Drivers Eliminate the middle man (Brokers)

[wargames]

One day drivers will figure out how to eliminate the middle man, the brokers. Just have to start negotiating with the customers, the customer saves, and the driver makes more money. The middle man (Brokers) are taking up a lot of the drivers wages. Its just a matter of time, and they are out.:yippee2:

 

[Freight Coach 2]

There is already a way to do this if you have the time to do so- learn how to broker your own freight. This will require hours of prospecting, phone calls, quoting shipments- only to be told your quote is to high from the shipper- and then even once you have found a customer- don't forget to keep that customer you best be providing top notch customer service and nurture marketing to ensure that your name is the name that stays on their mind for moving their freight. Many carriers are partnered with their spouses to have their spouses broker the freight. This is great if you have that authority or if you have found a firm that will enable you to operate under their broker authority.
Eliminating the middle man is great if you have another person to work with or you have extra hours in the day to handle your own prospecting and marketing. If not building a good relationship with a partnered broker is the way to go as then both parties are walking away from a load happy!

GOOD LUCK AND HAPPY TRUCKING!!!!

 

[searay]

During my season I don't use brokers. People call me to get quotes and then give me work.

 

[Freight Coach 2]

One thing you have to also consider is that the industry in general is getting more and more competitive. As more carriers begin seeking their own loads and more brokers and brokerage companies are appearing every day- this makes the industry competitive. There are several things here to remember- to find and secure the best customers - as a broker or an owner operator- marketing is needed. One call is not enough. You must utilize the skills of nurture marketing. Secondly, ensuring that when you say something you have all the facts and all the answers is extremely important. I hear it all the time that both carriers and brokers agree to one thing then charge hundreds of dollars more - why, because they did not take the time in the beginning to obtain ALL load details and facts to properly quote the shipment. As for the one that you are talking about- yes I have also done a great deal of research on many of the schools available for learning the trade and I will tell you that from what I learned is that they range from anywhere from buying the CD's for a nominal fee all the way up to paying thousands of dollars for the "class". I have talked with many that have taken the classes too- and they walked away knowing a great deal about the trucking industry and many stories of how to avoid liability what can happen in a law suit etc yet they had NO idea how to find a shipper and secure the account. Knowing the industry and regulations is great- but easy to do on your own- learning how to market you company and to utilize everything to your advantage- that is essential. I work for a broker company and I can tell you that we do not have a single broker making gross profits of over $1000 per load! On average most of our company brokers mark the loads up $100 over the rate to the truck. So for a $500 week they need to secure and move 5 loads. Often easier said than done and that is if you actually have the $100 mark up that stays because often you need to move the load and the lane has very tight capacity so you take any offer under what you quoted the customer to get it moved.

 

[drew]

I am the director of an in house brokerage for a trucking company that runs around 60 trucks and 100 trailers. A lot of owner operators do not understand that it is simply impossible to eliminate the middle man. When you take a look at the trucking industry what do you see currently? Shrinking capacity and a down economy. Shippers are under pressure to keep transportation costs minimal while still being able to find the equipment they need. This is obviously a problem. In order to keep a large pool of carriers on hand most shippers have to use some brokers to access their extensive carrier pool. Additionally, by using brokers, the shippers are able to access the broker's "buying power" in securing the most competitive rates.

The problem comes in when the shipper is using too many brokers because there is too much competition for a single shipment. Rates are pushed way below market value and when these brokers try to sell the freight to the carrier, the carrier sees them as cheap. So how does a carrier need to combat this (rather than complainint about the broker)? They need to know the market before they decide to land in it. This gives the carrier better chance of securing a fair rate and the power to negotiate. I strongly believe that a trucking company is only taken advantage of if they don't know that they are being taken advantage of.

Our trucking company relies on brokers as a last resort, however when we do need to utilize them, we pre book our orders to ensure that we have enough time to get the rate that we feel is fair. The majority of trucking companies, regardless of the size, rely on brokers because they do not have the resources to secure enough in-house customer for their backhaul capacity.

I don't know if you'll agree with me, but please take it for what you will.

~Drew

 

[KDT]

I love it, when a broker starts in on the buying and selling freight routine. Transportation is not a commidity, it is a service. I had one call me Tuedsay with a load out of GA to IN. He said they had been selling it for $950.00 @ 900 miles . Called back Wednesday told me it was still available and the price would go up later in week if not covered. He never called Friday and I happily bounced back home empty. Poor college kids fresh out of school and first job, brainwashed by brokerage companies.

 

[drew]

KDT,

I understand that transportation is not a "commodity" in the sense that it is a service. However, just like any service, there are pricing fluctuations that are caused by the market. Its simply supply and demand, just like any other market, whether it be a service or a product.

