Landstar

That last part wasn't geared directly at you. It's in general. If anyone has questions, I'll happily answer them. I would say the same thing to people about Schneider, Covenant, or anyone else if I knew anything about them. Sorry if you took it that way.

 

No problem. I don't remember saying something about it before, but I may have shortly after reading the article, but that would have been some time ago. I wish that I could recall where I read it. In any case, it was apparently never implemented or they changed their mind from what I gather from LSAgentOZR's post. I can't imagine their BCO's not walking if they ever decided to not give them 100% of the fsc. When I leased to them there wasn't anything like the fsc. Landstar is usually up front with all their charges. They are all listed in their contract.

 

This thread had me ask an LS agent that I do a lot of work for. She is great to work for and will call or email me on loads before posting to see if I'm available.

I asked her about what she feels about direction LS going (she has been an agent for over 10-years). She said several years ago when she was getting frustrated about the level of work compared to income (she had several people working for her and over 50 BCO's they tried to get dispatched). Several mentors convinced her she need to change her business model from that of a LS agent to that of a broker that happened to be associated with LS. She said it was the best decision of her life. She has one person working part-time, only a handful of BCO's that she works dedicated (RGN drivers on dedicated lanes) and does not view a BCO any different than an approved carrier. If they have a good record then she will work with them.

She no longer has a large office, never deals with brokered loads to help cover a BCO and her net income is up. Because she does no drop-and-hook van business (van is less than 30% of her business) she doesn't have to worry about getting a LS driver to cover a load.

In meeting that she attends she is talking to more and more agents that are doing what she is doing. And many are getting very frustrated about the level of double brokering of loads that seems to be happening with LS just saying it is not allowed but not taking steps to stop it (have heard this from several agents).

When I was doing a lot of research on the different business models in this industry I read an opinion by a market analyst regarding LS. He said they went from a world class company to a good company and if they do not takes steps to control the wild west attitude of anything goes amongst their new crop of agents they will become just a big company.

I am impressed with many of the people I deal with at LS. I feel for any O/O that is just starting pulling a van for them. They are likely going to pull more double brokered freight in a month than me and all my drivers combined will pull in a year.

 

There are some Landstar agents who are booking brokered loads on outside carriers. I booked one a few months ago without realizing it. I didn't find out that it was double brokered until after the fact. There are some good agents. I have several that I have dealt with for a number of years. There are also others that don't seem to want to expend the effort to build their own shipper base. I know of a couple of other major carriers who are experiencing the same thing when it comes to double brokering loads. Part of the problem is that there are so many shippers who are using 3ppl's and brokers to book loads and in order to keep the doors open these agents are double brokering loads. It may keep the doors open but it really destroys the rate. Carriers are turning their heads to the practice since they are still making money whether the load is from a shipper or a 3ppl or broker. Landstar has gotten rid of a number of agents the last few years. I don't know if it was due to the double brokering or something else. I still think that Landstar is a good company. Most of their people are top caliber. They do need to do some housekeeping.

 

I can agree with that. I've placed two phone calls to other agents this week who had freight from my exclusive customers posted to inform them that Landstar frowns heavily upon double brokering. They are getting it from other brokers and trying to broker it themselves and wonder why they aren't moving any freight. I'm going to check again tomorrow to see if they still have it posted. If so, I'm probably going to get corporate involved.

 

About 6-months ago when we decided that we would be expanding including a brokerage business I started talking to as many owners of brokerages as I could. A common theme I heard from a lot of small brokers was that they sent a lot of business to LS.

One was kind enough to send me many pages from the material from one of those broker schools. In the objection handling section they used the "I like working with LS because of the size." The response was that they had to develop a relationship with an agent (list of agents that would work with brokers was in the back) and tell the customer that they could place freight with LS PLUS they are not going to be pushed by corporate to use just LS trucks.

It went on but you get the idea. I applaud your efforts for taking a stand. If you have to make that call I would be interested in hearing how LS handles it. From a carrier side, customer support is unmatched. We have hauled over 50 LS loads this year and have only had to call twice (once being yesterday) and in both cases we truly felt they wanted to make sure we stayed happy with LS. And we are.

