“11 cents a mile you see on there [for some loads.] I can’t drive my Chevy Malibu for 11 cents a mile!“
As of the last week of April, the largest car hauling load board Central Dispatch, surpassed 54,000 load offers. Spring is usually a busy time for trucking, especially car hauling, but 54,000 is quite a bit higher than the average. In years past, Central Dispatch can range in load offers from 25,000 to 40,000 that sits on Central at any given time. So what gives? Why now?
Super Dispatch spoke with broker and owner of Easy Car Shipping David Mistzi as well as transporter and Owner Operator Ziggy Keller on their personal theories. David has been a broker for 14 years and Ziggy is an equally experienced transporter, as well as founder of the Independent Auto Transporter Alliance and the famous Facebook group Auto Transport Everything. Their views differ at times, but both agree that the cost of transporting cars in America has started to outweigh the load offer prices. Ziggy thinks that newcomers are being educated on the costs of being a transporter in recent years, and that is why low rates are staying on the boards longer. Here are some of the their theories:
“With the Elogs coming on, people believe they are responsible for 20% less capacity for those entering into the Elog market that weren’t previously in it”
Electronic Logging Devices
The letters on everyone’s lips are E. L. D. The ELD has slowed carriers down a lot, which leaves many loads left unclaimed on Central Dispatch.
“With the Elogs coming on, people believe they are responsible for 20% less capacity for those [truckers] that are entering into the Elog market that weren’t previously in it,” Ziggy said to Super Dispatch in an interview last Friday.
“The typical order has taken an extra 2-4 days to dispatch,” David said of his own brokerage business in California. With the new backlog on Central, David has started to warn customers shipping personal vehicles of the extra wait time. To solve his stagnant load offers, his brokerage has become more creative, even calling some carriers directly with offers.
We have many car haulers testing our ELD solution on their mobile devices and if you wish to get your hands on it, please sign up HERE. We are asking for team-driver testers at the moment.
“Operating as a carrier has gone up considerably in the last few years, [more so] than the compensation.”
The Rising Costs of Being a Transporter
Truckers hauling vehicles one-by-one on Central Dispatch isn’t as profitable as it might have been a few years ago. Overall, the cost of operating a transporting business has gone up; gas is more expensive, insurance premiums are rising and the price of buying a trailer continues to rise, while wages fall stagnant.
“Overall, compensation has only trickled up,” David said of the transportation rates. “Versus the actual costs of operating. Operating as a carrier has gone up considerably in the last few years, [more so] than the compensation.”
This means that one-off loads won’t be picked up quickly. The added logistics of patchworking 3-8 single cars onto a trailer is no longer worth the low pay.
The Economy is good
“There’s a lot more people willing to pay for the transport, versus driving from Point A to Point B,” David said, in a surprisingly positive spin. David theories that when the economy is in an upturn, more people are willing to pay for their cars to be hauled across the country.
In a similar vein, Ziggy attributes the competitive load prices that happen in Spring as one of the reasons he personally doesn’t look for loads on Central Dispatch. “Snowbirds” (customers who migrate south to a second home in the winter and then back again in the fall) are coming back north in the Spring and offering more competitive prices for car haulers than identical loads on Central Dispatch.
“If I have an opportunity to move a load from Florida to New York… and right now snowbirds are paying quite well, [brokers on] Central Dispatch still want to list [that type of load] at $300 a car…even at the height of the season when everyone is at capacity plus.” Ziggy said.
“I can’t drive my Chevy Malibu for 11 cents a mile! If you look on a mileage basis, what’s a car worth to move, if I drive my Chevy Malibu down to auction to rep my company, the IRS gives me a 53 cent per mile mileage deduction.”
The rates on Central Dispatch are too damn low!
In the end, both Ziggy and David think that the industry is not profitable enough for transporters to take the lowest rates on Central Dispatch. Besides the occasional one-off load, Central Dispatch is historically a place where newer owner operators find their first loads before establishing lasting and consistent business relationships with shippers or brokers. Inexperienced transporters and one-off load postings mean that the rates will naturally be lower than in other parts of the industry, but it seems that now the rates are too low for even beginner transporters.
“They are a load board, they aren’t the monitor, they’re just a place to list your cars. But until they weed out the abusive practices of some of the listers you know…” Ziggy said of Central Dispatch. “I mean 11 cents a mile you see on there [for some loads.] I can’t drive my Chevy Malibu for 11 cents a mile! If you look on a mileage basis, what’s a car worth to move, if I drive my Chevy Malibu down to auction to rep my company, the IRS gives me a 53 cent per mile mileage deduction. How can you possibly operate a 300,000 truck with freight at 11 cents a mile? You can’t.”
But why now?
The rates have been low for a while, but Ziggy thinks organizations like IATA and the Auto Haulers Association of America have been working on educating newer transporters on what it costs to operate, and that has changed how people interact with Central Dispatch and other load boards.
“When [transporters] can understand their cost per mile, then they can fairly market their own services. A lot of smaller companies don’t know what their cost per mile is, and until they know what that is, they won’t know how to price their own services,” Ziggy said.
At Ziggy’s suggestion, Super Dispatch took a look and compared the total available loads on Central Dispatch to the total available loads above .50 cents a mile. over 33,000 are above .50 cents a mile.
What do you think? Does this prove loads are paying better or worse? Do you think .50 a mile is sufficient? Let us know in the comments.