Question for Brokers " What do brokers consider a fair rate per mile for freight?"

Maybe a lot of the ones that seem to have all the answers should just become Brokers and teach the rest of us how to do it and still make a living! It amazes me that so many people think that as a Broker we have no expenses!

 

Sorry Shade Tree,
I didn't intend to step on your toes, and yes, I recognized myself in your post.

As I stated in one of my first posts, I'm trying to understand this symbiotic relationship with S/B & O/O's.

Other than food brokers and commodity brokers, I don't know of any industry that pays a commission of >10%. I come from a long line of salesmen from different industries (construction, automotive, chemicals, pharmaceuticals,and real estate), and since I've been in the truck with my DH, I've wanted to learn how this industry works so we can develop goals for our future.

The brokers I've met make a couple deals a day and call it good. They are taking 15-25% of the dollars paid for the load, by the shipper. They live in beautiful homes and take European vacations. I don't resent that, I just believe in the myth that all boats should rise to the same level. But the boats will not be the same. Depending on where one lies in the food chain of life, some will be canoes, sailboats, catamarans, and some boats will be yachts. Such is life.

If you think 10% or 5% is not enough for you to bother, then would you take the time to pass along knowledge I'm trying to acquire? What are your top 3 biggest expenses?

O/O's have Fuel, Insurance, Maintenance. They generally do not make enough to have a nice balance in their 401K, they don't have a BMW sitting at home in the driveway, they may get to Europe once in their life but NOT every year, and their wives do not wear Prada.

Many of them are struggling to keep their heads above water (hence, the boat analogy in previous paragraph). I am not a flame thrower, and I thought another broker who was only taking $50 per load, was undercutting and devaluing the work they do.

I could have ignored you, but then how would I learn, huh?
PM me if you don't want to give your response publicly.

Thank you for listening.

 

Europe no I've never been there, Big House nope I live in a Doublewide Trailer on a couple of acres in the middle of nowhere,BMW don't have one of those either, Prada you are asking at the wrong house we are blue jeans and t-shirts folks! Profit is not a bad thing when you are in business and as I said before I keep my range between 11% and 14% most of the time closer to the 11% and if the TRuck can not afford to haul it for what the poad is paying they can move on to the next load! Please don't take that as me being vile or hateful its just that we are all in business to make a profit and if this was such an easy business to get rich in then everyone would be doing it! I am still a new Broker having just officially gotten my Authority in December of 2013 I did do some part time Agent work for another Broker off and on for a couple of years prior to that though!

You talked about the O/O's that are struggling to keep their heads above the water and that is a subject that I understand very well so am I, in todays economy you have to be very dilligent in your business affairs and if you get to the point that you just can't make it any longer then you have to swallow your pride and park the truck or close your business and go to work for someone else that has a better grip on their own business!

Rates, rates are just that rates not every shipper out there pays the 3 to 5 bucks a mile that so many Drivers like to think they do yeah there are a few of the specialty outfits that pay really well but on average they stay within a fewcents of the Margins on ITS.com! In my previous post I stated that I took 30 cents off the top and some people were just appalled that I would have the audacity to do such a thing to the poor old truck driver! However I could have let him load it for the less than 2 bucks a mile that he offered to move it for but I gave him quite a bit more than he was asking for because I had it to give so I did and if that makes me a bad broker or whatever term the members here want to use so be it!

Expenses, yeah I have some of those to no I am not having to buy the 4.25 a gallon fuel nor am I having to keep up with all the maintenance on them anymore either, I used to have 5 of my own Iknow a little about Trucks! My Expenses lets see I have to maintain a Bond, Cargo Insurance, Liability Insurance, the usual office expenses for electric, phone, internet, cell phone and of course I have a part time office assistant plus a full time Bookkeeper! so yes I have some expenses every month if I make anything or not the bills still have to be paid. Oh and we will not even mention the 50 Grand that I put into this office to make it suitable to operate out of!

The poster who made the comment about me having to dig really deep into my pockets to load his truck if he catchs me in a bind, Sir I promise to never allow you to catch me in a bind! I hear from your type of Operator every day that sure wants to beleive that we are keeping upwards of 2 dollars a mile off the rate before we even offer it to the Truck. I am sure in as many years as you have been out there on the road you have dealt with more that your fair share of bad brokers and I can say I know a little about them my self. However I strive to not be that kind of a broker if I have more in the rate to give I give it but as I said before the rates just arent what we would all like them to be! Furthermore I would be willing to bet that there are very few other Brokers out there that will be nearly as honest as what I am!


I hope that I have provided an answer to your questions! Have a great day and be safe out there I would rather be out there with you than to be confined like this! I would not wish this stuff on anyone!

 

I don't believe you're keeping $2 a mile I know you'd have to lose money on it in a pinch. I don't like doing that to small brokers such as yourself but I get my thrills making CHR or TQL pay $4 a mile on a load of roll stock going 400 miles. No it isn't often they do that but in a crunch they will. It's one of thousands of loads they'll do with that customer over the course of a year. They win on most of them but when a receiver comes up short and capacity is in a crunch they will dig in those pockets however much it takes on that one load. It might be 1 in a 100 or 1 in a 1,000 I couldn't say. I can say I've hauled a bunch of loads like that over the years and it does happen. Enough to where I just charge everyone rates like that. On most of the better specialty freight I haul they expect to pay rates like that anyways so it's business as usual.

 

you are the MAN,rollin coal.I like the moral of the story.They are not Gods,they need to come back on the earth,on real world.

 

I don't think that's true. I think they get 10% PLUS A SALARY.

6-7 percent of how much?

If they make more than 10% it's most likely because they have a network of carriers on their call list that can move the load without incurring alot of dead miles. Example; if a broker has a load originating in Denver and delivering in Detroit, the broker would not call me because he knows I have no freight delivering in Denver or picking up in Detroit. If he has a carrier like that in his roll-a-dex then he will get that carrier to move that load for a low rate. Dead miles = high rates = low commissions.

Nah. Just think about that for a minute. What incentive would the broker have to move a cheap load? Answer = none. Rates would go up for the shipper and we would be in recession.

Not usually.

If no brokers can get the loads covered then the shipper will eventually have to raise rates or buy trucks.

Free market works.

 

you did a perfect job.that owner, now know that you are a GOOD ONE. I REALLY LIKE YOUR bussiness plan.I wish you ALL THE BEST.
gruitaremus@yahoo.com

 

very helpful.

 

Double, and sometimes even triple brokering...... that's the real evil, that nice rate the shipper is paying gets gobbled up quickly when the wolves catch a hold of the scent of money...double brokering is illegal, but so is exceeding the speed limit.