 

There are a number of Landstar agents who are using 3ppl's and outside brokers to find their freight. It does impact the rate. And considering that Landstar doesn't want outside carriers to double broker their freight, I would think that they would be more on top of this. It may be that some agents who are booking freight with outside 3ppl's and brokers don't really care whether the load goes on a Landstar truck or an outside carrier. It is usually easy to tell if they are double brokering a load when I get a call. The rate alone will be a good indicator. There are some good agents who have good paying freight that the agent gets direct from the shipper. I would like to see Landstar find more agents who can sell. Perhaps one reason why some don't go out and find their own freight is due to it being easier to sit back and check the fax or email for loads. Some agents do a very good job. They knock on doors, book the freight and find a truck. They don't wait on another broker to find their loads. They also do a good job of servicing their acounts. I know of one who has had this one account for many years. I don't think that anyone would be able to go in and book a load from his customer. He gets good rates, always finds a truck when needed and takes care of business. It isn't just Landstar that does this. Schneider works with other brokers on a regular basis. They prefer to call it "co-brokering" rather than double brokering. With Schneider it is apparently corporate policy. Ironically, I have gotten better rates from one of their "co-brokers" than I could get direct from Schneider.

 

The pumpkin bought a 3PL company a couple of years ago. It was a company that did no brokering and truely acted as the logistics provider for large companies. It was Art somehthing. Until this they did not have a 3PL to speak of. But I would suspect that the reason for the rates has to do with contracts that where in place before the purchase. I see this on Dow loads. Schneider will offer me less than $2 and I will get better than $3 from LS on the same load. And come to think of it I haven't even seen Schneider listing these loads anymore. And what is interesting is when I talk to the 3PL group they send me to Mercer or LS on loads but tell me to call back when I have brokerage business in place. They only want to talk to someone that can cover 20+ loads a week.

 

Landstar did this same thing in 1995 with the purchase of Intermodal Transport Company (ITCO). That's how my family got involved with Landstar in the first place. It became Landstar ITCO, and then shortly thereafter was changed to Landstar Logistics, and then Landstar Global Logistics when we went international and obtained our NVOCC.

I plan to pursue it and I'll let you know what happens Bill. As far as servicing our customers G/MAN, we do the best we can against the odds and are working to improve that. We have a very good customer, but thanks to an old LS agent, we are working on repairing Landstar's image with them, hence me policing for double brokering.

I'd like to find someone who is smart, savvy, and motivated to do nothing but sales on commission and secure some more good paying freight for our guys. I just don't have the time at the moment to get out there and get it done with everything that needs done in the office.

 

A few things about LS:

1. Their refusal rate percentage does run in the mid to high 90's.

2. BCO's do get 100% of the FSC and other accessorials, sometimes they are broken out other times they are in addition to the linehaul. It's my opinion that the smarter agents list it as addition to rather than an inclusive breakout.

3. LS may not condone double brokering but it does happen, there are a couple agents that I know of that push the loads from one desk to another ie. Mercer (husband) to LS (wife). Double brokering is accepted, CH and Schneider are two very big customers of LS. It is fairly easy to catch an agent double brokering, all you have to do is ask what the commodity is, the dbl. broker agents usually have no clue what they've booked.

4. A BCO does not have to 'develop' a relationship with agents in order to make it at LS, in fact BCO's don't have to work that hard if they live in the right area. I run the board, I do have a few agents I'll call first but that doesn't mean we have a 'relationship'.

5. LS is not the co. they used to be, I challenge anyone to show me what co. is. This industry has changed dramatically in the last twenty years, most of it in the last ten or so. The one thing that LS has going for it that most others don't is freedom to choose, they have a lot of rules, some may seem heavy handed but the upside is they have a good safety record for their size.

I've been in and out of LS since 95', back in the day BCO's had to trip lease if we wanted to haul within the umbrella, there was no internet, you spent hours calling agents looking for freight, many would string you along hoping you would stick around, that doesn't happen anymore with the loadboard. Scanning paperwork has all but eliminated paperwork getting lost which means you know you're going to get paid on time. Fuel discounts are a nice perk as are other discounts. LS does support the BCO when there is a dispute but you had better be well documented.

I closed up a few months ago and went back to LS, I spend too much time with my family to devote the time to running my own show, I'm happier for it.