Charges by Brokers

[Tramp1947]

I know there are a lot of you out their that are Brokers. I am curious if there is a amount charged that is considered fair? Lately I am finding some are charging upwards of 50 - 60% for having a phone and computer and time on your hands. Some are getting freight from this U SHIP and farming it out as their own where as others are just using the LINK and re brokering that two or three times.
I realize that there are a LOT of good brokers out there that farm out THEIR OWN freight and take a reasonable percentage for the work they have done to set up a load and done the due diligence on the freight. Those of you that are like that I THANK YOU. Unfortunately you are getting to be few and far between. It is to the point where you can't even rely on getting a confirmation anymore.

 

[Freight Broker]

Fair is whatever the market allows. On most stuff it works out to somewhere between 10 and 20%. If the broker does more, then his/her percentage goes up, as one would expect. And sometimes there is no "set percentage" on any given load... for example, my customer and I prepare a budget based on projected sales volumes and transportation needs. So my budget might be 500K for the year... my customer doesn't care if I blow that on one load or how I disperse it provided I cover their loads and remain within budget for the year.

I can't comment on rebrokered freight.. I don't do it, but I guess there are people who do. Not my cup of tea.

 

[FR84ME]

I agree with Freight broker, 10-to-20% is the usual these days. We also never double-broker, our loads are all for our direct customers. This business is more of a crap shoot than it's ever been. Carrier rates are all over the map so it is very hard to quote a customer on a load for next week when who knows what the cost is going to be, we do take it on the chin sometimes. To all of the carriers please work with us when we call for rates, we are gun-shy to quote from the hip then unable to move it. It's hard to believe but years ago we quoted and held the rate for a year, now we spot quote more than ever.

 

[whatiship]

As a carrier, I could care less what the broker's margin is. That is his business. The only number that matter is if the rate we agreed to works for us. If not, just say no thank you. If the broker makes a great margin and the carrier doesn't then shame on the carrier for agreeing to it and vice versa.
"Fair" is the number agreed to" It is only not fair when either party doesn't live up to their end of the deal.

 

[Michael Ludwig]

It's a market-oriented economic system ... what does "fair" have to do with it ?
I'm with whatiship ... as long as I get my numbers, I couldn't care less what the broker gets. If he loses the business because he's too high, I'll find out who has the business and see if I can work a deal with him (or her as the case may be).

 

[loaders]

Absolutely! As soon as the carrier says " yes, I can make that work", fair has been established. If the brokers makes a 5% or a 100% mark up, it is inconsequential. fR8FME, I agree, it is reckless and perhaps even stupid, to try and quote a customer without first having checked with a few carriers as to what the rate should be. Quote low, you get it and then can't move it, or quote high and not get that lane or worse, have the customer think your rates are all too high. Carriers are the ones providing the actual service, they know best what the cost of that service should be.

 

[Freight Broker]

I never ask carriers for rates as I learned long ago they hate that.. so I "eyeball it" and go from there.. Most of the time I'm in "the zone".. sometimes (rarely though) I'm totally off.. it happens. I just make sure that I'm totally off towards the high side.. so I don't hear those dreaded words "wow.. your rates are fantastic..cheapest we've ever seen!"..

 

[Tramp1947]

The main problem I seem to be having with brokers these days is the lack of consistency. I and two other carriers recently did a load for a broker. When loading we got comparing confirmation sheets.. Go figure three loads, same place to the same place, same broker. $1,000. spread in the rates.. I realize YOU GUYS HATE IT WHEN TRUCKS TALK TO EACH OTHER. But guess what we do.
I would not bring this up if it were a RARE occurrence. Just don't use him anymore and move on. BUT IT'S NOT. It seems more and more that the brokers are setting the rates and having a bidding war to see who will do it the cheapest. YA I know that's business. It may be business just not FAIR business.

