Al’s Corner – April 2022

     115th Annual Dinner is Thursday April 14th

April 2022, wow, how the first quarter zoomed bye.

First, a huge shout out to the people of Ukraine.  Our hearts and prayers are with you.  This is so wrong!

Big event this month is the Annual Dinner at the nostalgic MAC in downtown St. Louis. This night is our showcase event each year. The cost is $70 per person and includes dinner, networking, a fabulous speaker, 3 Lifetime Achievement Award winners, plus a 4-hour open bar. You can even get a hotel room there too is you want. Big Night! Contact Brad Reinhardt for more information. 

The Lifetime Award Winners at the Dinner are Aggie Loos, Sharon Orrison, and Millie Virdue. These three impressive ladies I have known for many years, and met them through the TNT Transportation Club, I believe.  They are not only beautiful, and extremely nice, but very deserving of this award, as they have been regulars and volunteers at so many events. They are classy, wonderful ladies that I always get a big hug from. They have had a huge impact on our group, and it should be quite a night for them and all who attend! Five years ago, I won this award, so I welcome you all to the club of award winners!

Transportation thoughts—the market seems to be stagnant, with freight rates staying pretty much the same the last few weeks.  The terrible fuel surge in price by $1.30 per gallon around March 1 made prices go up fast.   Most companies had base rates plus fuel surcharge, so the base stayed the same, but the cost went up big on the fuel.  The Fuel Surcharge was .50 per gallon on January 1.  So, if you had a 1,000-mile shipment the charge was $500.  Now, it is at .80 cents per mile, raising the cost $300 on that load =$800.

Adding on to the price issue was the carriers adding on to the base rates too, getting pretty much whatever, they wanted at times. But drivers do a lot of very hard work, and are many times not treated very nice.  So, from their point of view, it is understandable.

Now the shippers have not been faultless either.  Many shippers have reduced the size of their boxes, or just raised their rates to the consumer by 30% or more.

Here is an example of how much the freight rates affect the cost to the consumer. Now this only is talking about the freight rate on the end or delivered product.  Not the increases occurred on inbound materials and such, so there is more to it than my example.

20-pound box of product

80 cases on a pallet

24 pallets on the truck times 80=1920 cases shipped

$40 per case average sale price for the product=$2 per pound

$40 x 1920 cases=$76,800 sell price for truckload of the product

So before on January 1, this 1,000-mile trip cost say 2.50 per mile plus .50 per mile fuel surcharge=$3.00 per mile for a grand total of $3,000. 

On April 1 this same load is $2.50 per mile plus .80 cents per mile FSC =$3.30 and $3300 cost to the shipper.

Broken down the box now costs .15 cents per case more to ship.

I guess the one way you can figure out if companies are price gauging or not is by looking at their stock prices.  My take is most companies are raising their prices double and coming out just fine.  By the way, we should hope these companies do well because we need goods and services in order to survive too.

A big problem in transportation world it is very hard finding new or used trailers, and new semis too.  New are on back order on both, and the price has gone up I think around 20-30%.  So, if you are seeking carriers to drop trailers right now, that is not an easy one. Finding used trailers is no picknick either.  

How about fuel, when it went up by 25 % in one day, what was that fuel bought at, this was greed.  But it is the way our society works. 

I know this stuff is boring (not to me) but many people I believe are misled by what is going on, blaming one political party or the other, to me is seems way bigger than that!

Have a great month, I hope you found this a little helpful, or interesting.  AL