Finding Loads Through Brokers

Not unless it is a satellite office for a large brokerage firm. Even then, it's unlikely that they keep up with each other's freight. They are too busy.

About the best way I can answer that is to say that it's possible to work with a broker like this, but in all honesty, what you are seeking just isn't going to be a reality.

Brokers really are the bottom of the line. As a means to run a truck, revenue wise, you're not going to find consistent or decent rates when you deal with brokers. They are most suited for getting trucks back to home bases (backhauls) to get under profitable loads with prime customers.

The problem is, that under the present system, brokers will take just about whatever they want off the top, and leave the trucker with as little as they have to, to get the load moved. I have worked with a handful of brokers in my local area that offered decent rates, and it's a long and arduous process to find them. I wish there was a better way to offer advice on this particular subject, but there isn't.

Brokers are to be avoided in all but situations where it would make less sense to deadhead the truck. You're just not going to see rates offered by brokers that will lead to a healthy bottom line.

 

Im leased with a company right now but am contemplating getting my authority. So if finding loads on the load board,which is mostly posted by brokers, is not profitable than how do you stay profitable running for yourself? What other way is there to find loads? Can you deal directly with a shipper? The company pays for my permits,plates,and fuel taxes and all tolls. My insurance is cost is fairly low because they pay for the liability. If I get my own MC than I have to pay for all these myself which can add up to 10K to 12K a year. I would have to buy or lease a trailer on top of that. So is it all worth the extra money and headache to get my authority or should I just stay leased? Im hearing different things from diferent people. Not sure exactly which way to go.

 

The easiest way I can explain this, without trying to sound condescending, is to compare this to any type of business, in order to illustrate what must be in place to allow profit.

If you had enough money to build a convenience store and to stock it with merchandise, but built it in the middle of the desert, ten miles from the nearest road, your chances of success are not going to be so great. Customers will not be able to find you.

Trucking is even harder, because while you are willing to bring your services to the customer, you've got others willing to do the same thing, and they will often underbid your price to sell them the same service.

Another distinct difference from traditional types of businesses, is that you have to have your customers in place BEFORE you open for business. You'll need to sell your services, lock a contract in place, and then begin operations.

If you already own your truck, and have driven for quite sometime, then you are already aware of the costs associated per mile. You might have a figure in mind that you desire, again per mile, to insure profit.

The way I began operations was that I took advantage of an opportunity to begin working for a shipper that was dissatisfied with the carrier I was leased to. I had developed a working relationship with this customer, because I served them on a daily basis. He wondered aloud one day why I was leased to them, and why I didn't strike out on my own, and the wheels started turning. Within six months, I did exactly that very thing. One truck led to two, then three, and in that operation, I wound up with five trucks dedicated to that customer. They kept me loaded out, and this particular traffic manager had pull with other facilities that shipped product back into their plant in Atlanta, and we had our backhauls in place as well most of the time. Unfortunately, he passed away five years later, and the person who replaced him had a different agenda in mind, and he slowly cut me out of the best runs, because price was more important than service to the new guy, so we started taking west coast freight, and I got my education with dealing with brokers, lost a bundle at one point, and I decided that it wasn't worth the risk. I parted ways with the customer. It happens.

To fill the void, I leased the trucks to a couple of different carriers, in order to keep the drivers busy, and then began a new battle plan. I knew of a carrier in North Georgia that was looking to sell out, as they were nearly bankrupt, and I purchased what was left of it (by mortgaging everything I owned of value), and took over their contracts, which were good on the outbound side, but it took alot of work and most of the hair on my head to rebuild the business. I doubled the size of the fleet to 50 trucks, ran it for four years, and sold it for a profit five years ago to a friend of a friend, who ran it into the ground within two years. Too bad for him I guess.

Anyway, during the time I had the business, I branched out into several types of hauling. I contracted with a local warehousing company to haul locally, had some flatbeds under another contract that were dedicated very regionally, and had some road trucks as well, hauling for a carpet manufacturer. Brokers were used only for the road trucks, and only to get them back down here for the good stuff.

