Government regulates everything else time to regulate rates.

That’s choptank I bet there’s a catch like, it doesn’t deliver for 3 days or it had 3-4 stops or both.

 

They wont say when that one delivers into duncanville PA....

 

The way I see it, those asking to "level the playing field" are being very hypocritical given many are the same folks that raised holy heck when the mega carriers attempted to level the field with speed limiters and ELDs, making it less attractive to drive for a small fleet as a company driver.

Asking to go back to regulated rates in the trucking industry is a slippery slope, the regulators will listen to the mega fleets on margin and set rates accordingly, same as they have done for other "safety" measures -ones that we all know are really thinly veiled attempts to level the playing field between independents and mega fleets. The independent broker will fade away just like the independent trucker is because they will not be willing or able to compete with the mega brokerages, leaving independent truckers in an even worse position than currently.

Please, look at an earnings report from JBH, Swift or any of the other publicly traded megas. They are ecstatic when they hit 5%, very few ever hit a 10% margin. The average mega fleet makes 3%, which sounds like a lot when they have hundreds of millions, even billions in gross revenue, but in reality it is pitiful. There is no way an independent should be happy for that little margin. This is what will happen if government steps in to try and "fix" this issue.

That said, information is very powerful and I do like to know all aspects of any transaction I am party to, it helps me price my service accordingly. My only concern with mandated transparency is it could drive the rates down unintentionally because if the shippers saw what the carriers were actually being paid they would pay less to the brokers. The brokers are going to make their cut any way you slice it, they will not lower their spread just because the rates are transparent. As said earlier in this thread, the information is available now, if you know where to look and are willing to pay for it. The savvy and successful business owner already knows what the lanes they run pay and can calculate fairly accurately what the broker and other parties are making as their cut.

Markup is a normal part of doing business. I have a target percentage I need to make so that my time and investment is fairly compensated, if the job doesn't pay that then I don't do it. That simple. When my costs go up so do my rates -did when I was a car hauler, a tower, a garage and still do now that I am a consultant and speaker. Same with my rental properties and other investments, if they don't make the margin I want I either increase the rent or sell them.

The only way to control markup is to say no to rates that you feel are out of line. The only way I adjust my rates I charge for services rendered is when I price something and it does not sell, then I adjust the rate downward. If it sells like wildfire then the rates go up until sales level off. This is how a free market sets prices, charge what the market will bear.

I liken the amount a broker keeps to their service fee for providing the trucker with a load and sales staff support, as well as cash flow financing with quick pay (not third party factoring companies). You the trucking company owner decide how much that service is worth to you, no one else, and you accept loads that pay accordingly.

As someone that currently makes their living off government regulation one would think I would support more government intervention, after all I stand to make a bucket load of money off helping companies stay compliant, yet I do not. I grew up in the towing industry, which despite what OOIDA claims, is heavily regulated and very cut throat. I do not wish to see rate regulations on any part of the trucking industry as they will serve no purpose except to cause everything to cost more. Will will all still make our same margin, it just will come from different places.

You want to keep brokers honest, learn the full logistics business not just the truck driving side of it. Learn how contracts are put out to bid, the purpose the spot market truly serves and where to find actual costs to move goods. Then you will be in a better position to hold their feet to the fire and make what you truly deserve to make as a trucker.

Lastly, I see many untruths on here about how little the broker has invested in moving a load. While it is true they don't own any assets, they still have massive overhead if they are doing things legitimate. A good broker will have cargo insurance to cover when the fly by night carriers are under insured, they will have large cash reserves (or lines of credit) to provide quick pay given that they may pay the carrier in 3-14 days but be waiting 45 days or more for their payment from the shipper plus they will have marketing costs to obtain the loads, office and technology costs, staff and other traditional business expenses. Not to mention the costs of learning and keeping current on what is happening in the market, where the next hot spot is going to be and who is going to have the freight to keep them, and their clients, busy.

I never used brokers much in my car haul company, yet understand their purpose. They were my sales team in markets that I did not regularly run, not my sole source of business. As my sales team in these odd areas they were worth every penny they kept off the load to help me keep my trucks loaded and rolling at a profit. I could not have been successful for 15 years if I ran exclusively from spot market freight, my direct contracts were my bread and butter -spot market just filled in the gaps.

Perhaps a shift in how the independent trucker finds their loads is in order rather than government regulation on brokers? More direct sales and less brokered freight, less trying to run all 48 and more of a targeted lane approach? My success was in running the same three lanes, rarely deviating, so I began to know all the key players in my market and could sell directly to them because I could accurately predict demand and adjust my availability accordingly.

