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Truckers say they are too low and don't want to work with them



In April, Amazon launched a website that allowed truckers to take jobs driving Amazon packages in Prime-branded trailers across the country. Scott Leckliter, an Iowa-based independent truck, checked it out.

And he was surprised at how low the rates were.

"As long as you pay me market value, I'm good. I don't need astronomical numbers," Leckliter customs business insider. "But they were lower than that and it was considerable."

According to a recent report from FreightWaves, Amazon's rates in the spot market – which is when retailers and manufacturers buy trucking capacity as they need it, rather than through contract ̵

1; on average 18.4% lower than rates posted on DAT, one of the largest broker boards in the country.

"It was just not going to work for me," Leckliter said. "It was not as profitable as working with a different broker who is going to pay market value."

Read more: FedEx no longer will fly your Amazon packages – and now pressure is mounting on the company as it gears up its in-house air-freight network

Trucking companies are wary of Amazon , too. Daniel Lacroix, who is the director of safety and compliance at Franklin, Massachusetts-based Regency Transportation, duty business insider that he was not interested in working with Amazon after seeing the rates offered.

"We didn't make the initial bid process because the rates were just ridiculous," Lacroix said. "I love Amazon. I get all of my stuff off of Amazon, but I don't want to do business with them."

Amazon declined to comment.

Andy Kiersz / Business Insider

Amazon's low freight rates are happening amid a serious dip in trucking prices industry-wide.

The amount of loads on the spot market fell by 62.6% in May year over year, and rates for loads fell 20% in May year over year, according to DAT. Lexington, Kentucky-based owner-operator Chad Boblett said that truck drivers are seeing a "bloodbath."

"We cannot continue driving shipping costs down," one trucking company said in the FreightWaves report. "Where are the antitrust laws? Amazon is becoming a monopoly. Small companies will not be able to compete."

Trucking executives are too closely involved with Amazon

Outside of picking up quick loads on the company's new freight board, many trucking executives do not enter into contracts with Amazon. They say contracts with Amazon are "heavily one-sided" towards the e-commerce behemoth, according to the FreightWaves report.

That means rates can be too low to turn a profit, but it can also mean that the company demands so much capacity that it overwhelms a company's network.

"Amazon contracts are pretty demanding," Satish Jindel, the SJ Consulting Group's principal consultant, previously customs business insider. "Because they are growing so rapidly, they can suck up a lot more of your capacity that you plan to make available to them."

Read more: UPS just beat out Amazon, FedEx, and Uber to make America's first revenue-generating drone delivery

And, when Amazon suddenly shifts its logistics strategies, the company is at risk of losing a major customer that it may have grown dependent on.

"Amazon is really trying to monopolize the transportation site and dictate their own terms," ​​Lacroix of Regency Customs Business Insider. "People can choose if they want to work with them or not. But some people are going into the (trucking) business (to work with Amazon), then they realize there's not enough money to operate with them."

XPO Logistics, which is among the country's largest logistics players, said in Feb. that the company will lose some $ 600 million in revenues as its "largest customer" (believed to be Amazon) starting at in-house some trucking and logistics operations.

REUTERS / Shannon Stapleton

Amazon has been shifting more and more packages to its in-house delivery network of trains, plans, delivery vans, trucks, and ocean freighters. Amazon's worldwide shipping costs have grown fifteenfold from 2009 to 2018. Net sales increased by sevenfold in the same time.

Amazon says its in-house network is better and more cost-efficient. Many observers say Amazon is also building a third-party logistics company that will someday compete against FedEx and UPS.

Read more: FedEx no longer will fly your Amazon packages – and now pressure is mounting on the company as it gears up its in-house air-freight network

"Amazon is making a shrewd move here in saying, 'AT Kearney Vice President Joshua Brogan previously customs Business Insider of Amazon's logistics moves.

But for most truckers, the e-commerce company is not the ideal partner. Leckliter said most other truckers know how to stay away.

"There are a few that work with them," Leckliter said. "Then they go when something doesn't work with them."


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