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I'm a Broker in the Transportation Industry. AMA (Ask me Anything

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I know Rand and the Objectivist community have a little love with the Transportation Industry so I'd thought I would answer any questions people might have.

A little Background:   

I work for Landstar Transportation:


I provide and manage specialized transportation solutions for clients in Oil & Gas, Manufacturing, and Construction industries in US and Canada. I work mostly with Hazardous Materials and Over-Dimensional Projects.

Previous projects have encompassed everything from drill pipe to entire oil & gas drilling rigs. Project specs have encompassed width up to 16' and weight up to 150k lbs.

Ask me Anything!

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What's the most interesting industry project related to your business right now? The most interesting project you were involved with recently? What catastrophe has been recently averted with your company or with a project your company was involved with, of any kind -- huge client loss, construction mistake/delay, highway close call...

How far do regulations reach in your company's productivity? For exampl, OSHA regulates warehouses, but when OSHA is away, mostly their influence disappears. The biggest expense is probably the safety lady's salary, and even she is useful sometimes. So for example, is a permit needed with every major highway transport? Are regulations tedious to comply with?

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While not to the scale outlined in the initial post, any time one does grocery shopping, refills the fuel tank, or for that matter, makes just about any purchase from around town, transportation is responsible in some way for getting the product there. What's not to love, from that aspect.

 

When traveling interstate, many weigh stations indicate that truckers need weigh in. How much does this add to the cost of products due to time lost traveling to a destination? I know the question is quite broad, and might only be indictable by a percentage per truckload, or perhaps per stop, which may add up varying with the distance required to deliver, or may be inapplicable in as specialized as the solutions are that you are involved with.

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How does that thing make a turn? :o

HA, Carefully, with a lot of experience and the help of Escorts in the front and the back of the truck.   Specific routes have to made to ensure safety.

Most of the guys that have the experience, equipment, and capital to be able to run loads like that have all been in the industry for 25+ years.   And considering truckers have a HUGE turnover rate those guys are extremely rare.

That particular piece is a 292,000#(pound) Plate Girder hauled from Van Buren AR to the new World Trade Center vehicle security building. 

 

What's the most interesting industry project related to your business right now? The most interesting project you were involved with recently? What catastrophe has been recently averted with your company or with a project your company was involved with, of any kind -- huge client loss, construction mistake/delay, highway close call...

How far do regulations reach in your company's productivity? For exampl, OSHA regulates warehouses, but when OSHA is away, mostly their influence disappears. The biggest expense is probably the safety lady's salary, and even she is useful sometimes. So for example, is a permit needed with every major highway transport? Are regulations tedious to comply with?

Good question.

Well the Biggest projects usually consist of Oil rigs for moves my boss manages on a regular basis.  Most of them from TX to ND.

Currently I am dealing with a liquidation of printing plant parts from NY to Mexico.   In fact it may be a sign of the times that the majority of my projects are plant foreclosures, liquidations, or relocations   

The most interesting project is probably the one I am on right now because of the serious issues I am having with it which also leads into your regulatory questions.    

These shipments move this Monday and Tuesday.

It is a smaller project that I got plenty of money on(freight gets bid on) needing only 4 FLATBED trucks, with easy, legal sized, light weight freight,  going from New York to Tijuana, Mexico. 

Should be easy...  Here is where it goes downhill.

For starters thanks to Regulations American trucks can no go into Mexico.  The freight has to be dropped by the American carrier and picked up by a Mexican carrier.   So all of my trucks have to go to San Diego, and then let a Mexican carrier TAKE THEIR trailer into another country and bring it back.

I'm sure you can see why someone would like that too much.

Then since industry has effectively died in the NorthEast, fewer trucks with Deck trailers take loads going that direction, thus limiting available capacity.

And the worst of it all is East Berlin's *cough* I mean California's War on truckers.   Thanks to tightening environmental regulations by California the vast majority of the trucks in the country are no longer legal to drive in that state.   Since the new regulations were put in place even the few trucks who have converted over to their regulatory standards have been experiencing strong mechanical trouble, and breakdowns(which the drivers have to pay for) even for newer trucks..   Further incentivising more drivers to say "Fuck California". 

So even though I have a lot of money I can pay drivers to take these loads...  No one can or will go there.    How much money you ask?   I'm offering to pay our drivers $7600(minus fuel expenses and fees) to drive 2500 miles, or about 4-5 days of work.

I am currently making phonecalls to find drivers to cover these shipments as im writing this, and will probably be working all weekend to do so.

 

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While not to the scale outlined in the initial post, any time one does grocery shopping, refills the fuel tank, or for that matter, makes just about any purchase from around town, transportation is responsible in some way for getting the product there. What's not to love, from that aspect.

 

When traveling interstate, many weigh stations indicate that truckers need weigh in. How much does this add to the cost of products due to time lost traveling to a destination? I know the question is quite broad, and might only be indictable by a percentage per truckload, or perhaps per stop, which may add up varying with the distance required to deliver, or may be inapplicable in as specialized as the solutions are that you are involved with.

