Brokers = low rates?

loaders

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Feb 26, 2008
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There appears to be quite a bit of chatter on the Shout Box feature of Inside Transport, regarding low rates and the effect that freight brokers have on rates in general. A great deal of it seems to be from newer members who for whatever reason, don’t want to participate on the main board. Although carriers of all sizes use the services of freight brokers from time to time, it is our experience that smaller carriers use these services more often. The reasons are obvious, a lack of their own direct customers, no sales staff to develop new accounts and a general lack of experience and or knowledge in how to obtain direct customers. If your business relies exclusively on dealing with freight brokers, you will be constantly faced with low rates. Even the “better” freight brokers (including myself!), have a few customers where the rates are marginal at best. My advice to you would be do whatever you can to develop your own core of direct customers and then use brokers only to augment that business. Also, be prepared to be brutally honest with yourself as to what your operating costs are. Operating at a higher cost, even marginally than your competition, will always put you at a disadvantage. Connect with the “good” guys and ignore the low ballers. If you accept these low rates you have become a major contributor to the problem. People like to complain about brokers offering ridiculously low rates, in the same way they complain about professional athletes asking for sky high salaries. The problem is, there is always a team owner willing to write the big cheque, just as there is always a carrier willing to haul for the stupid low rate.
 
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The vast majority of the time, we ask our carrier for their rate and not the other way around. It helps us stay in tune with the current market and the carrier is the one who is selling their service and should be the one who sets the rate.

When you go into a store or a restaurant, the person selling the service or goods doesn't ask "how much you pay?", so I could never understand why that is the first thing out of a carrier's mouth when they call.

As loaders mentioned above, we have certain customers that only care about rate, we have certain customers that only care about service and we have certain customers who care about a combination of rate and service.

Just like there are good and bad carriers, there are also good and bad brokers. Weeding the bad ones out over time will only help your business.

The top carriers understand that brokers act as a sales arm for their company without having to pay the salesman salary, commission etc. They help fill their trucks when their regular customer base doesn't have freight in a particular area when they need it.

The top brokers understand that reliable carriers are integral to their business and treating them with respect and paying them fairly is a major key to running a successful brokerage.
 
The real question is what is considered a good monthly gross income for a truck.
 
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Loaders, A lot of this is stemming from a facebook group that has about 26k members that are for the most part a bunch of last year or so entrants into the carrier side that thought name your price was the way freight worked because of the silly season we had last year. They are now finding out that it is not all peaches and cream and that brokers like TQL etc are lowballing like crazy in the US and they are going nuts over it. Quite comical some of the postings rants etc as they want a total TQL ban and for TQL to go tits up. JB and CHR have been added in last week or so also. Pipe dreams for the most part but I guess TQL is aware of it and not liking it for my understanding.
 
The real question is what is considered a good monthly gross income for a truck.
I am sorry, but if a carrier has to ask that question because he doesn’t already know the answer, is unfortunately doomed to failure. Again, without a rock solid understanding of what your costs are, what your required revenue is, what your projections for the next year are, all of these things are vitally important to your success in this business….hell, any business!. There are too many guys out there who think they had a good day if they can place some change on the bedside table before they hop into bed, or who think that hope is a good business plan. Working hard is great and I see and come across lots of small hard working operators every day. The ones I want to deal with and the ones who will succeed however, are the ones that know how to work hard and smart!
 
