10
How will the Canadian Freight broker survive?
- Thread starter Gord M
- Start date
30
Oh, I think load brokers will survive just fine. In fact, I think their services will be more valuable than ever, if they are willing to put the time and effort into both servicing their customers and treating carriers fairly.
5
We have lot's of customers coming back to us now that they cannot seem to find capacity. Customers of old, new customers looking for help. It's not very easy now to cover freight, the trucks are just not around. The industry has totally changed, haven't seen anything like it before. With the increased rates, though, I would hope in the long run it would make the Truck Driving job more attractive. Hopefully that will revive capacity to normal levels even after what the ELD's have done. We shall see I guess. Interesting days, that's for sure.
30
I'm certainly not suffering... quite to the contrary. If rates go up they go up for brokers too. So instead of making 15% of $1000.00, now I'm making 15% of $1500.00 or more... A good broker will recognize the opportunities to be had. I've done some truck to rail conversions, for example.. When cheaper alternatives aren't possible I find it is easier to get higher rates.. not really bad situation. Trucker makes more.. I make more.. shipper gets freight moved at prevailing market rates.. And apparently the shine is off Uber too.. not likley going to take over the world as some would have predicted just a year ago.
15
Hey Shakey, I think the carrier "Gold Rush" is almost over but at what cost to the Canadian Freight Brokerage community?
Shakey
Site Supporter
30
No idea I tend to worry about my own business.
But from what I can see from sales requests and freight I quoted and was told I was out of my mind but I am now moving companies that didn't educate their clients are now losing business as they can't get trucks.
How many trucking companies are now kicking themselves for rates they put in on contracts last year?
Or how many are hiding capacity?
CP just announced railroader stopping end of May?
Corridor rates are already high what will that do to them?
This is not almost over Gord M so gold rush is just getting going and is now transfering over to intermodal.
Will be an interesting year for sure and we have not seen it all yet!
Cheers
Tim
30
I would have to agree with Tim, I do not see this lasting forever but I do see it for the foreseeable future. Lets face it this is a market correction that was needed. Rates and driver pay have been stagnant for way to long and maybe just maybe if us truckers can get the rates up we can pay the drivers what they not only are worth but what they need to support families in this day and age. Are some guys swinging for the fences yep they sure are but I for one am letting the broker make the first move in the rate negotiation and have been shocked a few times with there offers. Remember this is historically the slower period what happens when the farmers landscapers and construction etc get into full swing? Going to be an interesting time to say the least.
I believe that once technology is introduced where a shipper can move a "simple' shipment from A to B with pre screened, reputable carriers, and track and pay online, the need for simple load broker services will be drastically reduced. The days of lots of $50.00 mark ups by simply going on Loadlink and doing a quick buy and sell will not be required as often.
It's all about "information" about who is buying and who is selling. Once that information is available to the buyer and they are able to do it themselves, they will.
Having said that, I also believe that shippers who have more complicated requirements will always rely on experts who are more of an extension of their supply chain. 3PL's will need to offer more value added services in order to be ingrained in their customers shipping process. True logistics professionals will always be in demand and will be able to provide long term value.
If anything, I think that the evolution of shipping will result in fewer "transaction' based load brokers and more highly trained Logistics Consultants who are more commodity or industry specific.
It's all about "information" about who is buying and who is selling. Once that information is available to the buyer and they are able to do it themselves, they will.
Having said that, I also believe that shippers who have more complicated requirements will always rely on experts who are more of an extension of their supply chain. 3PL's will need to offer more value added services in order to be ingrained in their customers shipping process. True logistics professionals will always be in demand and will be able to provide long term value.
If anything, I think that the evolution of shipping will result in fewer "transaction' based load brokers and more highly trained Logistics Consultants who are more commodity or industry specific.
30
No one can definitively predict the future, however even if technology progresses to the point whatiship describes above, I believe some firms will still subscribe to the idea of one phone call, or email. By that I mean, the least amount of time involved with getting your shipment moved, will still be the determining factor. As we all can attest, having a system like Load Link, that should make matching your freight to an available truck a pretty simple, "one call" process, is certainly not usually the case. Even before things went crazy after E-Log implementation, most brokers would make at least 3, 4 or 5 calls before sourcing a truck using a system like Link. Those numbers are dramatically higher now. So, yes, a shipper can have a pool of asset based carriers and contact each of them when a shipment is ready to move, moving from one to the next until availability is secured. Or contact the freight broker once, and let them do the searching. Again, it all comes down to efficient time management on the part of the shipper and how effectively he employs his staff.