Practically nothing...   But its not the stops that cost money...   Its the HUGE fines the DOT will slap on a driver and company for anything and everything.     If your windshield wiper doesn't look brand new, one of your tires are a little light, your paperwork, logs, shippernumber, etc etc etc etc... Boom!  Say goodbye to money.  

This is one of the reasons for the extremely high industry turnover rate.  

Every driver you see is most likely new and in his first year or two of driving.    (Which Ironically makes the roads LESS safe.)

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 What catastrophe has been recently averted with your company or with a project your company was involved with, of any kind -- huge client loss, construction mistake/delay, highway close call...

 

Landstar is one of the safest carriers in the nation(also one of the most expensive),There is not much that I as a Broker/Agent/Dispatch can do to stop it from happening, but it does happen.  

This year I've had two drivers wreak.   One who we believe fell asleep and ran off the road with a Hazmat shipment in Arkansas, and the other on a Oil rig move who crashed a Crew House into a Bridge in WV..  Was over by just two inches and shaved the whole roof of the building.

Here's what the inside of the Trailer with hazmat looked like afterward:

http://pasteboard.co/28CYprNw.png

http://pasteboard.co/28D4eiE4.png

Edited by LandonWalsh
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Here's what the inside of the Trailer with hazmat looked like afterward:

http://pasteboard.co/28CYprNw.png

http://pasteboard.co/28D4eiE4.png

What a wreck, and with chemicals! A few years ago here in Columbus a driver went around one of our many intertwining highway bends too fast. His trailer tipped, and then slid down a 20' hill into a little area between the crossing highways. They were cleaning whatever crap he had on his pallets off of the highway all day, not to mention towing it out of the giant ditch. Which leads me to...

 

Every driver you see is most likely new and in his first year or two of driving.    (Which Ironically makes the roads LESS safe.)

 

I had wondered if it was just me, or, "Are semi drivers as bad or worse than your average housewife?" I had just assumed most truckers had been at it for most of their lives, and couldn't make sense of their often idiotic, knee-jerk, aloof, or sometimes spiteful driving. This turnover also explains the lengths some of these licensing companies were willing to go to get drivers, when I looked into it a couple years ago.

 

For starters thanks to Regulations American trucks can no go into Mexico.  The freight has to be dropped by the American carrier and picked up by a Mexican carrier.   So all of my trucks have to go to San Diego, and then let a Mexican carrier TAKE THEIR trailer into another country and bring it back.

This is r-i-d-i-c-u-l-o-u-s! I wonder if any of them have been able to buy insurance to cover theft after voluntary handover?

 

I asked the questions about regulations, expecting not much regulation because complaints about regulation never really trickled into the warehouses I worked at. But, those were small (but packed) loads on pallets. By the sound of it, at least for your specialty company, regulations are heavy-handed and maybe even feared.

 

Sometimes I wonder if the trucking industry would even be this large if it wasn't for government involvement in other industries. But, I'm not knowledgeable enough about the recent history of business to say. And now that trucks are so numerous, tearing up the roads faster than they are repaired or made, a larger case than ever exists for private road ownership. Imagine how much easier your job alone would be if you didn't have to worry about commuters in between your routes -- not to mention how much more predictable the other truckers would be if companies chose who could drive on their roads, or how much nicer the quality of the roads would be to drive on... how much faster truckers could travel with dedicated cross-country lanes. The possibilities! Government roads are almost comical in their obvious failure to meet demand, if you give the roads even a second glance.

Edited by JASKN
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A semi-related anecdote that has become my favorite on the topic of government failure and roads:

 

In Columbus, OH, we finally got a much-needed downtown highway redo. It was a massive project that took forever to complete, causing daily congestion as we waited. After things were finally wrapping up, the roads looked good compared to their beat-up and narrow former versions, or even compared to most other roads, but one thing was immediately obvious: The new roads weren't large enough to accommodate even present-day peak traffic hours! In Columbus, every hour is peak traffic between 6am to 7pm, except right after lunch. But, that's not my anecdote, because honestly, I expected that the government wouldn't/couldn't build new roads to fix Columbus traffic.

 

After all the construction vehicles had pulled out, we were still waiting on painted road lines for almost a month. Workers showed up sporadically and put four different kinds of lines on the road, for no obvious purpose, all in different spots. FINALLY, the day came to paint the permanent lines, the lines presumably to remain until the day that the roads are once again decayed to the point of local-news-outrage. In the middle of the day (not at night when no one is on the roads), in traffic, a big paint truck went down the road, spraying the final lines. But! Wind! It was an incredibly windy day, maybe the windiest I've seen in 8 or so years down here. What did the union workers do? They followed their commands! Not one worker decided to speak up and suggest that the lines simply could not be painted on such a windy day. (Or, maybe one sorry soul did speak up, but was ignored?)

 

So, a year later, aaaaaalll the way down our new bridge and road, we have 3' white dashes in the middle of the road, with another 3' wind spray to the left of each line!

