Low rates is there a bottom ?

Am thinking Pilot already beat you to that one. But that is another subject entirely.

 

There is so much more to it than just handing someone some work. I wish I could get customers like you say you do without even stopping by, that is some darn good salesmanship! We have one person on the road 4 days a week visiting dealerships, auctions, other carriers, and so on to secure new work and check on our existing work. No only that, but when we do give work to other carriers, which happens often, we pay them within 48 hours of drop but have to wait up to 45 days for our money, so yes it is worth 20% or more of the rate to front them the money in hopes we actually collect from the customer, especially with new accounts. In 2009 we moved roughly 3,000 units for a major manufacturer thru a third party logistics provider that went belly up on us halfway through the project, we were left holding the bag on almost $25,000 in monies paid out to our partner carriers while we waited 2 years for the bankruptcy proceedings to conclude so we could recover $5,000 which included monies owed for transportation we provided with our own 5 trucks. In the end we lost about $50,000 but paid our contracted carriers 100% of what they were owed on time. That alone was worth the broker cut for the security they got! Especially during the beginning of the downturn, it was rough for us to survive but we did with our integrity intact.

In addition to the sales costs to generate the leads on new business, how about the back office costs associated with submitting invoices, processing and collecting payments, follow up with the shipper and receiver to confirm the job was completed satisfactorily? All that is supposed to be done along with the marketing for under 15-20% of the gross rate? Just those functions alone are one full time employee at my company and we only handle about 150 units a week, so imagine what it would take to process what a typical broker does in a week?

The one thing I will agree with, you do not buy a relationship you do in fact earn it with service and trust, but in most cases you need to buy your way into the door. Meaning, if they don't know who you are then they won't know why they should use you. Marketing is so much more than just showing up to move a load one time. Most service industry businesses spend 40% or more of their annual budget on marketing just to maintain existing market share, trying to enter a new market can cost much more than that.

 

That's where you are wrong. Dealers want a cheap price. What ever you are doing is working for you and that's great. For individual dealers that make work. I went after whole auto groups, finance companies and major chains, and yes you do need to wine and dine them. Mom and pop car dealers want service, everyone else wants a cheap price then service

 

Let's all remember this when work picks back up. I know I will love it when I get to play the "let's see how high the price can go" game.

 

Wow Metrogistics back at it again. They do a lot of spot buys on new car contracts where they get 30% over contract rate. Then put loads out there like this. We should all boycott these bad brokers. Only way to put them out of business. Remember they don't own trucks. We do!!!!!!

 

Good idea in theory, but there is some operator seeing the above thinking at least they get something going back to Detroit one pick/one drop. That is why Metro can keep posting that stupid stuff. Because there are idiots who will move it.

Over the years of reading this forum, have seen most every excuse on how someone can justify a dirt cheap load. Then when they really get pushed the next item that rolls out is "what is cheap to you may not be to someone else."

Point? You just can't fix stupid. The bright side for the rest of us is they will be out of business within months of doing much of that. The bad side is there are at least 5 more of the same intelligence to replace them & rates are always a reflection of open/available capacity.

 

The mgmt side maybe. Would think the dispatchers just see the payable to the transport co & not what Metro is billing a customer or the contract. If dispatch were to see insane margins, they of course would either develop a conscience or want more money on their paychecks.
Meet mgmt. http://www.metrogistics.com/about-metrogistics/management-team/