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... brother in law..I try to steeer clear of him as he is a nut.. and I don't think its him as it wouldn't be small fire.
Royal Traffic
- Thread starter WALTERK
- Start date
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No.. he's my brother in law.. (i.e not from my gene pool).. He does weird stuff to get even when he knows that getting paid isn't likely to happen. Personally I don't agree with it.. not worth spending time in the Big House or getting a criminal record. He shouldn't have let it go to 30K to begin with.
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He's a one truck o/o.. numbered Ontario co. He hasn't even named it. Guys like him are sitting ducks for shady shippers and brokers who figure they can take advantage of someone with bad English, not much education, and an old straight truck. Even though he's not the sharpest knife in the drawer, it pisses me off to see him get used and abused like this.
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I remember taking loads from them years and years ago when I ran trucks. They were one of very few woman-run freight businesses out there at the time. They were always known as 'low and slow' but always paid. It's a shame ... and I think a lot of brokers are in bad situations, actually.
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Likely due to the large number of slow paying shippers. if all shippers paid within 30 days there would be nothing to this business. Instead one really has to be careful, and even then bad luck can strike, and you're out.
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The transport industry "norm" for receiving payments is at 70 days. Net 30 extended to your customers has really gone by the wayside. That statistic is according to Canadian banks and other lending institutions as well as credit/collection analytical data.
I read that close to a year ago now. It may have fluctuated a bit since then. Still...not good news....
I read that close to a year ago now. It may have fluctuated a bit since then. Still...not good news....
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It's about how we approach the business. Too often we do sales holding our hat in our hands.. I've been guilty of that myself. Instead of begging for business one should qualify prospects to determine if they're worthy of our and our carriers' efforts. When I started out I tried to sell myself to any shipper who would give me two minutes of his time.. now I qualify them first to make sure they are worth the time and effort. Alot of times they're not.. 70 days would not work for me or my carriers.
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Anybody that we deal with on a regular basis and state they are 60 days, we just add the 2% into the pricing from the get go. I have no problem telling them that we do it and if they do not like it then they do not have to do business with us. Our collections avg 42 days, we are trying to get that down but it is tough, for interest sake our payables avg 31 days you have to pay to play.
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The problem is that the freight brokerage has become too saturated because so many companies who are 'service providers' ie trucking companies have gone and started logistics divisions. The amount of business growth to be had out there means that there is thinner and thinner slices of pie around, and the expectations of growth from these companies is not in reality with what is going on in the market. Also, the industry has become more about information flow and becoming a clearing house for shippers to work with the smaller carriers out there. That takes a BIG investment in IT. So companies like CHR, XPO, and the like with big money behind them benefit ... and they tend to make a lot of their profit on the quick-pay discounts they offer customers.
The small shippers where one can expect sales of $50K or less annually aren't worth chasing because the amount of time one has to spend marketing towards them and to maintain them makes it hard for a salesperson to make a living. To make good money, we really need to chase the big ones primarily, and the small businesses we deal with are ancillary to that ... usually through vertical integration or referral.
The shippers out there that will let you in the door quickly are measuring one broker against the other on every transaction ... ends up being too low a margin for too much time invested.
It is becoming quite a precarious situation for brokerages out there with sales in the $5-$20M range in particular because the growth isn't happening, mostly because the service isn't differentiated in the marketplace and the resources aren't there to be a real IT solution for larger customers, even if the financial resources are there to pay the carriers in 30, and get paid 50-70 (and I concur, this is what has become normal).
This is why Wheels sold out to Radiant, Lakeside and Torus to Transplace ... you get the idea. I would venture to say that every mid-size broker out there is either for sale, or looking for strategic alliances/mergers to grow. Pure organic growth on the strength of cold calling customers and building relationships is a slow process that requires a real investment of time and money into the right sales force, and the industry has no appetite for it.
I agree with most of what you have posted "theman" you make a number of good points. Organic growth is a much slower process than it used to be. It is true, most carriers have their 3pl divisions and they should have. Carriers are now exposed to the same third party pressures we 3pls are. Another major force we are dealing with is the U.S. 3pl's used to view cross-border business as a nuisance and now are invested heavily on international business and doing a great job for the most part with their technology and deep pockets. Our focus as a small 3pl is to provide great service to the small to medium size customers while maintaining great relationships with our carriers. We converted over to EFT last year and we pay on-time which carriers really appreciate.
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Technology is great but can also lead to problems. Back in the day (before the Internet and load posting) a broker had to understand the carrier landscape.. who serviced what areas? How many trucks? Whay type of equipment? etc. A good broker had that information at his/her fingertips, and when a load came up that broker already had a carrier in mind for it. Now, it almost seems like everyone posts and hopes for the best.. even if you have an idea about who can handle the load, post it anyway. Brokers went from having 50 reliable carrier partners to claiming to have 80 thousand carrier partners, and the "one call does it all" mindset was born. Customers used to hire us for our expertise in understanding freight and carriers.. now the gig is up.. they see us take their loads and post them, and hope that someone calls.
