Presumptuous brokers and even lower rates

Good post and info

 

Expedited team loads over 900 miles should pay at least 5.00 a mile, if not then the broker should step back and let the shipper rot for ignorance of demanding the near impossible.

Stupid should hurt like a brain tumor in the wallet.

 

IMO, when talking to brokers, who are generally ignorant and/or indifferent toward costs, you should include driver pay. Now everyone will think it costs $1.20 to run a truck and you will likely be offered $1.30.

 

What I have learned is that there are more market forces at work in this industry than most drivers realize. When it comes to rates there are threads all over this forum about why rates are low and how they can be brought up. Most if not all of those threads blame brokers for manipulating the spot market and offering low rates and keeping the difference for themselves.

First let me say I am sure there are brokers that will try to take advantage of carriers but it is not all of them and Id bet it is a small minority of all brokers. That minority would not generate enough market power to pressure overall rates downward. So there are other market forces at work. Supply and demand is the obvious one too many trucks and too few goods equals lower rates and too few trucks and too many goods will bring them up. Brokers do play a part as they are also trying to maximize their profits but there is another force at work and it is something that any single O/O can not compete with on any level.

Large carriers have the advantage of being large and able to use those numbers to be able to haul at cheaper rates than small time O/Os. But its not all about hauling freight for the big guys. Do not forget that these large carriers are also publically traded companies listed on the major exchanges. They are beholden to the stock holder and they will do what it takes to make sure the stock price is impacted in a positive way. It is all about Earnings Per Share (EPS) and Margins. So how do they haul freight for $1.20/ mile??? They can haul cheap freight because, unlike all of you, hauling freight is not the only way they make money. If you ever did a lease purchase program from a large carrier you know first hand how they make money in other ways. They take their used trucks and get some driver with questionable credit to chase the dream of becoming an O/O for no money down. Then run that driver into the ground so that after assuming all the risk of that used truck they get to a point that they can no longer afford the lease and walk away. The large carrier got all the payments, which is mostly profit for them, and maintenance covered on that used truck and in the end get the truck back so they can lease it out again or wholesale it and make money again.

When you can make money financing loans on your used trucks hauling freight becomes easier to do cheaper and still make a profit for your shareholders. Its all about the shareholders and those predatory lease purchase programs actually translate into lower rates of freight when you connect all the dots. We have all heard and used the phrase " Everything We Use Is Delivered On A Truck". Well that means there is a huge market in Interstate Commerce and very big market forces much greater than some broker trying to make an extra $300 is what manipulates the rates.

 

Amen !!
But lets also not forget that booking loads thru landstar, ch robinson and others, they will take a min of 30 percent of the freight rate for their profit marjon and the higher dollar the load is the more cash they can pull off the top...

 

This is coming from a broker that doesn't even use a fax or anything else to accept delivered shipping papers?
UTi is the only broker in the business that you have to postal mail everything across the country to Organ and then they'll postal mail your check once it's received.
If I see a posted load UTi will be the last broker I'll call because I can get paid a lot faster with any other broker out there in this business.

 

How often do you get it?

 

Some shippers require original paperwork before paying freight charges. I would not expect any broker or shipper to pay extra for a carrier to mail the original paperwork. If that is their terms, then you either live with it or don't haul their loads. I prefer dealing with those whom I can fax, transflo or email the paperwork. It saves money and speeds up the time when we can receive payment. I would expect more and more brokers and shippers to accept electronic paperwork rather than waiting for originals in the next few years.