 

[loaders]

So, 3 different carriers were offered the same load. Those same 3 carriers all said yes to 3 different rates. Unless the broker had to threaten the lives of a carrier's family to get them to agree to the rate, what exactly did the broker do wrong here? I suppose he could have said to the cheaper rate carriers, " oh no, I will have to pay you more than what you want, it is only fair".

 

[Michael Ludwig]

@loaders ... ROFLMAO ... good one.
It's called business, not fairness. Beyond that, a thousand dollars on a same lane is quite a spread. If that's a correct figure then my suspicion is a shipper had to get loads from A to B no matter what. A load broker was tasked to find carriers to do the job and mitigate the cost as best they can. Simple economics ... You start at the bottom of the rate matrix and work your way up until you find enough carriers to cover the requisite number of loads.
As a carrier, if you undercut yourself, that's on you, not the broker. It's not his responsibility to make sure you are profitable. If you were the guy that got the top end, then kudos to you. You're smarter than the average bear .

 

[martinetav]

The main problem I seem to be having with brokers these days is the lack of consistency. I and two other carriers recently did a load for a broker. When loading we got comparing confirmation sheets.. Go figure three loads, same place to the same place, same broker. $1,000. spread in the rates.. I realize YOU GUYS HATE IT WHEN TRUCKS TALK TO EACH OTHER. But guess what we do.
I would not bring this up if it were a RARE occurrence. Just don't use him anymore and move on. BUT IT'S NOT. It seems more and more that the brokers are setting the rates and having a bidding war to see who will do it the cheapest. YA I know that's business. It may be business just not FAIR business.

Heck, we have done the same load for people and they bring us down every time. Got to a point that we just told them to find someone else. That we were looking to work with people who are loyal and respectful and that they were not showing the characteristics.
Business and fairness can go together except when greedy comes to town...

 

[Salma]

The main problem I seem to be having with brokers these days is the lack of consistency. I and two other carriers recently did a load for a broker. When loading we got comparing confirmation sheets.. Go figure three loads, same place to the same place, same broker. $1,000. spread in the rates.. I realize YOU GUYS HATE IT WHEN TRUCKS TALK TO EACH OTHER. But guess what we do.
I would not bring this up if it were a RARE occurrence. Just don't use him anymore and move on. BUT IT'S NOT. It seems more and more that the brokers are setting the rates and having a bidding war to see who will do it the cheapest. YA I know that's business. It may be business just not FAIR business.

First of all, drivers/carriers should absolutely be talking to each other! And we definitely do! Otherwise, how else would you have discovered this huge rate discrepancy?
BUT the most important point is this: carriers need to stop lowballing each other! We are our own worst enemies and we always have been. As @loaders said, how could this have happened in the first place without these carriers agreeing to those rates?

If carriers refuse to participate in these "bidding wars" then these types of conversations and discussions would cease to exist.
We are a small carrier and it hurts A LOT when I am refusing loads left and right because the rates are too low but at the same time I know there are several other carriers waiting in line right behind me to snatch up those loads without a second thought.

I will never prostitute my company or myself by accepting insulting rates... ever!

 

[Freight Broker]

I know, but the long and short of it is that's how competition is supposed to work. If Carrier/broker A is cheaper than Carrier/broker B and can get the job done at the lower rate then the winner is the customer and the consumer of the goods. We all want deals on our trips to Cancun.. no one wants to pay Sunwing top dollar to get us there.. same with freight.

 

[dad2andrew]

Unfortunately transportation has become the worst reverse auction. Someone always has to get home to get the next outbound to get into the area where they can get the bigger paying inbound load, and then the cycle repeats itself and on and on it goes.

Do I sit the driver for the sake of $50 out of principle and maintaining my rate, or do I keep the driver rolling, so that he is happy and doesn't jump ship to another company that promises to keep him moving instead of sitting making no money.

 

[Freight Broker]

It's always been competitive.. at least for as long as I've been in it. The only way to achieve some kind of traction on rates is to have some kind of angle, however tenuous that may be. Often its keeping the operation as simple as possible and the overhead down as far as possible. The carriers who do better (from my vantage point as a broker) are the ones who run one or only a few lanes.. back and forth, and they don't deviate. Its the same run week after week... it keeps the operation simple, drivers like the stability, and brokers/shippers come to see them as the go to people in those lanes.

