Discussion in 'Preferred Carrier' started by NULOG, Jun 14, 2015.
Right about little accounts. But if there is any decent volume to it, the story is different.
Rail works great if you're in the consolidation/distribution business. They're not going to go after your little accounts even if they do find out who your shippers are.
I've only have one carrier back solicit a company that would ship regularly from Toronto to Montreal. This was when I used to work at the brokerage for a large company with over 500 trucks. The margins were way too high for a lane that is really competitive.
If you are not going to provide any significant service in a hot lane, you have to be very careful about who you use.
That's usually the case. The railways aren't interested in the onesy-twosy deals. Those kinds of customers don't get the attention from them than they would get from other players like IMCs such as Hub, Mode, Pacer (now XPO), Wheels Clipper etc.
When it's a larger volume deal, it's always at risk unless you are the type of IMC with clout on the rails (meaning you are running a fairly significant number of containers on their lines). The IMCs use the rail lines for the linehaul obviously, but where they are different is in how they run the ramp to door ends of the movements, plus most IMCs also do OTR of some sort that lets them act more in a consultative way.
Being a broker doing business with CN/CP is just a dog's breakfast unfortunately. Their attitude isn't going to change because it doesn't need to. A far different relationship that what 3PLs have with OTR carrier partners.
My rep left me a voice mail on this issue this morning and basically stated that if CP gets a call from a customer direct, they will quote on it directly. However, if it was assigned to him and he recognized it was one of our clients, he would call us first. That being said, we have a lot of clients who don't do large volumes at around 1 to 2 containers per month where whey would not get the Tier 1 pricing and most likely be higher than what we are giving them anyway. Due to this issue was such a high volume, he is assuming that the client also received their Tier 1 pricing.
The railway's position is that they are not about to start competing against themselves. If a 3PL offers them business they need to know if they are currently handling or if they have in the past. They are not going to offer a 3PL a better rate than they might be currently getting directly from the customer. Ya cant really compare a railway's policy on backsolicitation to that of a trucking companies. When there are only 2 players in the Canadian rail market you can pretty much do whatever you want.
That's a caveat when you don't have any equipment. If you're an IMC that is running its own containers and controlling its own drayage, the relationship with the rails is different, even if you are using rail-owned equipment for the specific move. Railways want skin in the game from their partners, plain and simple.
"In talking to the sales manager, not the sales representative but one level higher, I was told “that CP Intermodal if approached by any shipper that they are hauling for at this time even if that shipper is a 3PL customer, they will quote directly to the customer if they are asked”."
That is usually the caveat in every transportation contract with brokers and 3PLs. If the customer approaches the carrier, the carrier is free to quote, however, usually by contract the carrier cannot approach the shipper. It's word of mouth as to who contacted who and it's pretty easy for the carrier (CP in this case) and the shipper to agree beforehand who called who first. Unless you have something in writing forbidding CP to transport for the shipper directly, which I doubt they would have signed anyways, it would be my opinion that you're hooped on this one.
Back-solicitation is a moral concept. There is no law, rule, or regulation against it. The only thing you can do to protect yourself is to have it written into a transportation contract.
Whenever we get a lane specific rate from CP they ask us who the beneficial owner of the freight is. It was my understanding that if they are already doing the freight, they will tell us they can't quote on it. I just assumed they did the same thing if the shipper called them directly. I am emailing my rep now to ask his standpoint on this.
Yes, it is back solicitation, but its a dog eat dog world and what are you going to do. The best cure for back solicitation is to find customers with diverse shipping needs. Steady loads that move in the same lanes week after week are an open invitation to back solicitation. And the broker must ask himself, what value am I providing if the shipper and the carrier can just as easily work together without my involvement? Back solicitation usually happens when the broker's involvement is no longer required.
In your opinions is this back solicitation?
We moved about 300 loads via CP Intermodal last year, the season ending in May 2015. Originally CP did not want to move the loads, so we worked out a plan with the shipper and consignees that were acceptable to all. The CP sales representative then makes sales calls on the shipper, takes them to hockey games, and other perks, all of this without asking us. The shipper in the summer asks CP to quote directly on the movement for this year, and they quote the same price that there were giving us, and they did not even inform us as to the fact that they were asked or that they had even quoted the customer. Needless to say we lost that business. In talking to the sales manager, not the sales representative but one level higher, I was told “that CP Intermodal if approached by any shipper that they are hauling for at this time even if that shipper is a 3PL customer, they will quote directly to the customer if they are asked”.
What do you think, is this back solicitation or not? And if so what recourse is there?
GSTRUCKS really seems to hate brokers, I bet most of his business is generated from brokers yet he rants and rants.
Although I do appreciate his rant not all brokers are like that. Some are actually legit, have an MC#, Surety Bond and Insurance. I agree that some need to be weeded out but so do some carriers. I have had a carrier take my actual load sheet to a customer and say he can beat that rate, that is a true scumbag.
Hope you're talking about Rush, lol
I can't believe anyone will still talk to those guys. They're serious bad-ass.
Only when dealing with a known double brokered load and it was not a GRoch load it was Rush Transport and it all here on this forum.
yes let's plz stay on topic.
If you'd like to discuss co-brokering, please start a new thread or refresh an old one. This one is specifically about back-solicitation. Please stay on topic.
On topic - I've not had any back-solicitation issues with Rob's company.
We're not hiding, we're right here, we just don't waste time arguing about our business on the internet. If you want to discuss please call us, ask for Shawn, 450-462-3600.
Who is T800?
Other Quebec brokers do that, he CO-BROKERS. That is where two or more brokers get together and each take some off of the top and try and sell it to some poor sap for much less than the poor shipper and or consignee has paid to have his goods moved to market. There is a difference just ask him or read the drivel on their website it is a pretty funny read and better describes CO Brokering. If you say it enough and talk fast enough it only hurts for awhile...
LOL--its funny when the topic changes to double/triple brokering G ROCH suddenly shuts up and disappears.