A question for Brokers from an Independent

Well just a small input that I have which I'm not a broker I'm a small fleet owner with my own authority that hauls for some customers direct that do use brokers from time to time is the rates have been fairly consistent even with the drop in fuel. The brokers rates are close to the same they've always been they just seek out the truck that wants the load and cut his pants off. If they can't find him or her right away they sit on the load till the shipper breaths down their neck and magically the rate comes up. It's a bad cycle we seem to be entering

 

I barely started my own brokerage. Have my own trucks on the runs, and I post loads. Believe it or not carriers are willing to take whatever to move the trucks. It's sad.

 

Someone just needs to develope software that handles the majority of a brokers job, that drivers cab use to select loads and bypass brokers. The things that brokers were actually needed for can be handled on the shippers end with a couple hourly paid employees and an occasional lawyer. The software will show is what the shipper pays, aND we just contact the person they've hired to handle drivers. It will save everyone money all the way down to the consumer. Brokers live beyond their means like most people, but have escaped the associated risks too long. It's bad for everyone, and spiritually, is bad for them most of all. A new design is in order to keep things running smoothly. No more finagling numbers, just honest people who know what they are paying for, and working for.

 

GOOD LUCK DOING SALES!!!!

 

Many brokers are experiencing the same problems as carriers right now... we are extended crappy rates during these times too, so a lot of the comments about most brokers making $100K + and making tons of money right now are false. I am a broker and I know plenty of others.. this time of year (especially this year) is bad for everyone. I'm sure there are some brokers who are raking it in right now, but that boils down to their shippers not fighting for competitive rates and overpaying the broker, and I can tell you that most shippers are fighting for low rates, regardless of who the freight is going to. It's a struggle to break even a lot of the time lately.

A lot of big shippers are giving lower rates to brokers than they are to the larger carriers even.. they know that the smaller operations will still go through brokers because they would otherwise have no access to that freight, and they know its in high demand.

 

The Problem here is none of what you say as a Broker can be proven. The carrier has no formal insight on the direct freight lanes you offer. Therefore most carriers have to take you at face value.. It's become a slippery slope when Carriers are offered ratse below their Operating cost (No one wants to fail, So they take this approach= lets just run this one load below cost or at Break-even and see what the Next load has to offer). This is a Bad business Model for the carrier and $$$$$$$ for the Brokerage..

Just look around the country, Not one single lane is deemed profitable to a majority of the independent carriers involved.. Most of the successful carriers are running direct, barely using brokers.Lane which used to pay good going in, No longer offer great rates, Florida, TX, Northeast all have leveled to the point you go in Cheap and come out cheaper..

With that said, Something needs to be tweaked, Carriers aren't out here trying to break the bank, Most just want to survive to pay their cost and Enjoy a little family time stress free.. It's truly become a dog fight for freight, But it doesn't have to drive the hard working Individuals out of business..

It my humble opinion that this industry lacks Ethics on both sides of the fence (Brokers & Carriers). The Brokers main concern is to service the Shippers at any cost, therefore leaving the Carriers High and dry.. Feeding one peanuts and telling them to make a full course meal is not the way to long term Benefits..Its just not plausible. Each sector needs the other, But it seems that 2/3, are always in a good position while the third is always trying to play catch up..

For every Great success story as a carrier, you have hundreds who've failed. Most of them sacrificing their lives and marriages to be successful in this industry. A industry that's currently set-up for you to fall and fall hard..

I'm not here to bash Brokers, because all brokers aren't bad. None the less they're all doing better than Most carriers.. The System as we currently see it needs to be updated.. Most People on the positive side of this won't agree, and they're entitled to feel this way because they beat the system. But as it stands right now it definitely need tweaking..

One last thing. What baffles me the most is the Supply and Demand theory. One would think at some point things would Level out and rates could be consistent across the board. But it never does. It either high capacity and low demand or high Demand and low capacity.. I would assume it works in the shippers favor to keep as many truck on the road as possible therefore keeping Capacity high enough to keep rates Steady, But when you Spoon feed carriers, eventually they're forced to shut down operation. This sort of thinking ends up turning the market in favor of the carriers.. (FYI)

 

Here are my thoughts on this subject:

Rates change based on the season. So if there is fruit in CA, they want to go there to get that high paying freight when it happens, driving down the rates. The same applies on a year round basis to Flat Bed guys when a broker needs someone to go to FL. It is the opposite of desirable, so it jacks the rate up. The reason why brokers will be needed is because we are paid on finding that guy who wants to go to FL, or to lower a shippers rate when CA pops.

The rates change on a weekly basis too. I work with a shipper who wants trucks to pick up at 7 am... in the middle of no where. The rate can change from 2 plus a mile on a Monday morning, to nearly half that from a Monday to a Tuesday because of what they want/need.

To bring this to a point, brokers are tapped into the market in ways carriers and shippers are not because a single carrier cannot satisfy the needs of a shipper. This works vis versa too.

Since your name implies you work with RGN freight, you might be upset that rates are not what they used to be, and this is true. Freight brokers have lowered your rates to where you can no longer make the money you used to. I think this is because of the price you used to charge because it was unsustainable for the shipper. They needed to cut costs and found that it can be done with multiple brokers bidding on the freight, which helped lower their costs while maintaining service. That statement might not always hold true, but it holds true enough that they wouldn't stop.

 

I don't buy your theory of RGN rates being possibly unsustainable. I think GREED has more to do with it than anything. All segments are down. Guys who always do legal flatbed loads might look at a $5 a mile RGN load and think "that's awesome" when in reality it's a LOSER. Then you have regular freight broker perhaps looking to crack into a new segment. Can you imagine some guy who has been pushing cheap freight onto regular flats and vans for 3 or 4 years what they think when they see a load that pays $40,000 going 1,000 miles. That guy thinks he can get it done for a lot less and skim BIG money. Then those loads end up wedged under a bridge. How's that for sustainability? I think brokers and shippers/receiver's alike need to be held accountable when a bridge gets destroyed, same as the truck will be in that scenario. Did they do their due diligence?

 

In our experience, with flat bed, there are too many loads and not enough trucks. This is because rates are quoted by the "Top 10" Super Brokers at too low of a rate for the freight to move. The system is clogged with cheap freight offers on both sides.

Small brokers are fighting the Super Brokers in fierce competition just the same as small carriers are fighting large carriers for profitable freight.

It's costly thinking to a carrier's business growth to lump all brokers together for the bad behavior by some, or the rates offered by the Super Brokers. Our best paying loads never touch the load boards. The same can be said that it is very narrow thinking by a broker to lump all carriers as poor operators, just for the behavior of a few.