 

[Salma]

... Do I sit the driver for the sake of $50 out of principle and maintaining my rate, or do I keep the driver rolling, so that he is happy and doesn't jump ship to another company that promises to keep him moving instead of sitting making no money.

I, of course, would not make my driver sit and wait around if we're only talking 50 bucks here and there.
I was referring more specifically to the larger rate differences of several hundred dollars and up. If we hauled a load for someone last week at $1000 and this week that same load is somehow now $750, I'm not going to play that game.
I prefer to fantasize that the other low-balling carrier will have a major service failure and that my customer will beg me to haul their loads again.

 

[duke22]

Couple of things here folks, first of all who's to say one of the trucks didn't run 200+ miles to load, laid over to load next day etc? Secondly who's to say the broker didn't quote the customer $1100 for one load and $2100 for the other or something of that nature? I work with US customers that ship parts to job sites, if they have a required delivery date (crane apt, meeting installers) and 3 identical loads sometimes the spread can be that outrageous to get the trucks lined up. Has a trucking company never quoted a customer 2 separate rates for an identical load because they had to drag a truck? Get real.

 

[ZoCNX]

I, of course, would not make my driver sit and wait around if we're only talking 50 bucks here and there.
I was referring more specifically to the larger rate differences of several hundred dollars and up. If we hauled a load for someone last week at $1000 and this week that same load is somehow now $750, I'm not going to play that game.
I prefer to fantasize that the other low-balling carrier will have a major service failure and that my customer will beg me to haul their loads again.

Nothing personal but.... today you drop $50.00 and the load went for $950 (instead of $1000) next day different carrier drop extra $50 on the 2nd load (same line). Next day, on the 3rt load broker pushing to save extra $50 from $900.00 by the end of the month same load / line can drop to $750.00 or even $600.00 (like in Med West loads). As a result we ending up having drivers sitting on the truck stops because of the rates are too cheap to haul. My point is those extra $50 here and there DO make a difference.

 

[whatiship]

Broker might suggest a rate, but the carrier sets it by agreeing to it. Some may consider this a racist comment (not intended) however many of our new Canadians seem to do a better job of negotiating what they want since it is just part of doing business in the homeland. They seem to stand their ground more since accepting less than they want is considered bad business on their part, rather than accept a low rate and get mad at the one who offered it.
Not always, but more often than not. There are plenty of good born and breed Canadian's who can negotiate with the best of them, but many seem to have a tendency to take the past of least resistance and move the truck at less than they could get with a couple of minutes of bargaining.

 

[Michael Ludwig]

First of all, drivers/carriers should absolutely be talking to each other! And we definitely do! Otherwise, how else would you have discovered this huge rate discrepancy?
BUT the most important point is this: carriers need to stop lowballing each other! We are our own worst enemies and we always have been. As @loaders said, how could this have happened in the first place without these carriers agreeing to those rates?

If carriers refuse to participate in these "bidding wars" then these types of conversations and discussions would cease to exist.
We are a small carrier and it hurts A LOT when I am refusing loads left and right because the rates are too low but at the same time I know there are several other carriers waiting in line right behind me to snatch up those loads without a second thought.

I will never prostitute my company or myself by accepting insulting rates... ever!

It's the nature of our business ... we eat our own.
If you think of the big picture, there is only so many loads to go around. A fixed number so-to-speak. If you want to grow your company, you need to have more loads. How do you get those loads if you don't take someone else's loads away from them? How do you take them away from the other carrier? Since you have nothing else to offer, you reduce the rate. Yes, you can make an argument for service, but what is service worth? Is it even possible to put a price on service? A wise man once told me if he could figure out how to quantify it and put a price on service, he would be a billionaire

And yes, you will prostitute yourself and your company ... rent is due at the end of each and every month.