How will the Canadian Freight broker survive?

Gord M

Active Member
Mar 4, 2010
304
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BRAMPTON ONTARIO
#1
In the last few months Freight Brokers have had a very difficult time finding trucks from carriers. There has been a shift in control of freight from freight brokers back to carriers. For instance we have direct customers calling and begging us to take their loads, if that is twenty trucks a week we give to the new direct customer we have. Who is hauling the outbound loads from the freight brokers that we used to haul to fill in the gaps? If no one is hauling the loads, how long can it be before freight brokers start going out of business. There are lots of good freight brokers out there, and we still do a load here and there to help them out but how can a carrier turn down a direct customer when they come to us offering $4-$5 a mile for freight going to the U.S. Solid manufacturers that cant get trucks through their normal channel of freight brokers. Am I the last to realise these times in transportation are making history.
 

Rob

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Jul 29, 2009
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#2
I too have wondered this as all the brokers I talk too are having issues. I know as a carrier that hauls direct customer freight that I still have customers waiting and freight sitting waiting until I can get power under it to deliver. Never seen it like this and the spring and summer rush is not even here yet
 

loaders

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Feb 26, 2008
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#3
I don't agree that the shift we are all seeing lately, is so much a shift of the freight, but more a shift in the rates. The control of the rates has moved to the carriers, where it always should have been. Freight brokers should never be the ones setting the rates, that task belongs to the provider of the service. Travel agents don't tell airlines what they want to pay. Insurance brokers don't tell the insurance companies what the rates should be. The same applies to transportation. I don't believe that freight brokers will disappear from the industry, as the service they provide, like a travel agency or insurance broker, is one that a certain segment of the shipping public want. If as a carrier you are acquiring new customers during this time, good for you, be sure to service them well, not only when the rates are high, but also if or when they start to fall.
 
Sep 22, 2015
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#4
You are right Gord M. It is really tough on us right now. On some of our steady lanes we were moving inbound for $1200.00 we put in a $500.00 increase and now carriers are asking for more. . I understand rates are up and carriers and drivers were overdue for an increase but I am looking forward to things calming down a bit.
 

ShawnR

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Nov 1, 2011
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Montreal
#5
right now we've simply stopped offering carriers our price and we just ask what they need to do the job.

once we identify a customer as not being "up to date" with the rates, we back down until they are ready to get their rates up to where the carriers actually want the load.

so if anyone calls G Roch, just tell us how much you want, if we can make it work, we will!
 

loaders

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Feb 26, 2008
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#6
The 2 biggest problems we are facing are 1) locating an available truck and asking what rate the carrier wants.
2) getting a prompt acceptance of the rate from our customer, before we miss out on the truck. It seems that problem #2 is as great or greater than #1
 

youngtea

Active Member
Apr 23, 2015
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#7
The entire industry is affected. If you want to look at how the market is being affected look at rail. All Rail companies are now over capacity as they are taking over the excess that trucks can no longer provide.

The only way to fix and lower rates is to have an increase in drivers. That only happens when the job market and economy crashes. There just isn't enough drivers out there to legally haul all the freight on the market.
 

Henry

Active Member
Apr 2, 2017
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#8
I find it hard to find owner operators also. I have been steady at 4 owner operators and we own one tractor. There is a shortage of drivers for sure.
 
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ShawnR

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Nov 1, 2011
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Montreal
#10
yeah we've already heard from a few sources that drivers are leaving the industry or want to work on their terms and be paid way more. this makes sense, anyone dedicating this much time to being away from home and away from family should be getting paid a premium!
 

loaders

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Feb 26, 2008
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#11
Although you hear some conflicting stories about the "driver shortage", I do think it is safe to say that the drivers leaving the workforce due to retirement, or whatever reason, are not being replaced at the same numbers by new drivers. We all know that all of the truck manufacturers are standing by waiting to fill orders for new trucks. Makes one wonder if there wasn't a driver shortage, and carriers could start putting more trucks into service, how long would it take for this increase in supply to start taking the steam out of the market?
 

ShawnR

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Nov 1, 2011
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Montreal
#12
We're feeling that the ELDs are basically cutting out a run or so a week per driver/truck, which translates to thousands of loads waiting their turn.

This combined with drivers exiting the industry, plus the rate hikes equals a completely different way of thinking about how to move that next load and what rate to give a customer...
 

Gord M

Active Member
Mar 4, 2010
304
68
28
BRAMPTON ONTARIO
#13
We have single drivers running to Houston every week and before the ELD, it was a 4 day trip and the driver got 3,400 miles at 50 cents a mile or $1,700 gross pay and they were gone 4 days. A single driver this week gets 60 cents a mile or $2,040 for the trip but due to the electronic log books it takes him six days to complete. Instead of having three nights at home every week the driver has two nights, when he resets his log book he leaves again. So this ELD has cut the drivers time at home and forced guys to spend more time/money in truck stops. For being away from home an extra two nights a week the driver only nets $340 but its an eight day cycle including the reset instead of a seven day cycle with three days of rest to reset the log. I think we haven't seen the end of driver pay increases.
 
