When Using A Broker

There can be huge value in being undersomes authority. But you have to look at what that is and what they are providing.

80% is in the range of a company that dispatches you, provides you with a trailer and a great rate on things like insurance. Sounds like you are getting none of that.

He is carrying the paper?!? You can have someone do that under your own authority for 5%. So now he has to provide you with 15% extra value. Other than authority what else is he giving you that you can get on your own for less money? Fuel cards are a dime a dozen and give good rates (will even give you a couple dimes if you need it).

Direct Freight??? One of the most mis-understood money losers in this business for percentage and independents.

You are paying over $10k for insurance. And unless you have a bad driving record that is high for independent let alone what it costs for a truck leased to someone.

You have fixed equipment expense of around $.30/mile. Insurance is around $.08.

You really need to figure out the numbers. But rarely is an 80% deal going to work out in your favor.

 

How is direct freight a money loser? If you actually have something to offer the customer you will be above spot rates. Many people have such poor sales skills/customer service that they need to use a broker,no customer would put up with them.

 

I think BBB is referring to a load board that goes by the name Direct Freight. If memory serves, I was getting junk faxes from them when my authority posted.

Every one of those I've looked into seem to attract the bottom-feeder shippers that are two lazy to actually take phone calls by using a regular load board.

 

That makes more sense. Sorry.

 

Yeah, that is our problem.

Many independents have such poor business skills is that they fail to look at the big picture. They are taking cheap loads to get back to get that direct customer because everybody knows you have to have direct customers.

WRONG, you have to have GOOD, LOYAL customers. It is about the money you make and not where that money comes from.

I have some good paying direct business. But what it would cost my guys in terms of cheaper rates to get to the direct freight.

 

No, I was talking about the sweeping generality that direct freight is what is going to make or break an independent. Well, actually, some direct freight can break an independent.

To be clear, the goal of a driver should be to get to the point that they have relationships that they are hauling freight that never hits a load board. Keep all your loyal customers updated with location of trucks.

And yes, DriectFreight.com is pretty bad.

 

Eliminating those that go into business so they can do what they want or make a statement,you are in business to make money. Cutting out as many middlemen in any aspect increases the take. Too many can't/won't provide the level of service needed so they need someone to take care of it for them.
Many are taking the easy way out and let others do what they should be doing.

 

Eliminating the middle man is another over generalized misconception. And something that has been debated here often. What many in this business refuse to understand (and likely the ones that should not be business people) is that a broker that handles all the loads for a shipper is providing a valuable service. The customer makes a single call or sends an email with all available loads and that is it.

Now I am not saying that all brokers do the job they should do and work as an agent for their customer but the better ones do. I have given several examples of shippers that have figured out that a broker is cheaper for them than trying to book loads themselves.

My posts are more to the general sentiment that brokers are bad, direct business is good. Every situation is different and it is shocking how little many independents understand about business. Just got off the phone with an independent that is about to lose his truck. He refuses to haul for ANY broker because "he is not going to make them rich on his hard work". But I found 5 LS loads while talking with him within 30 miles of his home that paid $.50/mile better than what his direct freight paid. He will never touch that freight and be a company driver by the end of the month.

 

I've seldom found a broker load that pays more than my customers. I broker a lot of loads(2011 was 6.9-1) and i know full well the service i provide for those customers and that is why i get the rates. And they don't want to use 1-2 truck carriers because they either don't have a truck availible,one rate in the morning and another in the afternoon,waiting to see if there is something better,ect,ect.
But to use brokers for every load,well you hear every day about how cheap,have to sit a few days,credit problems,ect. Again most of these are by the people that want to do what/where/when/why to prove how independent they are. They have to use brokers because they could never hold onto a customer.

 

I've found broker loads that pay more than our customers. I also think there's a lot more of it in other areas as well from what I can see, and not that our customers pay bad they are actually paying close to and in some cases over $3 a mile, and the "backhauls" from the broker pays the same great rates as the outbound haul. I have other trucks seriously undercutting me, that's ok, I miss on a lot of loads because of that but I still get calls. I provide superior service to them and always get what I want, then late at night when i'm happy to take a 2am phone call or on the weekend my rate always stays the same even though they are willing to pay much more at that point just to find trucks. I'm not being overly picky about what I haul and have even hauled to places far away from where the go to broker had any return freight. Keeping steady work that way. It is out there but most drivers, like the ones undercutting me, wouldn't know what it was if it slapped them upside the head, but, much like you say they wouldn't know how to keep the business by not being all over the place on rates every time or providing the service they're paid for in the first place.