident happened. I also knew the driver that did the shooting and he had killed himself after when the police arrived to stop him. I had an incident with him and had warned my boss/friend about him a few months a few months before that about him. It is a hard industry to be part of. That company keeps calling me to work for them again but it is hard to do so.

 

The 1st company I worked for about the mid to late 1990's was one called Burlington motor carriers and they were among the largest trucking companies around went bankrupt and failed so I went to Celadon and gave them a shot. This industry is a hit or miss industry and are cyclical so this news about companies going under is an old one and will be a future thing also. I know several companies big and small that are on the edge of failing and it is not due to Trump or tariffs or even Obama before him or the governments fault but the industry and also the people running them faults. 

Knight does our Toyota parts if not mistaken 

[TBoneTX 45,981]

13 hours ago, luckytxn said:

most of the paper products are used for cardboard or other packaging for the food products or just general products.

(Duh, T-B.).   

13 hours ago, luckytxn said:

work place shooting by a driver that had been fired and the terminal manager had been killed and a few others wounded. Well that manager was a good friend of mine [...] and it hurt badly what happened.

How awful.  Painful, indeed.

11 hours ago, Nature Boy 2.0 said:

their turnover is about 100% and that is still considered decent for that industry.

How could it be worse than 100% -- new hires don't last a full year?

How the dickens do the companies survive, let alone recruit drivers?

[luckytxn 2,265]

20 minutes ago, TBoneTX said:

(Duh, T-B.).   

How awful.  Painful, indeed.

How could it be worse than 100% -- new hires don't last a full year?

How the dickens do the companies survive, let alone recruit drivers?

A saying in the industry is that the country runs on paper and this is the reason why. It surprised me when I entered the industry how much paper or paper products is used.

 

Yeah it was an eye opener how fast things can change in life.

 

You are correct the reason being is that driver come and go in days and weeks and months. It is rare for any driver to stay around long at one company. As I also said that some companies have 200-300% turnover. (Swift, JB Hunt, etc) It is really hard for companies to survive or even to know from one year to the next what personnel they have to chase after contracts. A company with under 100% turnover is rare and considered very good and I worked at 2 of them and stayed at one for about 8 years and the other for about 10 years.  I also worked at 2 companies with huge turnover. One is Celadon and the other was JB Hunt. One I stayed for 6 months and the other for 7 months. There is a reason they have such high turnover. The recruiting industry is a huge industry in itself. They have trade magazines and have their own trade shows and everything imaginable. You would be shocked probably by how many calls emails and what not in offering me great opportunities to come work or change companies. I get offered big bonuses and all also. I just laugh at them as I know which companies are for me to look at on how I prefer to drive as I am an old hand at this. Like I also said before that most people that come into the industry rarely last even a year. It is a crappy existence but one I excelled at and had no family or anything to pull me toward them so I was free to do whatever. I was also ex military and after the military I was  working for a company that did contract for military and then a Petroleum Chemist that traveled extensively worldwide constantly. I was used to not having any place to stay but did own land as I have always invested in acreage somewhere. After I maxed out my 401K's I would save in account until I would have 10,000 bucks or more and to get it to work for me I would buy acreage or a house to rent out.

 

Anyway the industry is tough and hard so don't be surprised when many of the companies fail. Also when you read or hear about the trucker shortage you now know why.