A day in the life of a freight broker..........
For everyone here that is wondering why freight brokers exist and what kind of service they provide to the industry, I hope that this sheds some light on it for you.
5:15 am - Open up the office. Turn on the lights, the coffee pot (in dire need of a 2nd cup), the computer and get the flag put out. Next decipher all the phone messages left overnight from drivers who can't speak clear English
5:30 am - Make 30 cold calls to the east coast. Earlier is better because people start getting busy around 9:00 am local time. Cold calling evolves dialing a phone number for a company and trying to speak with a person who is evolved with shipping things. Seems simple right? Can't be too hard? Well, these people are generally well protected by receptionists and other "gate keepers" or the automated systems screening calls for those people. When you do get through they are not typically very interested in "shooting the breeze". You have about 30 seconds to introduce yourself, find out if they are the person you want to talk to (or who that is), and convince them that it is not a waste of their time to talk to you. If you can achieve that, well done. You know have a qualified customer and can start to ask them for freight. That happens about on about 5% of the calls you make. The rest you leave a voice mail, get hung up on, or otherwise fail to "dig up" a new customer. You have to be nice, funny, direct, articulate, personable, professional, relaxed and quick. Every time. They get to be rude, short, insulting and otherwise not very fun to speak with at will.
6:30 am - Reply to emails, check progress on loads in route, post new loads. We post on 3 different boards, so organization of information is very important. Loads must be kept current and updated daily. Rates have to be estimated for mileage or weight and adjusted for current fuel prices and specific load details. If a load needs tarps or has more than one origin/destination the carrier will want extra. Take the estimate and post that amount. Then try to sell the customer on that rate. Any Purchasing or Shipping Manager worth their $80,000 per year salary went out in the past 12 months and locked in contracts with CH Robinson, DHL, FedEx Freight and other large "Walmart" style carriers (See, we brokers can shoot back too) for ridiculous $1.20-$1.50 per mile flat rates with 24 hour pick up guarantees. They can afford to lose money on some stuff to keep the bills getting paid and be available for that big dollar load when it comes up to make the profit. That leaves nothing for us brokers to live on, so you might as well not even waste your time on those loads.
6:35 am - Make 30 warm calls to the east coast. This generally evolves calling up people you have formally "Qualified" and asking them if they have any loads they are working on, or calling up a company that you really think has loads and trying in vane to reach a decision maker. Again, about 5% of your calls will result in good conversations, about 5% of those will have loads to post. You have to be very effective in your record keeping for these calls. It is important to document who, when, what and then set a reminder for another call in the future. All this takes time. 95% of our sales come from the 6th contact or later. That is right around 4 months of BS schmoozing before we even make a dime. Even then we get put onto a list of 16 other brokers, agents, and O/O who see and likely post the exact same load or book it carrier direct.
7:30 am - 2:30 pm - Repeat this process for all time zones while also attempting to "book" loads. What does it take to actually book a load? Great question. About 300 phone calls is the short answer.
4:30 pm - 9:30 pm - Mine for prospects. This requires hours of mindless Google searches and excel spreadsheets. Copy and paste name, phone number, and address over and over. Tedious and time consuming. My faience hates this part most of all because I'm completely oblivious to her while I'm working. "There but not there" is what she says. I need 120 new phone numbers every day I tell her.
After actually succeeding in getting onto the contact list of the person responsible for making decisions for a company that is wiling to pay going rates for their shipments (and can afford to pay their bills), you get to play the rate game.
First you have to wrestle as much information as you can from someone who really does not have the answers you need. Once you get the information you can post the load. We do this three times. Then negotiating with the customer for a rate, because they will very rarely give you one upfront unless it's super cheep. So you banter with the customer getting as much for the driver at the best profit as possible to keep you manager happy while still keeping your rates lower than the other 6 guys also quoting this load. Then you get to find a reputable carrier that will keep their commitments to you so you don't cause your customer to lose a customer because of a botched load. There are a million little things that can cause you to disappoint and therefor lose a customer. You get what you pay for is what I tell my customers. They tell me it's my problem. Better post with good money too, don't want to get a bad reputation with carriers of only having cheep freight.
Rates have to be estimated for mileage or weight and adjusted for current fuel prices and specific load details. If a load needs tarps or has more than one origin/destination the carrier will want extra. Take the estimate and post that amount. Then try to sell the customer on that rate. Any Purchasing or Shipping Manager worth their $80,000 per year salary went out in the past 12 months and locked in contracts with CH Robinson, DHL, FedEx Freight and other large "Walmart" style carriers (See, we brokers can shoot back too) for ridiculous $1.20-$1.50 per mile flat rates with 24 hour pick up guarantees. They can afford to lose money on some stuff to keep the bills getting paid and be available for that big dollar load when it comes up to make the profit. That leaves nothing for us brokers to live on, so you might as well not even waste your time on those loads.
All of that so that carriers can easily look up loads online, make 5-10 phone calls, and be able to go do your job. I think it's pretty cool that you can plan out a trip that will make a good weeks pay on with out too much trouble. What a world we live in! That is the service we provide in conjunction with the load boards. All the leg work required to make your lives a little easier. Without us there would be no loads posted, or companies with freight would have to pay an employee and the costs associated with being able to post loads. Hence we provide a service to both shippers and carriers. Otherwise we would not exist.
Exist, that is about all most of us brokers do. We split our profit with the company that backs us. That way our carriers get paid within 25 days of getting paperwork turned in, and I never have to make a collections call to a customer that is slow to pay. So if there's 10% mark up on a load we get 5% and the company/local owner splits 5%. $50 on a $1000 load in my pocket for the government to steal from and to feed my family on. If I happen to land on that golden goose who drops nothing but $3/mile loads six times a week for 3000 miles each, then I'm the luckiest SOB in the world for a while and the carrier will reap the reward as well. I like 10-20% of $9000 a lot better than 100% of nothing which is what I usually get. No net hanging below me here. 100% commission based 1099 contractor with out benefits just like you O/O out there, but with out the equipment payments. That is why you guys get the big bucks and I only win if I do a ton of volume. Which takes years and years to build and lots of time to maintain, just like your equipment.
If you want the $2-3 per mile loads, you need to do my job as well as yours. It can be done, epically if your good at speaking with people and doing paperwork. Otherwise you pay me a little bit to take care of that for you so you can do more driving. Having your wife do it for you is a great way to keep that for yourself. We preform the same role as a distributor does in the retail world. The car dealer gets so much per car because the manufacturer does not want to spend the money to deal with individual car buyers. We market your trucks at your rates for as much profit as we can get. You could do it too, but like JJ said there are costs that come along with it, and the calls are not as easy as they sound. Try making 10 cold calls some time, see how it goes for you.
All this said, the bad apple analogy applies for all aspects of the industry. Until we all unite together customer, broker/agent, carrier, and supporting industries and help each other rather then each of us just trying to "get ours" we will all be at the mercy of those rotten SOB's. Find several brokers with decent rates and lanes you can link together to be where you want to be when you want to be there. Stay loyal to those guys and don't hose them when a better rate comes along. My best loads are never posted, they go right to my most reliable carriers within 2-3 phone calls. I give as good as I get, and donate 10% to charity when ever I hit the jackpot. That's just my opinion, I could be wrong. My conscience is clean and I sleep well though.
