Building a Better Broker

I was in cellular industry when we had bag phones, two carriers and less than 2% market penetration. When I became sale manager I would tell my team if they sell on coverage then as soon as the competition installed a new cell site they would loose a customer.

 

Price is always addressed but for many the cheapest price is not always the best deal. And ones that are just shopping price are not my target customer. Sure, maybe I give them a bid but based on what I believe it can be booked at. Also remember that this business will also be used to build my carrier business. So going after the lowest price works against the longer term plan.
I haul direct for one of these accounts and get under bid on a weekly basis. But still have the account.

It is called “back solicitation” and only a concern on one account. But have hauled for several different brokers and was upfront with them that we have a existing relationship. And if they did try to come after us despite this we can prove a long relationship with the account. And have mentioned who we have hauled for to the account. The lanes we are looking at are not in primary competition and we would only be in competition when these brokers can’t get loads covered. So on these not worried. And I honor that part of the agreement on other accounts. Actually passing up one load in area for this reason.
Side note, about three weeks ago talked to an account that does business with broker I have used but not on this account. Broker called me on the load and told them that I had been talking to the account and if that was going to be an issue let me know. Didn’t take the load but got a letter three days letter reminding me of back solicitation clause. My attorney responded that I had never hauled this account for them. They responded that if covered any account that they have or have had a relationship with.
I no longer take that brokers calls.

 

I would say that most businesses that compete on price alone do not have a business model that is designed for this. Look at all the O/O’s that take cheap loads. Do you think that when they started they said “Hey, if I keep my rates below everyone else I can run more miles and make it up on volume”?
Discount, or lowest price, business is a very specific business model. They have to understand this and build the business around it. They will lose business on service issues or lack of services provided. But the business that competes on price but is not structured for this will be wondering what happened when the wheels start to fall off.
And my business is very targeted. Will I lose more business than I get because my price is higher? Sure. But if I book 25 loads a day I will have maxed my infrastructure.