Loaders, A lot of this is stemming from a facebook group that has about 26k members that are for the most part a bunch of last year or so entrants into the carrier side that thought name your price was the way freight worked because of the silly season we had last year. They are now finding out that it is not all peaches and cream and that brokers like TQL etc are lowballing like crazy in the US and they are going nuts over it. Quite comical some of the postings rants etc as they want a total TQL ban and for TQL to go tits up. JB and CHR have been added in last week or so also. Pipe dreams for the most part but I guess TQL is aware of it and not liking it for my understanding.
when will the 'Return of the crazy season' and 'Crazy season strikes back' be released ... waiting on those to retire lol
 
Loaders, A lot of this is stemming from a facebook group that has about 26k members that are for the most part a bunch of last year or so entrants into the carrier side that thought name your price was the way freight worked because of the silly season we had last year. They are now finding out that it is not all peaches and cream and that brokers like TQL etc are lowballing like crazy in the US and they are going nuts over it. Quite comical some of the postings rants etc as they want a total TQL ban and for TQL to go tits up. JB and CHR have been added in last week or so also. Pipe dreams for the most part but I guess TQL is aware of it and not liking it for my understanding.
would be interested in finding out about this "facebook Group" PM me
 
The vast majority of the time, we ask our carrier for their rate and not the other way around. It helps us stay in tune with the current market and the carrier is the one who is selling their service and should be the one who sets the rate.

When you go into a store or a restaurant, the person selling the service or goods doesn't ask "how much you pay?", so I could never understand why that is the first thing out of a carrier's mouth when they call.

As loaders mentioned above, we have certain customers that only care about rate, we have certain customers that only care about service and we have certain customers who care about a combination of rate and service.

Just like there are good and bad carriers, there are also good and bad brokers. Weeding the bad ones out over time will only help your business.

The top carriers understand that brokers act as a sales arm for their company without having to pay the salesman salary, commission etc. They help fill their trucks when their regular customer base doesn't have freight in a particular area when they need it.

The top brokers understand that reliable carriers are integral to their business and treating them with respect and paying them fairly is a major key to running a successful brokerage.
Whenever we get a call from a carrier and the first words are "how much you pay?!" we say thanks for the call and hang up.
 
Loaders, A lot of this is stemming from a facebook group that has about 26k members that are for the most part a bunch of last year or so entrants into the carrier side that thought name your price was the way freight worked because of the silly season we had last year. They are now finding out that it is not all peaches and cream and that brokers like TQL etc are lowballing like crazy in the US and they are going nuts over it. Quite comical some of the postings rants etc as they want a total TQL ban and for TQL to go tits up. JB and CHR have been added in last week or so also. Pipe dreams for the most part but I guess TQL is aware of it and not liking it for my understanding.
please share the FB group - thanks
 
99% of the time we as a carrier get a call from a broker requesting rates we do not hear from them again.

Mind you we quote them the same rates we are already collecting from our direct customers on those lanes.
 
A lot of this "how much you pay" stems from US brokers setting their rates. Most of you Canadian brokers aren't calling on posted loads or so I hope lol but 99% of the time a US broker will tell you what they are paying on a load. So many carriers just go along with this and just ask. We personally don't do it as we are the service provider and we set our own rates, if you like them then great, and if you don't there are plenty of other carriers you can choose from.
 
All,

The Facebook group is Owner Operators No Authority/ New Authority run by WM On Time Trucking LLC about 27k members and growing daily. Been on it a couple weeks. I like the comments as a lot of them have no clue what so ever. The WM guy that started it has been in Overdrive article already this month about the ban.
 
OMFG ... Funniest thread EVER ... ROFLMFAO !!!

@loaders ... I had to look over my shoulder and see if you were standing in my office ... get out of my head ... LOL. What you said is damn near word for word what I was thinking !!!

@artmax ... I suspect your $33k reefer O/O is low for the industry, and your $55k dry van O/O is an outlier. Generally speaking though an O/O wants to be able to pay for the truck, fuel, license, insurance, maintenance, usual repairs, and put about $120k in the bank as a wage. Most of them that work for good companies can do that.

