The moving industry is getting ready to file rates with the SDDC for 2012. This just may be the industry's last chance to save itself - or more likely to seal it's fate. Like in every case, time will tell
Some things have sparked my interests recently and it has got me thinking - Firstly, let me repeat myself, again. Carriers: You must raise the rates SIGNIFICANTLY to save our industry!! Six or even ten percent just won't cut it. I hate to keep repeating myself but this is the number 1 problem facing us today. All the other rising costs we see everyday can and will be offset with rates that are profitable for everyone (including your drivers since you've forgotten we are part of your 'team'). Of course all the carriers will see this as impossible because the next guy will always do it for less. This needs to stop. It seems inconceivable to me that the van lines continue just to drop the rates when their industry is spiraling out of control! What has made me truly realize that people will spend the money to move is this: An old friend of the family is moving from Rhode Island to Houston,Tx. She surfed the web to find a mover. I'm not going to promote one of the Internet leaches that gave her a price but for 2000# she was quoted $1954.00. Of course the Internet company won't release the shipment to a mover at that price - the mover that would have hauled it would get $1050.00 to start cutting up with the driver. How do I know this you ask? Simply because the way this company works is that their profit comes by way of their deposit from the shipper, in this case $904.00. After hearing this, I did some research only to find that 2000# over the route miles at a 50% discount is $1954.00. (Scratching my head) Wait a second - how come a 'salesman' can sell a 50% discount over the phone and carriers can't send one into a house and get better than a 72% discount? It makes no sense other than the fact the major van lines have been all this time SO consumed by someone else getting a job they forgot the reason we do the work is for money! Look - its simple - one carrier is not going to get every job. It is impossible and stupid to try. Arpin or Allied is not going to suddenly corner the market and jack the price because they're the last ones left. It's just not going to happen.
If you take a moment to swallow that fact then you can move on. Next, if all the carriers are going to bicker over a percentage point here and there don't do it at 70% - do it at 10% or 20% - a reasonable discount any normal industry would give their customers, as mentioned in an earlier blog of mine. This would make the moving business PROFITABLE again - for EVERYONE! You cannot deny the fact that even the carriers would be making a ton more cash than they are now. Carriers must understand their drivers need PROFITS not pats on the back or awards... I'm not even suggesting that they give their contractors a bigger percentage - just give them good numbers to work with from the start and it solves alot.
How about the next time the carriers get together to play golf or have a seminar they come up with a fair low number they can all agree on for discounts. Sounds simple enough. How about make the discount the average handicap of all the players? Not mental handicap - golf handicap. I think mine is maybe a 14. We are all on the same team here in the industry just wearing different colored jerseys. When we start playing like a team instead of trying to cut each others throat everyone will prosper and benefit - even the shippers! I'll even offer up the rounds of golf - ON ME, in sunny Florida. I'm not going to hold my breath waiting for a response though..
Now to the lovely topic of the SDDC rate filing. If we can get this golf thing in before April maybe we can all agree to put in a 0% discount for hauling and SIT. 'What?!? Are you crazy?' everyone is saying. Yes I am. But there is a method to my madness and you will soon see. It is my understanding of the rate filing process now that it is a secret. No one knows what anyone else filings are and therefore 'ME TOO' went out the window. Now, when you submit rates for your SCAC, you get two chances. If they reject your first rate you have the chance to resubmit another rate hoping they'll accept that one. If not your SCAC goes inactive for the entire year. The military is accepting and rejecting secret rates without releasing what the rates are. How can this be legal? If we are 'bidding' on a contract, how can the military dictate to us what rates to file?? That makes absolutely no sense. And even if they wanted to say that it is legal - If everyone puts in a 0% discount on the first bid, everyone's SCAC will get rejected. So now on the second bid if EVERYONE resubmitted a 1% discount the military would then have to either accept the 1%'s or reject ALL SCACs again and therefore have no way to move their members. The military is not all to blame here the majority of the blame falls on the carriers firstly for letting it get this way and secondly for playing along! The military can not and will not reject every SCAC, if anything they'll have to modify the way things are now and that's the point.
You can't tell me the military knows what it costs me to operate my truck so why would they set guidelines on the rates I can make? Sounds kind of Socialistic or Communistic to me. Only I know what I need to make a profit - I don't need the govt telling me. We, I'm sure, are the ONLY industry letting this happen. I doubt Halliburton lets the govt tell them what they can bid. It's stupid. All other jobs the military contract out are paid what the bid calls for, not what they military sets it at. How come we've all heard stories of $500 toilet seats and $2300 doorknobs at an IRS building but we can do moves for less? I am going to look into the legality of telling us what we can or can't bid - it just sounds illegal. Again, I'm not going to hold my breath but if the carriers could cooperate a little I wouldn't need to - they could solve alot of major issues over a simple game of golf. Cheers to no discounts!! And freedom from the government dictating ANYTHING to us!!
:)
ReplyDelete