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I agree freight broker. I also think that most of the brokers that were around in those "old days" still have their 50 or so, go to carriers for the bulk of their business. We use Link and other load boards, but not as the automatic first move, and only after we have reached out to those partners we feel are best suited to each particular shipment. Unfortunately I believe there are some players in our business that use the load boards to find the cheapest carrier, not necessarily the most competent. It is hard to develop and to maintain good carrier relationships, if every load you have gets thrown onto the loadboard for every Tom, Dick and Harry to bid on. Apologies to all of my good carrier partners who names are Tom, Dick and Harry, you are not the ones I am referring to!
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Yup ... we are no longer looked as the experts of simply matching truck to freight because it got too saturated. There has to be something else to it, like running brokerage as an augmentation to asset base, IT solution, multimodal etc. I find it takes too long to develop any kind of customer that is not just shopping price on every load. For those types of customers, it is impossible to make a living. For the good customers, expect a sales cycle of minimum 6 months but usually longer and that is IF you have something compelling to offer.
The customers who are OK with the freight being handled by brokers only want to wash their hands of liability inasfar as not knowing who they are dealing with, so as long as the broker has the right protection they just indemnify themselves from anything that could go wrong in regards to a negligent carrier actually hauling the freight. But most big shippers will want their core lanes handled by asset based carriers, and let the secondary runs move with either their asset based carriers who want it or their preferred brokers. Those customers prefer the big brokers because they know the resources are there.
The whole boutique approach to freight brokering is fine if you have the legacy business that you are carrying, but to acquire this kind of business now ... very difficult and time consuming, and nobody in the industry is really patient enough to make it work.
The customers who are OK with the freight being handled by brokers only want to wash their hands of liability inasfar as not knowing who they are dealing with, so as long as the broker has the right protection they just indemnify themselves from anything that could go wrong in regards to a negligent carrier actually hauling the freight. But most big shippers will want their core lanes handled by asset based carriers, and let the secondary runs move with either their asset based carriers who want it or their preferred brokers. Those customers prefer the big brokers because they know the resources are there.
The whole boutique approach to freight brokering is fine if you have the legacy business that you are carrying, but to acquire this kind of business now ... very difficult and time consuming, and nobody in the industry is really patient enough to make it work.
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Often its more about the customer and the technology they use than about the broker/carrier. For example.. I get emails from shippers who provide zero details other than origin and destination. And at the other extreme I have customers who tender their loads in real time, show ALL load details. The second type of customer is relatively easy to service while the first is difficult and next to impossible.. i.e. :NEED HELP with Indianapolis, IN to Sherbrooke, QC.. CALL IF YOU HAVE A TRUCK". .. a complete waste of time.
Personally I don't worry about sales cycles and customer size.. I make my call quota every day and whatever happens happens. I have no way of knowing who is good to deal with and who needs help until I make the call. Over the years I've had some surprises:.. Yes, you CAN call huge companies and get their business on the phone. And sometimes the little home based shippers (i.e. steel and lumber traders) have ALOT of freight to move. Often it ain't what it seems.. My biggest lane is GA to TN.. I move dozens of loads in that lane every week, me being a small Canadian broker.. unlikely but true. I also haven't had much luck with freight around here for some reason. Yet logic would suggest that I focus on shippers in my own neighbourhood..no point in overanalyzing things as the unlikely very often comes to pass while what makes sense doesn't work at all!
Personally I don't worry about sales cycles and customer size.. I make my call quota every day and whatever happens happens. I have no way of knowing who is good to deal with and who needs help until I make the call. Over the years I've had some surprises:.. Yes, you CAN call huge companies and get their business on the phone. And sometimes the little home based shippers (i.e. steel and lumber traders) have ALOT of freight to move. Often it ain't what it seems.. My biggest lane is GA to TN.. I move dozens of loads in that lane every week, me being a small Canadian broker.. unlikely but true. I also haven't had much luck with freight around here for some reason. Yet logic would suggest that I focus on shippers in my own neighbourhood..no point in overanalyzing things as the unlikely very often comes to pass while what makes sense doesn't work at all!
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I've always been more of a contract guy vs transactional so it's a different process. I personally don't love dealing with traders of commodities either.
Agree about local business. I always found that it was easier to sell businesses outside of our neighborhood sort of speak as a niche solution.
Agree about local business. I always found that it was easier to sell businesses outside of our neighborhood sort of speak as a niche solution.
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