Now, I shall ascend my soap box :)

The biggest issue, as Rob suggested, is new entrants that somehow think that load brokers are responsible to these people to make sure they make a profit. Nothing could be further from the truth. A load broker is responsible to make him/herself money. If a carrier, or independent, can't figure out on their own how to make money, then what are they even doing in the business in the first place?
The answer to that question is actually easier than you think. There is nothing else they can do.
Let's be honest ... most of this group are immigrants, and God Bless them for coming here as it takes a lot of guts to leave everything you know to move to a new country, with a new climate, and a new society, and start all over again. Frankly, I am not too certain I could do it.
A surprisingly large number of them come from their home countries with either post secondary education, or trade skills. These are not dumb people. They are traditionally quite skilled in their chosen calling. However, since they cannot, by law, perform in those industries in this country, they fall back on the only things left for them to do. Drive a truck, or start farming. Unfortunately doctors, surgeons, dentists, lawyers, x-ray techs, etc., etc., etc., are generally not business minded, not entrepreneurs, and do not normally make good truck drivers let alone independent operators, and they typically do not have the financial resources to get into farming in Canada.
Can you imagine, in your home country you were a skilled heart surgeon. You took people's hearts out of their chests, cut them apart, reassembled them into a better functioning heart, and in a few days the patients walk out of your hospital, alive and well. You come to Canada and the most you are qualified to do is drive a truck working for a fellow countryman whose societal rank in your home country is slightly lower than a common criminal.
So, our heart surgeon has had enough of working for a common criminal. He saves up whatever he can and buys a used truck ... from another common criminal, but he doesn't know that ... and jumps into the trucking business. If a common criminal can do it, how hard can it be, right? And now, our story begins to spiral out of control.
The bar for getting into this industry is so low it entices almost everyone with the lure of easy money. All you have to do is buy a truck and call a load broker, right? Except it's not easy money and these unfortunate people don't get to figure that out until they are mired so far in debt that the light at the end of the tunnel is nothing more than a pin dot, if if it can be seen at all.

Like him or not, Doug Ford's idea of Blue Seal testing immigrants is a good idea. It puts skilled people where they want to be, where we need them, and has the hidden benefit of getting them out of our industry.

Adopting California's AB5 regulation will finish the job of cleaning up this trucking industry mess we have on the go today.

I'm stepping down from my soap box now :)

Discuss ...
 
Whenever we get a call from a carrier and the first words are "how much you pay?!" we say thanks for the call and hang up.
I'm the opposite, sort of ... if, in that same vein, I get a call or email from a broker that I don't know, and after all the details have been vetted, s/he says "What's your rate?" I hang up or hit the junk mail button.
You know what the load is paying. Take your fair share and pay me a fair rate. Otherwise, F*ckoff.
 
It all boils down to supply and demand, you can complain as much as you want

Last year this time around carriers were having a good time
This year this time around brokers are a having a good time

The cycle will go on
 
In the past I have asked how much you paying as it saves time. I give a quote of $500 and next thing I hear is oh no we are paying $300. So why waste time giving a rate if they say $300 and you need $500? Everyone has certain customers or Brokers they always deal with that already know how much you are going to charge. I find its the iffy ones I usually ask and then hang up on when they say $300 and oh ya its only 2 hours outside of Montreal now and appointment!
 
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We approach this question in two different ways. If we are just looking for a rate to quote a customer, we ask the carrier “what is your rate, or what do you need to go to Timbuktu”? Once we have the shipment, the question changes to, “can you do a load to Timbuktu for $XXXX?
 
99.9% of my freight is pre quoted or a lane I have moved so often I have a "set rate" in mind. Same as @loaders if I don't have a rate and it's going to Timbuktu I will call folks I think run it and get a rate. That happens maybe a handful of times a year. Whether they like my rate or not, the freight is real and I am not shopping around.
 
Exactly. When we call carriers asking for a rate, we make it abundantly clear that this is for a customer quote only, not a live, ready to go shipment. After we receive a few carrier quotes, present them to the customer, and then if we are fortunate enough to land the business, we call the same carriers back and offer them that freight at the same rates they provided. We all like to hit a “home run” and make a huge mark up on the occasional shipment, but I am just as happy making my 15%+/- on most orders with one phone call, no begging, no using questionable, unreliable providers and then simply moving on to the next one. Repeat and do it again.