Landstar

I have known a couple of Landstar agents who have their own brokerage or company that they first run the loads through before giving it to Landstar. They will then either broker it to an outside carrier or to a BCO. It is double brokering no matter how you look at it. Some agents are more up front than others. Landstar is supposed to have a certain percentage that they give to outside carriers and a different rate they give to their BCO's. I know that they don't always follow the formula, at least when it comes to outside carriers. Still, they can have decent paying loads, even if you broker it through them. Sometimes their rates are too cheap. But, you will find that with any broker. I think the way some brokers are taking so much of the line haul it will encourage more carriers to go direct and cut the brokers out of the equation.

 

Landstar BCO's get all of the FSC, and then a certain percentage of the linehaul depending on whether they lease a trailer from Landstar, or if they have their own. Agents get 7% of 98% of the linehaul when booking with a BCO. Some loads we make the same as if we brokered them out, some we make far less.

The thing you have to remember, is there are bad people out there in every profession that give the good ones a horrible reputation. Brokers are no exception, but we're not all bad. A lot of times, I'm not familiar with a particular lane and will ask the driver/dispatcher to be honest with me and tell me what it takes to run that lane and if I have it, I'll gladly give it to them. There's been times I'll flat out tell a carrier who I work with on a regular basis on an important load what we've got to work with and we'll work out what he legitimately needs to live where I can still show some profit.

What you have to understand is that with Landstar, we split the profit evenly...so we have to make some money on the loads to cover our overhead. Our agency feeds nine families out of the profit we produce. There's not one person getting filthy rich, we're all working hard and making a decent living like many of you. Am I complaining? Not at all. I love working with Landstar and am proud that my family has an agency with them 15 years and going strong.

Many drivers accuse brokers of doing nothing more than making a few phone calls, and filling out some paperwork, but it's so much more than that. I'm usually on the phone non-stop from 0730 to sometimes 2100 every day. I'm emailing back and forth, I'm handling problems for drivers whether it be picking up or delivering. I schedule appointments, speak with my customers, rate freight lanes to get more work for our guys...the list is endless. Do I drive for a living? No. Do I feel like the mega carriers pay you guys what you deserve...not at all. But the life of a broker isn't all cake and lollipops. I always have my phone, even on weekends, and at two in the morning. I never get to just leave it and take a few days off. Hell I worked the majority of mornings on my last vacation.

 

I only know about 5 Landstar guys good enough to talk serious about business with and all of them get their good paying freight directly from the agents they use a lot. They generally only use Landstar's load board when they absolutely have to. The general consensus is that the good paying freight never hits the board. Whether it goes to the agent's "boys" or brokered out to cheaper outside carriers. All those guy start frothing at the mouth when the subject of "outside carriers" comes up.

 

It's the proverbial pink elephant my friend. I would equate it to union guys and their feelings on scabs.

 

You aren't. Read over your thread, tons of replies here.

 

I have been told by some agents that outside carriers get 80% of the rate, which is more than the BCO would receive. Others have told me that is not necessarily the case. They could get more or less. Who knows what is the truth.

 

As a flat percentage, yes it is more than a BCO would receive. However, a BCO's percentage only comes out of the linehaul. The BCO receives 100% of accessorial charges like fuel surcharge, tarping money, etc. Let's look at an example: say there is a load going 1000 miles and it pays $2 a mile. At 80% an outside carrier would get $1600. A BCO who owned his own trailer, at today's FSC, would get $480 FSC and $1109.60 linehaul, for a total of $1589.60. That's a difference of $10.40 in favor of the outside carrier. That doesn't seem like a huge difference to me, especially when you figure in the extra cost of being an independent carrier.

 

The carrier pay should include the fsc as part of the rate. Whether it is Landstar or another broker the fsc should be included in the total rate quoted. If the load pays $2,000 then it should have the fsc included in that figure. If not, then the broker isn't being honest. Some carriers will just calculate the fsc and deduct it from the total rate for their owner operators rather than having a separate rate from the shipper for fuel. I don't know which way Landstar actually does their calculations, but that would be the honest way to do it. The fsc is part of the rate, whether separated or not and should be passed on to whomever buys the fuel, whether an outside carrier or a BCO. In your example the carrier should be paid on the entire amount of $2,480 rather than them keeping the fsc for themselves. Next time I talk with one of their agents I will ask them. Perhaps LSAgentLZO could answer that question.

 

I believe they seperate the surcharge from the rate so the BCO gets all 100% of it. I've heard some of the shadier agents will include the surcharge in the rate and take a cut of it as well. That is what they say in the DAC in here on Landstar, drivers in there stress the importance of making sure the surcharge is seperate when booking any load so you can be sure to get it. I have a friend who is a Landstar BCO and he tells me that not all loads have a surcharge but from reading on here I get the impression that all loads for Landstar BCOs do have a surcharge.. ..I dunno. I do know he is working off load boards only and is very happy there. I have spoken with him a few times since he leased on in Jan and told him he needs to try and build relationships with a few agents for when times get tuff and the rates on their board drop, like they did at the end of this summer. He tells me that is crazy and he can live off the board. I guess only time will tell. I have to believe since he's been there almost a year now that he probably has a relationship established with an agent or 3 but I haven't spoken with him in a few months..