So you want to "own " your own company

The broker would not be leased to the carrier. He would be acting as an agent of the carrier. In order to be leased he would have to bring certain equipment. He might also have other carriers for whom he acts as an agent. As I stated earlier, the relationship would change to something similar to that of a manufacturers representative. The broker would not be an employee of the carrier, but an independent contractor. Unless a carrier has a lot of equipment they would not be able to keep the broker busy. The broker would need to have several smaller carriers or one or more mid sized carriers for whom they are booking loads in order to earn a decent living. If carriers are large enough they might need to have several brokers and assign territories, just as they might with a manufacturers rep.

 

I think you are missing my point. "IF" the confirmation sheet(s) or the signed contract between carrier and broker states that the broker is acting as an "AGENT" of the carrier; instead of writting a new free standing law, why not insert language to cover this relationship into Part 397. The language could stipulate WHO is responsible for paying the broker. Not how or how much. That would be left to the interested parties to decide.

However, if the broker is not an acting agent of the carrier, then the free market should prevail.

 

Not meaning to advertise, but that is why we set our dispatch company as a low flat rate. My husband was OTR on and off the last 14 years, the off part was while he was in Iraq and Afghanistan.. We understand the costs of doing business and the ridiculous percentages that are already taken out of the line haul.

…Returning to the current discussion, our job is dealing with brokers all day long, constantly, as we are booking loads for multiple clients. I believe in a free market system but there has to be some disclosure regarding the brokers cut... I see several times a day where a shipper has asked multiple brokers to locate a carrier and the rate that the brokers are offering vary across the board. For example, one broker will offer me .80/mile (which of course I refuse) The next will be offering 1.40/mile.

It makes me very angry to see such low amounts being offered when I know for a fact the shipper is paying double to triple that amount to have their product moved. What is worse is many of the owner/operators out there that are new or do not speak the best of English take these loads not knowing better and mess it up for everyone else.

The problem I continually see, in which I do feel regulation of some sort is needed is the fact that the brokers seem to have free run of what they are taking from the load and I feel this is completely unacceptable as the owner of the truck is the one dealing with all the expenses and risk. It is extremely tough as it is for an O/O to make a profit large enough to grow their business without having to rely on getting stuck with leasing on to one of this large, small business eating companies full time.

 

With one of the bigger agent based O/O companies, I have seen the same load listed with two or three different agents, with there being a difference of several hundreds of dollars in the pay.

 

You could probably add something to existing regulations. I am not sure that it would be appropriate to add it to leasing regulations since there is nothing that I can recall which specifically addresses the carrier/broker relationship. I believe that 397 has to do with hazardous materials. In any case, the free market would still prevail in that rates that carriers pay to brokers would be controlled by the market. Brokers would be free to negotiate the rate that a carrier would be willing to pay.

 

It sounds like you are leased to Landstar. I experienced the same thing when I was lease to them many years ago.

 

I ment Part 376, which are the DOT Leasing Regulations. Silly me!

 

No problem. As I think that I have stated, the broker carrier relationship doesn't not involve leasing. Neither the carrier or broker is leased to the other. There are likely some carriers who do lease to a broker and run under their authority, but the broker/carrier relationship is more of that of an independent contractor and a manufacturers representative. I think for that reason it should be covered under different guidelines and separate legislation. To tell you the truth, I don't care how they do it as long as it can be well defined and simple.

One consideration with the broker acting as the agent of the carrier is that the shipper then becomes the customer of the carrier rather than the customer of the broker. That would negate any compensation that should be paid to the broker by the carrier who solicits business directly from the shipper. In fact, I think that the current broker contracts could be challenged if the carrier solicited business from a shipper that was first introduced to them by the broker since the broker is acting as an agent of the carrier. Personally, I think that it would be much better to have a well defined agreement between one or more brokers and carriers. I usually make changes in most broker contracts that I receive from a broker. I NEVER sign a contract that is all one sided. If the broker doesn't want to go along with my changes, then I don't do business with them. Many carriers, especially the smaller ones, don't think that they can alter a contract sent by a broker. I doubt that most of them even read the contract. It is foolish to not read and fully understand any contract that you are sent. If there is something in the contract that you don't agree with then it is up to you to either change the language or pass on doing business with that broker.

For instance, I NEVER sign a contract which has language that would charge me a fine for being late on a pick up or delivery. While I have an excellent service record, anything can happen. Equipment can breakdown or the weather can be a factor. I have had brokers tell me that don't worry about it. But, if it is written in an agreement and you sign it, then it will hold up in a court of law. I always mark through and initial any language that would fine me for any reason. I do the same thing with anything else that is in the contract that I don't agree. I may also add a few things of my own to insure my interests.

One reason we hear so much about brokers is that we have a lot of people who are owner operators and/or carriers who are not businessmen. You don't have to do business with those whom you think are ripping you off. You are free to find your own shippers and set your own rates.

While many complain about the brokers, it is really the carriers and owner operators who are to blame for most of the low rates. This is a supply and demand industry. Rates will rise until someone takes the load. When someone takes a load they establish the rate. It is really the carrier's who make a rate, not the broker.

 

It doesn't do any good to mark up a contract unless the broker initials it and faxes it back.

 

Those are great business practices. An o/o should always negotiate with his/her best interest in mind. And I completely agree that it is ultimately the carriers, i.e. o/o, that set the rates. The biggest problem with that issue is the o/o's who don't know their true cost of running their business. Just because they have no truck payment they are willing to dismiss that cost. Which can drive down the rate and adversely affect everyone else that does have a payment.