Aug 15, 2016
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8
8
#14
I sure appreciate all these comments. As a newly formed logistics division of our asset based company, we have had great carriers who simply cannot keep up with the demand from the shippers direct. I am often told "sorry, we are full for the forseen future". Finding a niche in the market is more important now than before. And then I read about XPO and Eco logistics and others making 30 40% revenue gains because of the situation. As public companies have to report earnings, I get it, but they are actually bragging. How impressed are the shippers? No wonder the smaller guys are hurting. ouch
 

loaders

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Feb 26, 2008
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#15
A gain in percentage of total revenue does not necessarily translate into a percentage increase in profit. I am sure most carriers, as Gord M suggested, and many brokers, are seeing increases in revenue as shippers look everywhere they can for help in covering their freight. We have heard from what we thought were "long lost customers", as they too search everywhere for truck availability. This new business increases your revenue. The percentage of profit however in some cases, may be lower than previous months. We have reduced our "markup" in quite a few lanes to help soften the blow that the new rates are creating for some of our customers. Notice I said "some of our customers". Long term, loyal clients who have demonstrated trust and confidence in our services are the ones we assist as much as possible. The other, pure rate shoppers, not so much.
 

Rob

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Jul 29, 2009
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#16
We have single drivers running to Houston every week and before the ELD, it was a 4 day trip and the driver got 3,400 miles at 50 cents a mile or $1,700 gross pay and they were gone 4 days. A single driver this week gets 60 cents a mile or $2,040 for the trip but due to the electronic log books it takes him six days to complete. Instead of having three nights at home every week the driver has two nights, when he resets his log book he leaves again. So this ELD has cut the drivers time at home and forced guys to spend more time/money in truck stops. For being away from home an extra two nights a week the driver only nets $340 but its an eight day cycle including the reset instead of a seven day cycle with three days of rest to reset the log. I think we haven't seen the end of driver pay increases.
At 3400 miles and 4 days he must of went through a box of Crayolas a week. That was some fancy logging and good thing he never got in a wreck or the lawyers would of had a heyday because no way in hell was he legal. 3400 miles and 4 days (44 hrs driving time) is a 77mph average. 5 days and 4 nights maybe but 4 days total you should of stopped him along time ago.
 

liner

New Member
Nov 20, 2009
13
5
3
#17
We have single drivers running to Houston every week and before the ELD, it was a 4 day trip and the driver got 3,400 miles at 50 cents a mile or $1,700 gross pay and they were gone 4 days. A single driver this week gets 60 cents a mile or $2,040 for the trip but due to the electronic log books it takes him six days to complete. Instead of having three nights at home every week the driver has two nights, when he resets his log book he leaves again. So this ELD has cut the drivers time at home and forced guys to spend more time/money in truck stops. For being away from home an extra two nights a week the driver only nets $340 but its an eight day cycle including the reset instead of a seven day cycle with three days of rest to reset the log. I think we haven't seen the end of driver pay increases.
Love them or hate them but that my friend is exactly why we now have ELD's!!
 

Gord M

Active Member
Mar 4, 2010
304
68
28
BRAMPTON ONTARIO
#18
At 3400 miles and 4 days he must of went through a box of Crayolas a week. That was some fancy logging and good thing he never got in a wreck or the lawyers would of had a heyday because no way in hell was he legal. 3400 miles and 4 days (44 hrs driving time) is a 77mph average. 5 days and 4 nights maybe but 4 days total you should of stopped him along time ago.
 
Aug 15, 2016
61
8
8
#19
A gain in percentage of total revenue does not necessarily translate into a percentage increase in profit. I am sure most carriers, as Gord M suggested, and many brokers, are seeing increases in revenue as shippers look everywhere they can for help in covering their freight. We have heard from what we thought were "long lost customers", as they too search everywhere for truck availability. This new business increases your revenue. The percentage of profit however in some cases, may be lower than previous months. We have reduced our "markup" in quite a few lanes to help soften the blow that the new rates are creating for some of our customers. Notice I said "some of our customers". Long term, loyal clients who have demonstrated trust and confidence in our services are the ones we assist as much as possible. The other, pure rate shoppers, not so much.
A gain in percentage of total revenue does not necessarily translate into a percentage increase in profit. I am sure most carriers, as Gord M suggested, and many brokers, are seeing increases in revenue as shippers look everywhere they can for help in covering their freight. We have heard from what we thought were "long lost customers", as they too search everywhere for truck availability. This new business increases your revenue. The percentage of profit however in some cases, may be lower than previous months. We have reduced our "markup" in quite a few lanes to help soften the blow that the new rates are creating for some of our customers. Notice I said "some of our customers". Long term, loyal clients who have demonstrated trust and confidence in our services are the ones we assist as much as possible. The other, pure rate shoppers, not so much.
Yes, I was told this yesterday as well. Revenue is not always margin. Fair enough. Thank you