Part of the problem with companies taking cheap freight (or denying it) is the simple fact that they do not understand the market. Just like any physical good, services are bought and sold. So, I don't really understand what you are trying to say.

~Drew

 

[KDT]

Drew

The load started at $950.00 on Tuesday, if they didn't find a sucker by Thursday afternoon or Friday morning the rate would go up. Where does this extra money come from? Was it there all the time, I'd say yes. They were looking a big brokerage profit, if they could find an uninformed, scared to deadhead or couldn't afford to miss a load no matter what the rate carrier.

I know that certain areas have cheap rates because of capacity. I bite the bullet and take something sometimes if it fits my plans. Other times I bounce to a better area. But, $1.05 per wasn't good 10 years ago out of GA.

This brokerage out of Chicago hires new college grads needing a job, puts them on a salary (advance loan) for a certain period of time.Then they are put on commision only and have to pay back the set wages and try to make a paycheck also.

 

[terrylamar]

I love it, when a broker starts in on the buying and selling freight routine. Transportation is not a commidity, it is a service. I had one call me Tuedsay with a load out of GA to IN. He said they had been selling it for $950.00 @ 900 miles . Called back Wednesday told me it was still available and the price would go up later in week if not covered. He never called Friday and I happily bounced back home empty. Poor college kids fresh out of school and first job, brainwashed by brokerage companies.

You showed him!

 

[drew]

KDT,

You were right in moving on from a load that paid $1.05 out of GA. You have to understand something (and by the way I refuse to work with these types of customers)...

A lot of times, a customer will offer their freight at an incredibly low rate to multiple brokerages to see if someone can come up with a truck. The longer that the load sits, they then start increasing their price to the broker.

Obviously, this to me is an absolutley terrible way for a shipper to find trucks, but its there. BTW if need help out of GA, let me know.

 

[KDT]

Drew

Good answer. I not planning going back down there for a while ( famous last words ), lol. If I do go again, I'll pm message you.

 

[Duck]

This brokerage out of Chicago hires new college grads needing a job, puts them on a salary (advance loan) for a certain period of time.Then they are put on commision only and have to pay back the set wages and try to make a paycheck also.

Whaaaaaaaaaaaaaaaat?

 

[KDT]

Rubber Duck

That's what he told me in July, when I got on file. TQL does the same thing.

 

[MB Guru]

I love it, when a broker starts in on the buying and selling freight routine. Transportation is not a commidity, it is a service. I had one call me Tuedsay with a load out of GA to IN. He said they had been selling it for $950.00 @ 900 miles . Called back Wednesday told me it was still available and the price would go up later in week if not covered. He never called Friday and I happily bounced back home empty. Poor college kids fresh out of school and first job, brainwashed by brokerage companies.

If all Carriers were smart enough to do what you just did (refused a cheap load and prefered to go home empty) they will not be getting abused by the brokers.
I have been told once, that if all carriers take at least one day off, instead of taking a cheap load, market will be not so bad...

 

[Duck]

It would be cheaper in the long run to deadhead to a better location than to haul cheap freight.
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Cheap freight belongs on the loading dock, not on the truck.
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[terrylamar]

What is the definition of "cheap freight?" Your cheap freight may make me money. This is the free market working. I ask, how can moving somewhere at your expense, be better than moving somewhere at someone else's expense" If you wait an additional day to accept freight, now how much more do you have to make to make a profit?

 

[Duck]

That was a generalization. I should've said if EVERYONE left the cheap freight on the dock where it belongs, there won't be any more cheap freight.
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I understand that sometimes cheap freight pays for the fuel to get to a better market area but it shouldn't be that way.
View attachment 11340
Market forces can be manipulated either way. When we haul cheap freight, we provide capacity in markets where there shouldn't be. If we leave it on the dock, and nobody's willing to haul it for 80 cents a mile or whatever they're offering, the rate will go up.
View attachment 11340

 

[TNFiremedic]

We hire people with no experience and start them off on an hourly wage while in training. Once we feel they're ready, we put them on commission and give them a service area of one of our customers. If they secure their own customers and freight, we pay them a premium commission level and help them cover their customers freight. It's all about relationships. If you pay the trucks premium rates, they'll call you first.

If you lowball carriers by posting cheap on the load boards, your loads won't move. If a driver calls me, I'll flat out ask them what they need to cover their expenses and show some profit and if we have it in the load I'll give it to them. If they are slightly above what we have in it, I'll try to negotiate and tell them what we have in it and if we can make it work, we do.

The bottom line is, your customer wants their freight moved. You can always get more freight from your customer....stop trying to make a big payday on a single load and make a decent living moving 10 loads.