Farmers And Truckers

Today's Thoughts 4/26/12 Farmers And Truckers

A long time ago, just about the end of the last ice age it seems, I pulled onto a Florida farm to pick up a load of potatoes. I love picking up at farms. I do not think I have ever been to a farm that they did not treat the truckers that came to pick up their goods just as if they were part of the family. The larger farms always have kitchens and a trip through that chow line always means being treated to some fantastic local dishes. Still cooked the same way and cooking the same food that they did a hundred years ago. I always consider it a treat when I book a farm load.

Anyway, on this particular morning being that we all spent the night at a marshalling yard for several different farms, one farmer showed up just about day light with coffee and donuts for everyone. As I have already said, farmers are just downright nice people so no big surprise. As we were all were kicked back in the shed, we sat around talking about the world in general. Today's farmer had something to say that has stuck with me through the years, "Farmers and truckers have one thing in common, that being that we are both rate takers, not rate makers."

What did he mean by that? Simple fact is that no matter what we charge for our goods or our services, we will never be paid more then what others decide to pay us. The farmer with his crop of potatoes can only hold out so long before his crop starts to rot in the field. Brokers know this and use it to their advantage. The longer that the market goes without fresh product, the more expensive and the higher the profit goes at market. When the farmer finally decides to sell, he is forced to do so at a lower price before his crop is no longer sellable. Capitalism at its finest.

Truckers are in the same position. The more trucks you have available in a area the lower the freight rates go. I can charge a rate that is high enough as to make a profit, but if the brokers have a over abundance of trucks that have sat long enough to need to move the truck just to make some cash flow, then I will sit until I'm forced to move to make ends meet myself. It is only when there is a shortage of potatoes or trucks that either group can make a profit.

Under normal market circumstances, a profit can be made over time. Throw in as they have done increasingly over the years more and more government regulation and neither group can survive for long. Understanding the fact that we cannot control the cost to provide our product or services, and understanding the fact that we have no control of the price we sell them at; we simply fail one by one until a point is reached that our perspective services or goods are so far depleted that the brokers have no choice but to pay us more until we can finally survive again.

In the end, the general population ends up paying this price as they buy the goods we produce and transport at the market place. It is the single moms and the poor that cannot afford this extra cost that wind up bearing it. The process also adds more and more to the government rolls thus increasing the cost to government, which in turns adds to the need to increase taxes to keep up with the increasing cost of government support.

Round and round we go further into debt as the government tries to save us from ourselves. It is time for the FMCSA and other government entities to start understanding this process and start backing out of interfering in the market place. To survive and be able to run safe and legal trucks or potato farms, we need room to make a profit. Smother us in government over regulation, many of us we will soon go away. The costs of this process will only hurt the very ones that can least afford to bear it and the very ones that the government is trying to save them from us.

Be safe peeps …
Jeff Head.
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