AHHH!!! Good Monday everybody! Another fine week begins and what do I get to read first with my morning coffee? Another job advertisement promising untold wealth to young and inexperienced drivers. This time it’s Landstar System that suffers my wrath, promising $400,000 a year. Hmm, didn’t I just retire from there after 3 years? I don’t recall making that much.
Time for a reality to kick in
Four hundred thousand dollars?!? Hehehe, not in this market. (Disclaimer: back during the top of the cycle, the most I grossed was $235,000. I didn’t go full tilt, I didn’t want nor need too.) Now back when fuel was $2 per gallon and rates were $5 per mile, yeah, I could see that if you were “nose to the grindstone.” OH NO, not now. You have this little thing called “cost of operation” to take out of that big pile of money. Fuel, permits, insurance (all $2 million worth), a maintenance fund for when YOU WILL break down. And that’s just the basics – add your personal spending. Food, bills, the kids, THE WIFE/HUSBAND (man cave needs a bigger TV). Remember, money is more digital than ever, and it can get deleted faster than it can be added back.
Since spot rates have bottomed out, and contract rates are rising, we’re about to reach a very bad situation. Think of it as an intersection and both trucks aren’t stopping anytime soon. When the contract rate goes over the spot market rate, don’t think for a second the shippers will honor the higher price, if they can avoid it. The fuel surcharge is biting them in the wallet too. That, they cannot control. It is calculated from the DOE fuel price report. But the price they pay to you, that’s what they can mess with. And as the protest over the weekend showed, it’s only going to get worse before it gets better.