Truck Uber & Amazon

Well, i know when I purchase or sell something online I don't broker it out to parasitic leach to ship product for me. I go straight to source, USPS, UPS, FedEx etc. Why should I pay someone 15-25% more just to find someone to ship it when I can go straight to source.

 

That's silly and not living in the real world. I could ask why do you use leaches like UPS and FedEx when you could very well send or go pickup stuff you buy online yourself and keep that money? Brokers are needed and do provide a valuable service. Shipping and receiving is not the core business of most companies out here needing freight moved. That's why very few of them have trucks. It's a headache that costs money. You outsource headaches to save time and money. You're free to not use brokers if you choose not to. Get out here and drum up your own business. Or learn how and when to use brokers.

 

Yeah anybody who thinks that Amazon taking out all the brokers would be good for them is out of their mind. Amazon (and Uber) both have long histories of coming into a business and 'making it more efficient' which is another way of saying squeezing ALL of the margin out of it.

A world where everyone books their freight through Amazon is a world where you make AT MOST 1.50 all miles. Tops. Probably not even that. It's also a world where you only haul Amazon trailers and all loads are drop and hook, but it's definitely not a brighter happier version of this world.

 

Yep. It isn't the people making higher margins that anyone should be worried about. It's the people who can cut margins down to the bone and still make money that are worrisome.

 

Have nothing personal against CH, I routinely work with a number of their branches along the West Coast and have developed long stead relationships with a number of individuals inside of the company and yes, they are one of the better players in the game. However, that doesn't necessarily make it right. Its a public company with a direct conflict of interest (they disrupt a marketplace, add in a few smoke and mirrors and redistribute profits to a third party). Their strategy directly relies on the lack of transparency of information (what individual A may be willing to pay is different from what individual B is willing to charge), allowing them to significantly benefit. Furthermore, Surface Transportation is about to go through a huge transformational change. Most of the stuff a broker/3PL does can be automated meaning the cost vs value incentive they offer is not there anymore. In my opinion brokerages have about 10 years to figure it out.

 

That's what Amazon and Uber type models are looking to do is disrupt the old norms with transparency and doing it on 5% margins. It's not brokers that are your problem regardless if the broker is making 5% or 50%. The issue is your competitors.

 

Why is that silly? I directly use a shipper to ship a product. Going out and picking up one package myself would be asinine. From the way you speak you must be a broker. The best and most efficient way to deliver goods is directly with no middleman.

 

What's efficient about a shipper wasting resources on something that isn't their core business? That's just as asinine as you going yourself to pickup things you buy on the internet.

I sound like a broker? Lol.... I use brokers to load my truck every day. A lot of them are snakes that is true but I really don't take issue with any sort of middleman involved in freight.

I depend on them and know they serve a useful purpose. If and when they don't the invisible hand of the market will make them disappear.

 

Ok, you got me there. I guess companies like autozone, wm, and anybody else with a private fleet or large dedicated carriers are just wasting money and dont know what they're doing.

 

The trend has been to eliminate private fleets. It's an outdated costly way to do business when trucking isn't the core of the business. Autozone eliminated company trucks about 8 years ago and outsourced all distribution to UPS Freight. Wal Mart outsourced all of its refrigerated store deliveries and inbound refrigerated loads years ago. Broyhill got rid of its private fleet years ago. Lots of examples of this. Large dedicated carriers eliminate the need for a private fleet. They also have a tendency to broker out excess freight they can't cover themselves. Imagine that.