Really, this was the key to success pre-deregulation, the lanes were all controlled so you knew every customer along the lane and could compete effectively on service not just price.

 

What wait, ... uh we had deregulation in the early 80’s why in the hell do we want to go back to that?. Learn to not take the cheap ### freight or learn to negotiate and supply superior service and build reputation. WE DEFINITELY DO NOT NEED THE GOVERNMENT IN OUR INDUSTRY ANYMORE THAN IT ALREADY IS!. BETTER WAKE THE #### UP AND REALIZE WHAT YOUR ASKING FOR!.

 

Their you go, just let government take of everything. Ha ha

 

Having the price the broker got paid from the shipper doesn’t change anything. All it does it make it easier for shippers to get back solicited. The load is still going to go for what it goes for.

It’s happened to me several times where I hired a carrier and then they on the down low gave the info to their other company that is a brokerage, and stole the customer. So now, they would also exactly where to bid to root me out. Better paying the customer, the harder they would be gone after. I can’t see anything positive coming out of this. Only negatives and lower rates ultimately.

Dino, you seem to just be regurgitating what you have read other people say. Have you actually looked at any of these contracts? Have you ever actually tried to find out the info from the broker? Have you been terminated for asking? Have you ever had to go to court and pay huge legal bills to do any of this? I feel like there is a lot of assuming going on with this subject.

I respect your opinion but just don’t agree on any positive outweighing the negative.

 

Great post @brian991219



You guys who want this have to be fools to think the shipper will not be just as interested in seeing the brokers hand and keeping maximum cash in their account. Once the shippers find out how cheap the trucks have been running they will tighten their pockets and punish us both.

Hardieboard out of plant city florida used to be handled by brokers. Then hardie got on DAT themselves and cut the broker out. So while the rate to the trucks may have stayed the same, what hardie is willing to pay out for freight has dropped forever. That means if you the carrier end up getting a dedicated direct account with hardie, its gonna pay less than before because they now have the experience and the contact info on a tremendous number of cheap haulers to pit you all against each other.

What im saying boils down to, many shippers will get broker authority themselves when they see the spread, and once they start moving their loads by in-house logistics, the rates on dedicated from that carrier will fall too. In the end it will hurt trucks.

 

I also don’t see how this helps with double brokering?

Also, I’d love to hear from the “brokerage is so easy and make massive profits” guys... How much do you think it might cost to start a brokerage? How much to operate it not only from an expense standpoint but also a cash flow standpoint? Ok, now... don’t you think a nice return on investment is ok considering all of the risk taken? It sure as hell ain’t any cheaper then starting a trucking company.

When I’m booking my trucks, my job is to make the broker make no money on me. To make his money off the back of someone else. When I’m booking my load on someone else’s truck, my job is to protect my customer and make sure it all goes well while still making a profit. I ALWAYS ask the carrier first what they would need to move the load. I can’t help if someone says $2/mi when I have $3.25 in it. I also can’t help when someone says 3.25 when I have $2/mi in it. You set the stage by learning the expectations, and negotiate from there. For me it’s not smart to go always with the cheapest. I do a ton of due diligence regardless.

The other day I paid $3200 on a load that I had $3900 in. I could of booked it on a carrier for $2700. I took quality over additional profits. I don’t have a sales team to constantly find more customers so I choose to protect the ones I have with very high service. The next brokerage may have taken $2700 truck but is also spending 100’s of thousands per year on salesmen. Either way, the truck that said $3200 I’m not going to say ok cool since everything should be fair I’ll pay you $3600. It’s the low ball carriers cutting fellow truckers throats. Not brokers or transparency.

 

F choptank lol

No we don't need govt intervention. It's gonna get worse not better.

 

@FoolsErrand hit the nail square on the head.

You guys wanting to go back to regulated type environment. Half of you would prob be out of a job tomorrow. You forget back during the regulated days we also had WAY WAY WAY more manufacturing. We weren't entirely dependent on Red China. We had more middle class America working #### good jobs.

How many families back in the day had 5-7 children, like on both sides of my family. If you had a decent job say like IBM like my mom's father had. 7 mouths to feed and my grandma only worked part time here and there. Went on the yearly vacation and were still able to save for retirement. SORRY NOT GONNA HAPPEN AGAIN QUIT DREAMING.

Didn't know We had so many closet socialists here. You're free to do whatever this is the greatest God #### ####ing country on earth still. How did the whole elog thing end up "leveling the playing field" real F'n great right guys.

Yall loosing and wanting that participation trophy. Pick a move and roll the die. If ya go tits up so be and start over but don't rely on someone else to fix a you problem.

Like a lot of others have said go somewhere else and live. Regulation is great for those with no skin in the game