Discussion in 'Preferred Carrier' started by NULOG, Jun 14, 2015.
Well said Mike... Well said.
Yep, I've seen that as well. Funniest thing ever. Shipper eventually lost an account worth millions... couldn't get his goods to market.
On this whole subject, it's relationships that matter. Theman and I have a great relationship. I do my very best work for him and he in turn pays me an honest day's wage for an honest day's work. We are able to talk and work through any and every issue whether is develops from my side, his side, or the customer's side. It's that type of relationship that I look for, and it's for that reason our list of brokers is very short indeed.
Our driver do carrier business cards but they don't have any names on them and are meant for recruiting new drivers. A huge portion of our business is from established freight brokers that we have good working relationships with and thanks to them we are business for as long as we have been.
Let's just call it what it is.........unethical! You can complain about freight brokers and how mistreated you are by them, but that doesn't justify attempting to secure the customer you agreed to service on their behalf. If you need a larger customer base, do it the old fashioned way by hiring a sales person or getting out of the office yourself and knock on some doors. Back solicitation is a lazy, under handed way to obtain new customers and those who practice it should be "outed" and identified on this forum. In my opinion, it ranks right up there with double/triple brokering.
Less literal interpretation of theman's comment:
Shipper/receiver contracting a 3rd party provider with the intent to develop a carrier list over a period of time, then approach the carriers all directly cutting out the 3rd party. We've only seen this twice in our 26 years. Funny, when the economy shifts (outbound vs. inbound) they scramble and call everyone in their Rolodex including the 3PL's they 'used'.
Hope this helps!
Back solicitation by the shipper/receiver???? There is no such thing, customers are free to shop whenever and wherever they please, it's their money.
Wow ... that's quite the rant from GSTrucks.
Anyway, I can speak from both sides of the fence.
There really isn't such thing as 'broker' accounts and 'carrier' accounts. It's ultimately the paying customer who decides what they use carriers for and what they use brokers for. Some customers only want to work with asset-based carriers, sometimes because of the nature of their freight and the movement along the supply chain, some because they feel more assured that they won't have to deal with the 'spot' market if they contract with asset-based carriers.
Shippers that have lot of low volume lanes or are sporadic tend to use brokers because they can get more done with less vendors. Even if they pay a bit more per transaction, the trade of between the cost of managing vendors pays off.
So my general experience is that if the customer is ethical, they buy according to need and won't screw up a relationship working with parties who they know are going behind their partners' backs.
Are there bad brokers out there? Sure. But there are bad carriers out there too. But mostly, carriers are looking to service their customers needs at a fair price point. Brokers look at it a bit differently as we try to work with our customers budgets to execute their freight ... and if their expectations are unrealistic, yes ... it's the broker's job to advise the customer and try to manage their expectation.
But trying to price based on the highest carrier price is nonsense. And also saying that the level of service is directly relatable to price is also. I've actually found that I (I mean my employers through freight I have sold) more often get screwed by higher priced carriers than low ones, though both happen. It's usually a matter of what fits better whether with the carrier's overall network, or their situation at the time in the cases of some.
As far as 'whatchpay' goes ... I believe we all negotiate, it's part of our jobs. Cost plus is great in a perfect world because it removes a lot of risk, but most customers don't have an appetite for it.
This will always be a problem until the brokers revenue is generated by recieving a percentage of the revenue as opposed to the spread between what they buy it and sell it for. If thier income was derived from getting the highest rate for the carrier as opposed to the lowest rate for the customer we would all live happily ever after...........
Thanks for the info, Newmarket Equipment is in our backyard, and we've never had an issue of back solicitation with Randy @ Newmarket Equipment Sales, but will keep your information in hand.
