Why ,and How this rate

Sorry to hear that! I have customers, and have thoughts about starting a brokerage myself, but I know the whole perception of "sitting in pajamas with a phone,computer and a fax" is wrong.

I have only owner operators leased to me. We have direct customers, and take the loads, and we all find our own back hauls, or help each other if needed. However I had a very important customer. You as a broker know what market has been for many carriers in last few months. Well this customer had another carrier as well that did runs for them to go to Georgia from way up north Wisconsin. All together about 980 loaded miles. I guess that carrier failed two times to make the pick up, and it was a reefer load. This was around October time. He called me to see if we can do it and he was paying us $4,500. That's insane money in this market, and we all know it. It was a Saturday pick up, and had to be in Georgia Monday at 10 am. He did all the rescheduling himself. I got a new guy that wanted to make money. He kept telling me how he has been cheated out of money, and so on. After 3-4 weeks on the road making good pay checks(in reality it's time to drink like a bum for 3 weeks), I ask him before I accept the load like "hey, I got $4,500, with your dead head it's going to be about 1,200 miles, you get to spend time at home for saturday night, just make sure you roll out on sunday to make the extra 700 loaded miles"...he accepts the load, everything is fine. The customer was so happy, and wanted to give extra money on other lanes, not a lot, but still a nice gesture. This guy calls me back saying "I'll do it this time, but I don't want this load again"... This is a day before pick up. I guess it was going to ruin his weekend. All the other guys were either on the road or at hometime, and couldn't do it. I figured I was picking up a trailer in that area since I gave mine to the new guy, and I'll pick it up and deliver it. Problem is the trailer wasn't what it was suppose to be, and to dead head for his trailer, and come back, it just wasn't enough time. That customer was so pissed off at me, and I ended up firing the guy. I still have him as my customer, but I did a few loads for free, without him expecting it, cause I know he went looking at brokers, and other carriers after me, and the other carrier couldn't cover 1 freaking load that he needed.

Now I can't imagine what broker's go through when things like this happen working with multiple carriers. The real break downs, the fake break downs, the lies of "yeah the guys empty".."he's stuck in traffic", and so on.
It's not easy being a broker, or at least a reputable and a successful one.

 

One of the benefits of Landstar is that the gross revenue for the load is shown to the BCO. This info can't be fudged by the agents because it is the same info Landstar uses to invoice the shipper. The commission of the agency is also fixed. There is no negotiation with a BCO. A load is posted for 2,000 then the BCO gets his cut (depending on their contract) plus FSC. The broker gets 7% of 98% of the linehaul and corporate gets the rest.

 

There should be negotiation from a BCO if it is a spot market load. Some of the spot players can be real shady too. Having association outside of Landstar filtering the rate thru that before it gets to Landstar.

 

The way the system works it encourages agents to not work with BCO's since their commissions are negligible when dealing with them. It's also interesting that their TMS software can post to DAT and ITS when posting to Landstar's board. Since I'm getting started I pull from a shared pool of loads to post and many of them are just god awful. Most come from shipper boards and almost all of them are cheap freight. The loads just sit and the rate never changes. Maybe they'll get a clue after Christmas when there are still 20 200 dollar loads sitting in Georgia.

 

I had 5 O/O's leased on at one time. Two I didn't have to worry or think about. The other 3 I had to babysit all the time. The problem today is that no one wants to work. They want a check though.....

 

Sadly that's the thing. Luckily guys leased to me are my good friends that run like they're suppose to. I don't lease anyone else or hire people. I tried it before with two guys and it was a night mare.

One guy that has drove for 17 years wanted to become an owner operator. I met him when I was only 6 monthes into driving and we kept in touch. When I asked him what he wanted, well he wanted the long nose peterbuilt with all the chrome and lights and so on and to haul a dry van. When I asked him what is he expecting to make in his pocket, he told me he wanted 8k clean a week. I told him Gross is possible but net 8k a week??!? With the equipment he wants to run?? I told him more realistic number can be 4k a week NET on average if he got a different truck, and ran responsibly. He wasn't too happy to hear that. Then I know a guy that kept trying to lease onto me aslong as he can make a $2500 net a week. I don't understand some of these guys and it's better not to try.

At the end of the day we all want to make as much as possible, including brokers. The brokers im good with typically know what my rates are, and I typically will help them out when needed. We have an understanding. If a truck moved at a really good rate, I'll lower my price down to a certain few brokers below then what they offer. They're happy, I'm happy cause when I need a load they'll give me the rate even if they might lose a few hundred on it, but down the line we keep each other on business through practices like that.

 

Thing about landstar that I don't like is the high %. Sure there are a lot of benefits for tires, and so on. But it doesn't accumulate to how much the % goes. I think landstar is perfect for guys that want to learn the side of the business how to book loads and so on before they start their own companies.

Also I'm noticing landstar is putting loads on our load boards for half the price so they can make a bigger profit compared to giving it to landstar drivers. That's not good in my opinion. I have proof of a load about a week ago that a customer have to few of us, and one of us was a landstar. Price was $1650 I believe and landstar didn't give it to their own drivers, instead it put it on the board for $800. This was a 382 mile trip I believe. Here is the crazy thing, no one took landstars load, and we ended up picking it up. So landstar didn't make a penny, why not have it to their own drivers? Could've still made something. I can't stand landstar one bit with how much greed a lot of their agents have and abuse the double brokering scheme as well.

 

As i mentioned in a prior post, the system is set up in such a way that it discourages use of Landstar BCO's through extremely low commissions to the agent. The dispatch software posts to Landstar's board, DAT and ITS at the same time. So if I have a choice of working with a BCO for 40-60% of the 7% of 98% the agency gets or negotiating with a regular carrier and getting more commission it's a no-brainer.

 

And that answer is what makes alll the o/o's say what they do about brokers taking advantage of the current loads available.............. They will usually say "if I give you more than I aint making money or fuel is cheap so the rates are cheap.........so the brokers continue to make their money and as you say some "dumb" driver will take it.
sad.... but thats the way it is