Edited by JASKN
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Practically nothing...   But its not the stops that cost money...   Its the HUGE fines the DOT will slap on a driver and company for anything and everything.     If your windshield wiper doesn't look brand new, one of your tires are a little light, your paperwork, logs, shippernumber, etc etc etc etc... Boom!  Say goodbye to money.  

 

These fines have to impact costs. Are they factored into the equation as a part of doing business, or does it have to be taken off the bottom line? 

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Practically nothing...   But its not the stops that cost money...   Its the HUGE fines the DOT will slap on a driver and company for anything and everything.     If your windshield wiper doesn't look brand new, one of your tires are a little light, your paperwork, logs, shippernumber, etc etc etc etc... Boom!  Say goodbye to money.  

This is one of the reasons for the extremely high industry turnover rate.  

 

 

Just to finish this line of thought, Transportation is a case study in Supply/Demand based on Regulations and Licensing.  It's bad when there is the Great Recession going on and yet truck companies cannot staff there trucks.  It is the only job I know where you can put an application online and get ten phone calls in an hour. 

 

There is a huge shortfall of truck drivers and currently the medical requirements are the fastest growing area of red tape, last DOT physical they checked my tongue size and measured my neck.     Or that you have to go to Government approved doctors now, your Doctor can no longer do DOT accepted physical (so if there is an issue you stop working until you meet the requirements, which means go see your doctor and come back) .  Combine that with the CSA that now tracks drivers scores (decent idea run amok thanks to Government one size fits none policy) or the fact the Government requires licensing requirements which channels people away from appreticeship programs and through multi-thousand dollar "puppy mills" as we call them, and you get the picture. 

 

Although it must be noted that there is a revolution in worker type going on too.  Most people want to plug in, not go out for several weeks on the road.  It's not an appealing job category to the next generation of worker and that was before you put demands on the system. 

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These fines have to impact costs. Are they factored into the equation as a part of doing business, or does it have to be taken off the bottom line? 

Taken off the bottom line, and go on their record.

 

Just to finish this line of thought, Transportation is a case study in Supply/Demand based on Regulations and Licensing.  It's bad when there is the Great Recession going on and yet truck companies cannot staff there trucks.  It is the only job I know where you can put an application online and get ten phone calls in an hour. 

 

There is a huge shortfall of truck drivers and currently the medical requirements are the fastest growing area of red tape, last DOT physical they checked my tongue size and measured my neck.     Or that you have to go to Government approved doctors now, your Doctor can no longer do DOT accepted physical (so if there is an issue you stop working until you meet the requirements, which means go see your doctor and come back) .  Combine that with the CSA that now tracks drivers scores (decent idea run amok thanks to Government one size fits none policy) or the fact the Government requires licensing requirements which channels people away from appreticeship programs and through multi-thousand dollar "puppy mills" as we call them, and you get the picture. 

 

Although it must be noted that there is a revolution in worker type going on too.  Most people want to plug in, not go out for several weeks on the road.  It's not an appealing job category to the next generation of worker and that was before you put demands on the system. 

 

 Spot on.  Yeah its hard to keep up with all the many many many different ways the government screws with the Transportation industry.     I've actually been trying to keep notes on all the ways and ask drivers whenever I can what's the worst things they deal with.

Another thing to put things into perspective is the total Profit the government makes off fuel taxes runs around $1.25/gallon, while the gross profit for the companies responsible for pulling it out of the earth, refining it, and paying for it's transportation, is around .47 cents.    Yes Obama them Oil companies are making out like bandits...  O.o

Also since i'm a Hazmat Specialist one thing I hear A LOT is how most drivers do not want to run Hazmat(even when I pay TOP DOLLAR) because they can't afford to be a rolling "DOT Bullseye".    For those who don't know...   The DOT specifically targets Hazmat shipments for additional inspections.

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Update on that MX project..

1 trailer came back Tuesday.  2 of the trailers came back today.  1 trailer won't make it back till tomorrow. 
Tons of detention pay out of my pocket.($2400 worth)
 One of the trailers on the Mexico stuff came back with damaged tires   

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Do you solicit your clients' business or they your expertise?

 

What in the way of people skills does your job require?

Rephrase the first question, I don't follow...

The top three skills would be:   Organizational, analytical, and communication skills.     People skills are not a must, but I spend 80% of my day talking to brokers, shippers, and drivers, via phonecall and email so...   You don't have to be the friendliest guy around, but it very much helps... 

My job consists mostly of negotiation, phonecalls, emails, research, google maps, cussing, putting out fires, and cussings some more..

 

Edited by LandonWalsh
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  • 3 weeks later...

This is very interesting to me. I'm one of those new drivers you speak of, been driving for 2 years. I've recently switched from Company driver to independent contractor with PRIME. I like PRME. A lot actually, but I've often wondered what the advantages might be if I buy my own truck and work with a company like Landstar.

And yes. Atlas Shrugged is near and dear to my heart for its emphasis on transportation. My favorite character is the truck driver in Galt's Gulch who did not intend to remain as one.

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