Dealing directly with the shipper is the only way to fly. Many companies either have in-house or contracted traffic managing firms (brokerage firms that contract the trucks). It's a sales process that takes time and effort. It's tough, because in most cases, your weaseling in will more than likely weasel someone else out, if you are successful.

Attempting contact by phone almost never works. You can find out the name of the person who is in charge this way, but a one-on-one meeting is about the only way to get any results. Even then, you're going to have to hit them up when they have a need for another carrier to replace one that is not doing it's job, or wait sometimes months to perhaps years, to get your foot in the door. Putting together a sales package, with rate quotes to the areas of the country you desire to serve for them, and the interests you have in serving them, is almost essential. You'll have to discover a great deal about their business and their customer base. Then you've got to convince them that you are worthy of their consideration.

Quite frankly, if you haven't got a customer base in place, it would be financial suicide to go solo. Just like any business, if you don't have some idea where your customers are coming from, and what you can expect to make, you might as well go to Vegas and roll the dice.

I hope you don't take offense to this, because I understand completely what and why you are trying to do. I was there myself. I also know from experience what can happen if you rush in too fast. Very early on after I bought my first truck, I had to file bankruptcy. When I was bankrupted on by a broker, it threw my finances into a tailspin, and I had to file again, but pulled out of that one, thanks to the bank that I have been doing business with my entire adult life.

Here's another thing to consider. Look at the fuel prices today. They are all over the charts. It would take a financial GENIUS to predict what is going to happen next week, let alone next year. The amount of operating cash that you will need to operate has nearly doubled in the past year. I'm absolutely amazed that we haven't heard of any major carriers folding up operations, or entering into chapter 11 up to THIS point and time. I still think this is coming. It's just a matter of time.

In my personal and humble opinion, I'd absolutely wait at LEAST until after the next Presidential election year, before striking out on my own.

 

Thanks for the advice,Turbo, though it does sound a little grim. With the carrier Im leased with Im taking home about 1200 to 1400k a week before
maintenance. If I want to do better on my own and cover the extra insurance,plates, and tax costs I would have to average at least 1.35 a mile for all miles. Is that realistic to achieve going through brokers? Thanks for all your info. There are a couple of shippers by my house but Im not sure if I can haul directly for them. Don't some shippers have exclusive contracts with certain carriers? What are most of the large carriers charging per mile?I was planning on getting my authority next year but not so sure if it will be worth it. Maybe Ill be better off spending my money into another business instead of buying a trailer and expensive
insurance, but I appreciate all your info.

 

You have to understand that I am two years removed from having any direct dealings with any brokers, so the rates being offered today are not something I am prepared to analyze, but my bet is, not much has changed. I'm sure they are coughing up a bit more in some areas, and in others they are holding the line because of the immense competition.

$1.35 is a bit low, in my estimation. When fuel was around 1.259, I strived to make $1.50 or better a mile. Considering that fuel prices are up 60% from that mark, I'd be looking for at least $1.80 or better, to maintain a healthy bottom line.

I can't stress enough to you that embarking on going solo with brokers is a really bad idea. For one thing, there are so many of them that are not on good financial ground, and they can fold on you like a cheap tent. Most of them will take more off the top of a load than is customary, given half a chance.

The FMCSA is trying to step back into partial regulation of brokers, because of the problems that companies have had with them, and there is legislation pending that will require them to put up bonds equal to the amounts that they have outstanding to companies, but as of yet, this is not in place. If and when this does come about, that will fix one of the bigger problems that has plagued this industry for decades.

At any rate, I'd still wait until this fuel price fluxuation shakes out and stabilizes a bit, because there are predictions that are going all over the place, and it's really anyone's guess where it will land.

If you're with a decent carrier, who offers a good fuel surcharge for all the miles you are paid for, then you're doing about as good as you can at the moment...seriously. I have no doubt that profits are down, because I sold my truck the first of this year. I was doing okay, but I knew that things were not what they should have been. I made double what I was making in the late eighties and the early nineties.

I do think that things will improve, but to make any sudden changes at this point and time, is not an adviseable idea, again in my humble opinion.