Hate to say it but if we could just get another wave of $0.75 per mile paying loads with truckers striking it might get some traction
Broker Transparency
Discussion in 'Freight Broker Forum' started by Dave_in_AZ, Nov 28, 2020.
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Just caught up on all of this and many other threads! My truck is buried in snow so time for office and forum catching up!
Hope everyone had a good Thanksgiving with the entire family! We had two of them in spite of the fear mongering!Midwest Trucker and Dave_in_AZ Thank this. -
More competition = lower rates
Less competition = higher ratesGod prefers Diesels Thanks this. -
SL3406, Midwest Trucker, wichris and 1 other person Thank this.
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So apply that to brokerages. If you have more of them, they could take the same load and offer it to truckers for less and less, and hope they get a bite. Or, they could take that load and offer it for fifty dollars more, and someone will haul for them instead. So that means the first broker has to up the price by another fifty if he wants to get it hauled, and now the rate has jumped a hundred bucks.
Now if you're talking about drivers, I believe you're 100% correct. Too many trucks creates a broker's market, and even though they compete with eachother, there will probably always be some sucker that will haul the cheap freight. So they can safely drive the rate down and still get their loads hauled.
Take it with a grain of salt. I'm still trying to figure out how all this works. -
If I charge a customer $600 for a load and pay you $400, that's a 50% markup on my cost to the truck, and seems high right? But if my cost to transact a shipment is $200 based on salaries paid, insurance, fixed cost such as a lease, paying a TMS provider, paying RMIS, etc then I've actually broke even as an organization on the load.
I do agree with you that the catalyst for this whole debacle is that truck drivers / carriers want to make more money when they haul loads, I just don't think this is going to make that happen. What is more likely is that the changes required on the brokerage end will drive up their cost (not by paying more to carriers, but rather updating customer contracts, updating systemic framework so that passing on customer charge to carriers is an easy process and meets government mandate, etc) and will result in brokers needing to pay carriers even less to keep their business a float.
Or maybe every broker will attempt to pass the additional cost onto their customers. And maybe customers will accept that, or a big player like Amazon will absorb the cost in the long run and drive all of the smaller players out of business and then control the market like they do everything else.
Who knows, economics are tricky.God prefers Diesels Thanks this. -
But also a lightbulb just clicked on here, lol. I see what you mean about needing to know operating costs. If the trucker sees you got the load for $600, then he would technically need to know your operating cost on that load before he could determine when the cost of business stopped, and the throat cutting started. So I'm kind of figuring this out as I'm typing. Like I said, I don't really know the business yet. Thanks for the insight.D.Tibbitt, JimmyTwoTimes and stuckinthemud Thank this. -
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Well the real thing they should make illegal is double brokering.
I never understood why that is legal. Broker a gets a shipper and he will pay a percentage.
If I understand it correctly broker b will take the load from broker a and give broker a percentage, keep his own percentage, and then pay the carrier less.
Sometimes it is even triple brokered.
The other thing is I don't know if anyone really has the answer to any of this. It is all speculative.
I have always thought if there is transparency it would be a better thing for everyone.
Myself I think if that were the case the Brokers will eventually settle down to a regular percentage that they pay whether it's 10% or 12% or whatever it is.
I don't think it would be easy for the carrier to undercut the broker in most cases. As far as other Brokers undercutting I'm not really sure about that either because if a carrier knows the rate unless he goes to other Brokers and tells them what that rate is then it's really not known by the other brokers.
It is not public information it is only disclosed to the parties in the transaction.
A lot of the guys that are against this are veterans and I respect their opinion.
But right now I lean toward transparency until I have a better reason not to.Dave_in_AZ Thanks this. -
Like a comedy show reading all this. If you saw that someone was making 10% you would pi$$ & moan and say too much. If it was 5%, the same thing. Let's go back to full regulation so 90% of you wouldn't even have any authority.
SL3406, JimmyTwoTimes, rollin coal and 1 other person Thank this.
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