Here is what I don't understand about brokers since they are all broker "accounts" out there these days (I don't know who the brokers got the accounts from if this is the case...?!); we get all the details on the shipment from the broker to try and book on the phone, then ask what rate they can pay on it, since obviously its the brokers account and nobody else can touch it according to responses below and we did not quote your customer, then the next broker question is "I don't know, what do you need?", give them our rate and the response is "oh, no that won't work" or no way, way to high". Well you don't know what you can pay but you know what is too high; how about as the broker with these "holy grail, untouchable accounts" tells the carrier what they can pay to avoid frustration and move the freight with reliable carriers at fair rate. (I assure you that if you took that mentality as a broker instead of moving it with the cheapest carrier you would have a lot less "backsolisitaton" problems). Maybe some of the carriers out there are just fed up with being told their rates are "too high" by a broker that doesn't know the difference between a truck and a golf cart, moving freight simply on price point? I guess the first questions we should ask as a carrier is "watchupay?..." not worrying about making sure we can actually fulfill the movement obligations like some of the more unreliable carriers and then we all save a bunch of time as it seems the rate negotiation has gone out the window. Maybe that's why carriers are going direct to customers as they are fed up with some brokers in this industry not adding value, simply taking away revenue for sending an invoice to the customer. Carriers need to do so much customer service these days with some brokers that we are doing all of the work anyways, and doing it better in most cases. As a broker maybe look at your business and ask "Am I actually adding any value to this customer or are you simply taking margin out of the rate between carrier and shipper"?. Just about every single Quebec based broker these days is a shipment through American brokers (don't mean to stereotype, but stereotypes do come from somewhere... and if you call it "co-brokering", then for a carrier backsolisitation is just a "customer lead" at that point...). If I had a dollar for every order that we received inaccurate information from a broker I would not have to be here at work dispatching trucks today, only to get in trouble for "contacting their customer" for confirming shipment details, yea, to get the proper info because the 3rd party was not capable, or just didn't care. I guess the broker doesn't have to send a 75' long piece of equipment into a spot that is too tight for a 24' straight truck so why would that be a concern?!... I think carriers really need to start taking control of freight rates; I think the biggest problem is when brokers started to decide what it cost to run a truck...and that it is ok to pay a carrier in 60-90 days for a minimum rate, and say what you want, that still happens. Honestly as a carrier all I want is to be treaded fairly from a broker (with the rate and information provided) and that comes with trust, which comes from building a relationship (I don't even have to discuss rates with the majority of our broker customers). If you are getting backsolicited in my opinion you are dealing with non-reputable carriers that run for nothing and/or you don't have a relationship with your carriers therefor you don't have trust with them and yes, as the "middle man" that is your problem because you are supposed to benefit to both the carrier and the customer, and obviously didn't create a relationship that avoid these situations for you, just think about it from that perspective for a bit and you might be able to add some value to yourself as a broker... (my thoughts for the day, *exhale*...)
but then you have a few transport companies that are into the dirty deed of back dooring on a regular basis. I used to work for one that did not care as long as his pocket was getting lined. It is carriers such as that one that is responsible for the drop in the per mile rate for the honest transporters. We all would like to just make a living and guys such as that make it harder and harder for the average trucking company to even make a buck. Those types of guys have to be eventually weeded out
When there is back-solicitation that is being engaged by the shipper/receiver, it actually reflects most badly on the shipper/receiver ... I agree. But confidentiality has to be kept.
Shippers are constantly looking for cheaper rates. I can't begin to tell you how many times I've been approached for rates on a load/ lane just delivered. If the broker is in good standing I just tell them I'm happy working for the broker BECAUSE I don't back solicit, they usually reply with this has nothing to do with the broker I'm ( customer) asking you direct. My price if quoted is usually way higher than they're presently paying and they walk away mumbling. My drivers where always told don't back-solicit but if customer asks for a card give them one and tell them can call us for rates. More often than not it's the shipper/receiver stirring the pot not the carrier. Just My Two Cents
When a broker sends us a laundry list of destinations to price out our response is you tell us what you are paying and we will tell you if that works for us. A lot of them do not like it but we know we are not going to be the cheapest (also not the most expensive) so we see no freight for work that in reality they should be able to price themselves. Which if you do not already know what the rate to Atlanta or Indy or Philly is then really you should not be in this business.
when you sell on price you end up losing on price. as you wrote, it's a lose-lose for everyone.
While I agree I must add it hurts everyone because it drivers rates down. The last thing the industry as a whole needs is rate cutting but it still happens everyday. I just wish brokers and carriers alike would tell these shippers that are constantly looking for rates on every lane every time the load goes to go pound salt. But alas that will not happen because the rate shopping brokers of the world seem to like driving me nuts calling me asking for pricing on the same lane time and time again. I guess they think I will have a relapse or moment of weakness!!
Back soliciting only harms the carrier. Here is why.
-For argument sake, let's say the broker in question gives the carrier in question 20k per year in revenue
-The shipper in question ships 20k per year for this particular lane that is being back solicited
-The shipper lets the broker know about the back solicitation if they have a good relationship
-The broker does not use the carrier anymore and the carrier now loses 20k of business per year going forward from the broker.
-If the shipper accepts the back solicitation...guess what! The next carrier that comes along a month later with a better rate gets the business.
-Now the carrier is left with nothing. He loses the broker's business and the shipper's business. Times this by the many times the carrier has back solicited and he is left with a poor reputation and a dwindling business.
As a small carrier I can see how big the problem is for a broker. When I was driving I was doing everything possible to be as nice and polite with the customer. If a broker doesn't want me to call the customer and get into some kind of relationship with him, he doesn't put his number on the confirmation amd does all the arrangements. Some people don't do their job properly so I have to do it. And what can I do if for the next load they call me directly?
It was good of you PR to give him time to respond before outing him, at the same time thanks for the heads up!
Well morning Folks....no reply and it's been a week so I guess he doesn't care about the issue. If you want the possibility of back solicitation give your freight to Randy at Newmarket Equipment.