Dirty Broker Games

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beavis

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Jan 21, 2008
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Whats is with this new trend with brokers. Billing in US currency. I am a Canadian company doing business in Canada just as they are. Bill me in my home currency just as you did on my other loads. Its bad enough we need to battle high gas prices and low rates, but now we have to battle brokers who want to save a dollar to bill in US rates.

Enough is enough brokers... There is plenty of business for everyone out there, no need to be greedy and completely ruin the business.
 
I'm not even sure why anyone would bother to do that unless they were an American company. You end up losing at the bank anyway with the volatility in the exchange rates between when you invoice and when you get the cheque to the bank. It's no longer a source of margin and hasn't been that way for quite a few years, quite frankly.
 
I am not sure I understand your post beavis. Do you mean that as a carrier, you are dealing with brokers that have previously paid your invoices in Canadian funds and now want to pay the same amount in US funds for the same load?

Obviously at todays exchange rate, that would be a lesser amount. Exchange shouldn't be a factor in you determining your rates. If you need to be compensated $1000.00 CDN for a shipment, at todays rate, you need $1045.00 US. A couple of years ago it would have been $830.00 US. As far as a broker billing his customers in US $, or Euros, or whatever, shouldn't impact what you need to do your job.

Again, sorry if I didn't understand what you meant.
 
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There are only 2 reasons that make sense to cut a US chq:

1. Driver presents a receipt for a US lumper service (or similar offload labour charges).

2. Shipment is domestic US and we are paying a US carrier...

Beyond that, sounds like a shell game to me!

Keep well,

Mike
 
You are right. It's a matter of the broker being paid in US and paying you in CD now that the CD $ is strong. These are definately trying times...

But, playing devil's advocate for half a minute.

When he was paying you US $ the last few years when you were making tons of $$ on exchange, I didn't hear a post saying "I'm a Canadian carrier, pay me in CD", now did I???

LMAO
 
The only reasons to take US funds if it is a lumper or if they are a US company. And yes - they previously paid in Canadian and now with the better CDN dollar they want to pay the same OR LESS in CDN.

For example: today I was offered a shipment for $400 US, I told him we are both Canadian companies and we deal with CDN currency, we need you to revise. His reply was - "sure, I can do for $375CDN".

Also, the past few years we did not bill in US either Mr. Devil :) it's not an overnight thing for our company. We have always billed CDN with CDN companies. US companies are the exception. Exchange rates do not factor in the rates, cheap brokers who want to save a few bucks factor in the rates.

I'm surprised more people haven't heard about this. During the past few weeks I've had several companies already try to squeeze out a US rate until confronted about why the sudden change. Best part is, when you ask them why, they don't even have a response, the only thing I hear is either silence or a bunch of "uhhh uhhh can't you just let it slide this time".

It's not only brokers I've been dealing with, it's new ones as well.

Why can't we all just work happily ever after...
 
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Currencies

beavis said:
Whats is with this new trend with brokers. Billing in US currency. I am a Canadian company doing business in Canada just as they are. Bill me in my home currency just as you did on my other loads. Its bad enough we need to battle high gas prices and low rates, but now we have to battle brokers who want to save a dollar to bill in US rates.

Enough is enough brokers... There is plenty of business for everyone out there, no need to be greedy and completely ruin the business.
Click to expand...

beavis,

This is not a new trend. I, as well as many of my colleagues/competitors have had US customers who have paid in US dollars, and subsequently offered payment to carriers in US dollars for many years. If you've had a negative experience as a result of trying to deal with a broker who has offered US currency only and would not pay in Canadian money under any circumstances, that's unfortunate. If I just have to move a load that pays me in US, then I will pay in Cdn. to get it done. The difference in today's exchange rate from that of even a year ago is considerable, and I believe that overall, rates have been adjusted to reflect that, I know mine have. The largest issue that both brokers and carriers have, is how much the exchange rate changes from the time you make your agreement, and when you actually get paid. Sure, there's been some volatility in the currency markets, but nowhere near the 5% some carriers will discount their invoices to factor or opt for quick pay. If you trade currencies with a bank, your gonna get hosed. There are several good trading companies out there who make it easy and give you a far better rate than a bank. Then again, you can stick to your guns, and haul only those loads that will pay you in Cdn. $, and no one should fault you for that. OK, so now that the value of the US dollar seems to be tanking, the cost of fuel going through the roof, ever higher insurance premiums, and the HST taking a bigger bite out of everyone's (employees) pockets, isn't this a great time to be alive?
 
