5 ms·

> Trucking is badly broken, especially in the US. why do you say that?

mv4 9y ago
According to friends in the business: - hard to make money - people work too much and sleep too little - various abuse by trucking companies For a more methodical analysis - USA Today did a piece a month ago: https://www.usatoday.com/pages/interactives/news/rigged-forced-into-debt-worked-past-exhaustion-left-with-nothing/ https://www.usatoday.com/pages/interactives/news/rigged-forc...
- adventured 9y ago
  > hard to make money That's not a supporting premise for something being badly broken. Amazon has found it hard to make money in retail, as have Walmart and Costco (2% to 3% razon-thin net income margins). Most retailers find it extremely difficult to make money. That's not necessarily because the business is badly broken. It means the margins are being competed away, which is tremendous for other parties (consumers for one). Lots of industries / segments have the same problem and always will.
  - simonh 9y ago
    In the case of Amazon those thin margins are mainly due to massive re-investment expenses to grow capacity, not competition. The question is if or when they might be able to reign back the investment without risking losing competitiveness with rivals.
relaunched 9y ago
I owned a trucking company and my family owned a freight brokerage business. Trucking is a hard lifestyle, especially over the road. The job is physically demanding and there are a lot of ways to do it wrong. Owner / operators and small trucking companies are, in some cases, like sharecropping. You don't make premium money, that's taken off the top through a series of intermediaries / brokers. You have to buy sub par equipment, because it's cheaper. You can't pay your drivers as well and often times, you do so in cash, which eventually bites you. And to boot, the business is very capital intensive. If your customer pays you in 30 days, and you run coast to coast, it could costs you 1100 gallons a week (3000 per week) and you don't get paid for 5 weeks (15000). Add to that cost of maintenance, insurance (650-800 per month - physical damage, liability and cargo), truck and trailer payment ($2000 per month for something newer, but not new, that you wouldn't mind living in or), you have to eat, your cell phone, oil changes ($150 per 15-25k miles) and the 1.25-1.35 per mile you earn, doesn't go all that far. But don't worry, if you need an advance on your shipments pay, for fuel, someone will give you up to 50-60% of your cash, maybe even a little more, for 1-2% or more of all the money you're due. And if you want to get paid faster than 30 days, you can get paid a day or 2 after you deliver and turn in the paperwork, for another 1-2% of the total amount you are due. One truck shops or small companies can't service the needs of most shippers, so shippers choose big trucking companies or 3pls to manage their transportation. By the time a little guy touches a Bill of Lading / rate confirmation, the shipment can be double or triple brokered, each hand passing paper taking 10% off the top. On top of that, there's huge theft. Gangs steal tires, cargo, trucks and drivers sometimes choose to transport drugs along with whatever you're asking them to haul...if you are in the business long enough, the stories are epic.
- pnathan 9y ago
  Thanks for the detailed answer. This seems super sketch. :-(

mv4 9y ago

According to friends in the business: - hard to make money - people work too much and sleep too little - various abuse by trucking companies For a more methodical analysis - USA Today did a piece a month ago: https://www.usatoday.com/pages/interactives/news/rigged-forced-into-debt-worked-past-exhaustion-left-with-nothing/ https://www.usatoday.com/pages/interactives/news/rigged-forc...

adventured 9y ago
> hard to make money That's not a supporting premise for something being badly broken. Amazon has found it hard to make money in retail, as have Walmart and Costco (2% to 3% razon-thin net income margins). Most retailers find it extremely difficult to make money. That's not necessarily because the business is badly broken. It means the margins are being competed away, which is tremendous for other parties (consumers for one). Lots of industries / segments have the same problem and always will.
- simonh 9y ago
  In the case of Amazon those thin margins are mainly due to massive re-investment expenses to grow capacity, not competition. The question is if or when they might be able to reign back the investment without risking losing competitiveness with rivals.

relaunched 9y ago

I owned a trucking company and my family owned a freight brokerage business. Trucking is a hard lifestyle, especially over the road. The job is physically demanding and there are a lot of ways to do it wrong. Owner / operators and small trucking companies are, in some cases, like sharecropping. You don't make premium money, that's taken off the top through a series of intermediaries / brokers. You have to buy sub par equipment, because it's cheaper. You can't pay your drivers as well and often times, you do so in cash, which eventually bites you. And to boot, the business is very capital intensive. If your customer pays you in 30 days, and you run coast to coast, it could costs you 1100 gallons a week (3000 per week) and you don't get paid for 5 weeks (15000). Add to that cost of maintenance, insurance (650-800 per month - physical damage, liability and cargo), truck and trailer payment ($2000 per month for something newer, but not new, that you wouldn't mind living in or), you have to eat, your cell phone, oil changes ($150 per 15-25k miles) and the 1.25-1.35 per mile you earn, doesn't go all that far. But don't worry, if you need an advance on your shipments pay, for fuel, someone will give you up to 50-60% of your cash, maybe even a little more, for 1-2% or more of all the money you're due. And if you want to get paid faster than 30 days, you can get paid a day or 2 after you deliver and turn in the paperwork, for another 1-2% of the total amount you are due. One truck shops or small companies can't service the needs of most shippers, so shippers choose big trucking companies or 3pls to manage their transportation. By the time a little guy touches a Bill of Lading / rate confirmation, the shipment can be double or triple brokered, each hand passing paper taking 10% off the top. On top of that, there's huge theft. Gangs steal tires, cargo, trucks and drivers sometimes choose to transport drugs along with whatever you're asking them to haul...if you are in the business long enough, the stories are epic.

pnathan 9y ago
Thanks for the detailed answer. This seems super sketch. :-(