Starting a Brokerage

[TRKINSURE]

Hi all, I'm testing the waters on expanding my horizons by looking into what it would take to start up a 3PL shop.

I know the typical answers; phone, laptop and second identity... But I'm looking for someone who can take some time with me in helping me to understand this business intimately.

I have the experience from the insurance side and I think I can use that platform to create my 'differentiator'.

I am an eager & quick learner - hoping someone will allow me to buy them a coffee and allow me to shadow them for a day so I understand exactly what it takes and what I would need to become successful.

All thoughts/opinions are welcome!

 

[loaders]

Based on the postings you have made to date, I think it is safe to say that you have plenty of exposure and knowledge of the carrier base you would require. Perhaps as important however, is having customers, everything else is really secondary. Perhaps before taking the ”leap” and starting your own brokerage, you could consider a few years as an employee learning the ropes? As well, having a good solid financial base, either self funded or through the banks might be a problem for someone just starting out.

 

[marylou]

call me direct line 519-281-4417, i believe in paying it forward and would gladly talk with you.

 

[TRKINSURE]

Based on the postings you have made to date, I think it is safe to say that you have plenty of exposure and knowledge of the carrier base you would require. Perhaps as important however, is having customers, everything else is really secondary. Perhaps before taking the ”leap” and starting your own brokerage, you could consider a few years as an employee learning the ropes? As well, having a good solid financial base, either self funded or through the banks might be a problem for someone just starting out.

Thanks Loaders and yes, I think it would be more wise to have an employee/employer relationship to start. Having said that, I can’t walk away from the insurance so it would be a little bit of moonlighting until I was “all in”.

was that a job offer by the way

 

[Igor Galanter]

And who is going to guide us further in this complicated insurance business?

 

[Packrule]

I would suggest owning a truck. REally anyone can broker but the good ones get it and don't bastardize the rates and if they have trucks often are quoting based on real trucking costs. To many brokers out there have no idea how to quote so call around to the lowest cheapest guys and or under cut even to secure business. if you wouldn't put it on your truck why would anyone else.

 

[Freight Broker]

Only thing is some of the cheapest brokers out there are carriers with brokerage divisions.. I'd name names but... Basically they attempt to whore the loads out for the lowest price, and then, if there are no takers they will put their own truck under it. Yup.. see it time and again. Kinda humorous sometimes.. Carrier wants $4.00 plus a mile yet that very same carrier flogging the load for a buck a mile on the boards.

 

[chica123]

I just don't honestly see how you could moonlight and make this work. Being a broker that a carrier can trust, means being available when problems present themselves. I don't think I would personally take a load knowing the broker is not going to answer my call or email until they are finished with their other job. Being a broker is more than just putting a carrier on a load. There are a million and one issues that arise over the course of a day and if you are not fulling invested in your brokerage, you will have a very hard time finding customers and carrier to partner with, in my opinion.

 

[Freight Broker]

I agree.. its a 24/7 24 hours a day proposition. I guess if you have staff you can work on your behalf then yes.

 

[loaders]

I don’t think owning a truck would have any effect on whether your brokerage operation is successful or not. Travel agents don’t own airplanes, and insurance brokers don’t own insurance companies, so why should a freight broker be any different? The ability to understand and quote freight rates isn‘t dependant upon vehicle ownership. If it was, you would never hear of an owner operator going bust. It is my opinion, based on the numerous posts on this site, that carriers who broker freight are more likely to be slow in paying their “brother“ carriers for services rendered than non-asset freight brokerages. The main reason for this is too much competition for the available cash flow. Drivers wages, truck payments, fuel, insurance...an endless list of people to pay to support your core business. The bill from Bob’s Trucking for that load they did last month, well.....maybe we can get to it next month. Unless a freight broker is draining his company of cash for himself, there isn’t the same number of multiple demands for payments. Some salaries, rent, general overhead, the rest pays the carriers. Not to say that there aren’t some carriers who can successfully wear both hats, nor to deny that some freight brokers out there are notoriously slow in paying their bill. Just generally speaking, it would appear that owning one truck, or one hundred trucks does not make you a better freight broker than the person who owns zero.

 

[Jim L]

I agree with @loaders . A freight broker can stand on its own merit without ownership of a truck. They only need to be fully aware of all the complications that could go with brokering freight and have a process to work with it.

What we need are more brokers who understand the whole freight cycle. Currently there are too many running with the model of quoting freight as cheap as possible to get it and then begging someone to do it. This is a process that is doomed for failure - there is no investment or interest in either of the business relationships on either end; neither the freight owner or the carrier. A good freight broker will recognize the price point freight needs to be at and price accordingly. If they get it then move it with a carrier that will do the job as expected for a price that meets the budget. These good freight brokers are also aware of all the issues that could arise and address them accordingly. Whether that be a tight schedule, a horrible customs broker, a shipper or receiver that always takes hours to do their job, appointments or any other issue in the freight cycle, the good broker should be able to identify it, discuss it with the freight payor and advise the carrier who prices it accordingly. Only then will everyone get the service they expected to pay for and a service provider who was happy to do it.

 

[lowmiler88]

Freight Broker or Trucking Company, you have to set your expectations - if you expect to get paid in 30 days or less then you should be paying in 30 days or less. If you want quality carriers you have to pay fair rates and stay within their terms, if you want to work for quality FB's then give them the service they deserve.