Low rate = no trucks

[loaders]

We have had a real flurry of activity the last few days as the holidays approach, with customers calling looking for trucks on shipments we had quoted and were told we were too high. Once again, the low rates thrown about by some brokers and carriers as well, along with the over confident "oh yea, we can do it" attitude, has shown itself for what it really is.........empty promises. I know that the historical shortage of available trucks around the Holiday Season is partly to blame, but it reinforces my believe that promises of cheap rates does not translate into a truck being available for loading.

 

[noproblembuddy]

"Subject to availability" and reasonable notice is the key.

 

[Freight Broker]

These are good points. It is better to quote too high and not get the business than quote too low, get it, and frustrate shippers with empty promises and carriers with lowball rates.

 

[loaders]

Exactly Freight Broker! Although I wouldn't say quote too high, just quote a price that will get the job done properly with a good service carrier. We had the biggest sales day in our 20 year history yesterday and I attribute that to providing rates that correctly reflected the cost required and allowed us to hire the proper carrier at a price that was fair. The "subject to availability" notion is really applicable only to carriers. The reason shippers use brokers is to always have availability. That said, there will be days or certain lanes where there are no trucks at any price, but a brokers strength should be the ability to find trucks.
His best tool in that search is having adequate rates to offer, along with a track record of paying their bills on time.

 

[theman]

Well said, loaders.

A lot of us have some customers that just use us all the time because of the ease of doing business (as a broker) ... some use us as a back-up when their asset based carriers can't do the job ... some a mixture of the two ... it boils down to in most cases the business of your customer ... a customer whose product is commoditized is more likely to use a matrix sort of thing where they try cheapest first and move up ... someone who sells something viewed more as value aded tends to buy more value added services.

This is what seperates what a freight broker is supposed to be versus a carrier ... a carrier is a transportation services provider and some have enough size and resources to market well too ... but most don't. Brokers are transportation services marketers ... and some also have some asset based that lets them be providers too ... how effective depends on how big they are.

When there are players who don't understand their proper role, that's when the problems start.

 

[Freight Broker]

Well said...and very true about what carriers are verses the marketing function of brokers. I always quote a little high to reflect a worse case scenario.. For example...I move alot of flatbed loads out of SC into ON..the reality is that most of my Canadian trucks do not empty out in SC..they come in from as far as Atlanta or from the bottom end of FL..thus I quote to take into account a significant deadhead that may or may not occur. But by quoting it that way I make out really well when I luck out and have a truck in SC...and have enough in it when I do need to deadhead a truck 600 miles as I often do.

I have found that trying to keep on top of "market" is futile...as the market is volatile and changes from minute to minute and hour to hour... especially for things like international flatbed.. In the same week the market (on the aforementioned loads) can go from 1600.00 to 3200.00 dollars... so to ensure that we always have trucks available we can either quote high to cover the potential deadhead or we can agree to spot market the rates...but very few shippers will do that. So high it is...

Other things like LTL skid lot is different... these rates are generally very stable, and like most brokers, I quote those competitively and without the need to factor in worst case scenarios.

 

[RK in AB]

Generally speaking, when I quote freight for my customer, my rate is based on several items including deadhead as mentioned by Freight Broker. CHR or some other freight brokers who are not asset based seem to leave out deadhead miles because they look for a truck that is close and probably don't even consider the empty miles. It's when that isn't calculated in that their rate looks like a "drop-your-pants" rate. Popularity of the shipping point is important too. Chicago is a major shipping location so there will be more trucks available than say, Bugtussle, KY. If you don't understand the market, you can't effectively quote rates. I sometimes post on link looking for rates for shipments that are outside of my norm. When I get some numbers, I quote my customer with a range price and explain why. I'd rather tell my customer the rate it will take to move the freight then try and tell the carrier how much it should pay. As a "freight marketer", I need to find a balance between the 2 sides. If my customer doesn't like the rate, I tell them good luck in your search. I don't give them a number they want to hear unless it matches a number the carrier is prepared to accept.