Manufacturers and retailers spend millions of dollars a year on freight transportation. Freight costs can represent between 1 to 10 percent of a company’s operating expenses. Many companies treat freight costs as a necessary evil. Once a year they engage in an annual ritual, the freight bid or RFP. The current carriers are squeezed in their pricing; sometimes new carriers are brought into the mix if some incumbents haven’t performed. Shippers walk away thinking they have done their jobs and optimized the value of their freight costs. They haven’t.... Read More

Under freight rate regulation the Interstate Commerce Commission (ICC) spent considerable time evaluating why transport carriers failed. While their primary purpose was to keep rates low, they also wanted to keep transport carriers in business allowing them to recover their full cost of transport to include a profit sufficient to yield a fair and reasonable return on invested capital. Cost information was readily available to the ICC by reviewing public financial statement data.... Read More

Previously I skimmed the surface of the stages of spot market load negotiation and today I’ll conclude with the remaining stages. But first, I promised to tell you what “FAT” is…

All Negotiations follow three basic phases. Yes, every single negotiation does, whether you’re negotiating for a car, a date, a wife or more importantly a truckload of freight, they will all include these three stages...

1. Pre-Negotiation, Framing and Setting the Stage.
2. Deadlock, Stalemate and Arrested Development
3. Acceptance and Settlement of Negotiation - a transaction is born!... Read More

Stiffel Nicolaus's latest report, "The Less-Than-Truckload (LTL) Industry 2Q12 Review/3Q12 Preview", estimates that year-over-year figures as of this September indicate that LTL has experienced growth. Some regions are experiencing tighter competion and soft volumes during August put pressure on spot pricing.... Read More

I've talked about this many times but can't seem to get any consensus other than the usual griping from the usual suspects. But I still haven't gotten a satisfactory answer to my question. The question is this and it's simple - why do carriers require small business owner operators to build up a hold back? After all, the small business owner operator has more capital tied up in the relationship with the carrier than the carrier. Shouldn't it be the other way around?... Read More

The Federal Motor Carrier Safety Administration appears to be getting serious about putting chronically noncompliant motor carriers out of business and closing the door on chameleon carriers upon first perusal of a new policy set to publish in the Federal Register on Aug. 2.... Read More