30
I agree loaders. Customers like to be able to hand off the shipping to someone else.. preferrably someone who can handle large volumes across diverse lanes. A broker who can do that efficiently is worth his/her 15%. They can hire a freight broker on straight commission or they can go the old fashioned route of hiring a traffic manager at a fixed salary plus benefits. Hiring a broker offers the shipper expertise without the committment of having a full time logistics staff. Some shippers might have a combination of in house, brokers, and carriers.. It all depends on their needs, budget, and the complexity of their shipping needs. As a broker I don't have the option of saying "sorry, I don't have a truck for you in that area today". My job is to get that truck, whether today or tomorrow or next week.. but saying sorry no truck availability is not an option.
Shakey
Site Supporter
30
30
I'm with you Shakey I was telling everyone who would listen last Sept/Oct that this was coming and some of my customers still do not get it. We keep track of every shipper and receiver that is longer than 2 hours loading and unloading and tell the customer that if it keeps up we will not be delivering to that customer in the future no matter how much they are paying in waiting time (which is no longer an option) because no matter what we charge we can make more money running down the road and also getting the truck back to do another run. It's a different world take advantage of it because this is the new norm, it is not going to "calm down" anytime soon as some people seem to think is going to happen.
30
Overall, when there's a huge demand for the services you offer then that's a good thing! Even for brokers.
20
Rates will calm down, but the new standard of picking up and delivering will not. It will actually become more stringent when Canadian E-logs come into effect.
I agree with rates calming down. It will only take a financial quarter before the accountants call down to the CEO to say that the sales increases are not keeping up with freight rates and when that happens, some lanes will stop, leveling out the supply/demand again.
Very soon, low value goods like scrap plastic will not be able to absorb the additional freight costs and those shippers will not be able to continue to sell. It will be cheaper to source the product closer to the receiver than to continue.
To top it off, some people will come out of the woodwork to run trucks that they have abandoned a few years ago due to lack of profit.
I expect that by the end of summer, things will settle down and we will be in a new normal - just like running to Chicago for $400 was a one summer thing a number of years ago.
30
To top it off, some people will come out of the woodwork to run trucks that they have abandoned a few years ago due to lack of profit.
I as well as I am sure you and all the other carriers on here would love to put more trucks on at this point. Where is this Magic (get that) driver tree you have so I can come and pick a few? I tend to agree the low value freight will start to feel the pinch with these rates and they will level off to a degree but the days of cheap freight I sure hope have gone the way of the dodo. This market correction has been due for way to long but some of the out and out gouging is a little much. Some of the rates I have heard are a swing for the fence and hope like hell they are desperate for it kind of rate. Fine and dandy in this market I guess but that kind of shit usually comes attached to the Karma train in the long run. Lots of good carriers that have jacked things up 20-30% that was needed but the 100% and above I am hearing WOW!
I as well as I am sure you and all the other carriers on here would love to put more trucks on at this point. Where is this Magic (get that) driver tree you have so I can come and pick a few? I tend to agree the low value freight will start to feel the pinch with these rates and they will level off to a degree but the days of cheap freight I sure hope have gone the way of the dodo. This market correction has been due for way to long but some of the out and out gouging is a little much. Some of the rates I have heard are a swing for the fence and hope like hell they are desperate for it kind of rate. Fine and dandy in this market I guess but that kind of shit usually comes attached to the Karma train in the long run. Lots of good carriers that have jacked things up 20-30% that was needed but the 100% and above I am hearing WOW!
You are correct, Rob. The "good" carriers have increased rates about 20-30% which is long overdue and what it should be. The ironic thing, is the carriers who caused all the safety issues and the need for E-Logs are the ones gouging at 100% and more rate increases.
30
Some brokers also looking at becoming carriers where that makes sense, and as you say, alot of it hinges on the market for drivers. Are these higher rates sustainable, and will they attract new drivers to the industry? Even if they do, it will be a year or longer before we see any impact on that front as new hires need to go through the process of being trained, and even then, many fleets won't be able to bring on new hires without experience. I guess technology is going to help as trucks today are easier to drive than they were even 10 years ago.. no more need to know how to row a 13 speed gearbox.. and way more comfortable to ride in too. And gone are the days of having to fingerprint a floor load of soup or whatever. Most frieght is nicely palletized now.. It's nolonger the bone crunching back breaking job it was when we were young.
20
That's because they are going out of business, and they know it. For years those carriers made their bones on offering cheap-shit rates, never fixing anything, and never even trying to adhere to log book rules. They can't get away with that "business model" anymore and they know it. So, they're going to make hay while the sun shines, then ... Exit, stage left ...
BTW ... heard last week Canadian rail capacity is at 117% ... that's great news for trucks