Just think what would happen to us if the Liberals ever get control.
 
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I can kind of understand

I can kind of understand why the broker would want to do that:

1) their customer pays in US dollars so if they match their revenue to expense in the same currency risk is reduced.

Yes, that risk is now shifted the carrier who agrees to do it because his costs are mostly in CAN$ and now his revenue is in USD.

It's a business strategy, probably not one I would undertake, but that's all it is. Why does every business decision a broker makes have to be "dirty broker games"?

You have 100% control over whether to take the load or not. If you don't like it, I suggest you say no.
 
$ us

I can understand where the comment is coming from.

I have had two load brokers send me carrier confirmations in $ U.S. over the last two weeks.
Boths of these loads were international moves , and both load brokers are canadian, speaking to a Canadian Carrier

Both these brokers used to pay in Cdn dollars until now.

Quite the insult.
 
Axl... here's the issue

Axl, I do agree with you there is a better solution.

Here's the issue.

Case 1: Their customer say pays $1000 USD and they sold the load for $900 Canadian. Now lets say the USD drops significantly and is only wort $900 Canadian. The margin evaporates.

Case 2: The customer pays $1000USD they sell the load for $900 USD, no matter what happens to exchange, they still have their margin locked in.... I get now the carrier is left holding the bag.

Here's what I do...

Case 3: Get the customer to pay $1000 Canadian sell the load for $900 Canadian and I still have predictability in my costs and the carrier gets paid in local currency.... This case the customer is left holding the bag.

In a volitile market like we have now everyone is concerned about their exchange rate risk. Someone is going to be left holding the bag and take the variance. I get you don't want it to be you, the broker doesn't want it to be them, and niether does the customer. It's all about negotiating the best deal you can to avoid your own risk.

Axl, I'm sure there is no insult intended. I commend you for recognizing that this is a bad deal for you.

I still have some customers who pay in USD and I sell the load in CAN dollars. To put it in perspective, in the month of March 50% of my bottom line evaporated due to exchange! It's a huge problem. It's all about how you manage it.
 
This is really a non issue. What broker and what carrier would be dumb enough NOT to discuss which currency right from the outset? There should thus be no surprises on the back end when bills come in and payments are due.
 
I agree with Freight Broker, very simple transaction. State what your paying over the phone and fax the amount in the currency discussed. Simple, Clear, and no problems at the end.
 
Pablo and others

Yes there is an issue.

Why would I even venture into a discussion about currency when I am talking to a broker out of Ontario about a load back into Canada from the USA?

The way to solve it is to ask to have the contract re faxed in CDN.
 
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There are really only three instances where USD comes in to play, dealing with a US carrier for cross border (rare), lumper charges (occasional) and domestic US shipments...

This is not rocket science.

I find it hard to believe that a company that 'usually' does business in Canadian funds all of a sudden starts sending over confirmations in USD. It's certainly either a mistake or unethical. If it's a mistake they will fix it, if they are trying to take 5% of the little margin anyone makes I'd question working with them further.

Keep well,

Mike
 
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I'm a Canadian broker who deals with US shippers who pay me in US dollars... I therefore like to pay my carriers in US dollars also... no one I've met has had a problem with that, but I always discuss it with my carriers up front so that the currency doesn't come up as a surprise issue later on.

Your point about a broker who changes the currency without prior discussion is well taken. That is wrong. Any changes should be discussed beforehand.
 
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