How do Freight Brokers make their money?

Well stated would be nice of more looked at it that way. Instead looking for a fool to move their crap.

 

I don't think this new bond requirement will close to many brokers. I think they'll be a liitle more careful in customers they take on though.
I think we're going to see another downturn as thats what this present administration seems to want. i'd be careful in taking on new debt now unless you have the ability to retire some at moments notice if need be. Over expansion has led many a good business down the drain. There's one thing for certain in truck is nothing is for certain

 

I do run a 3PL and we are successful and as I stated, to say there is the standard 10% we all shoot for isn`t the case. Let`s just throw out the old cliche "differant strokes for differant folks". I, Myself have an office staff of 3 . So is making 10% on every load a priority, No . My priorities are providing a customer the best service possible to generate more freight in the future. I do that by giving a carrier a great rate. I dont need a carrier base in the 1000`s signed up. A good business is all about relationships, I have great relationships with my customers and carriers and its to the point that the carriers also treat my customers like there own.

I completley understand your case of using a factoring company. A case when you have the opportuniy to grow is just a sound decision. You may have taken my statement out of text. If your a start up company and have no funds to fall back on from the get go and have to resort to selling your account, then that would not be a wise business desicion

 

I don't really get all this business with fuel surcharge. A rate is a rate. Total to the truck. Why does one have to separate fuel out? Why not the cost of tires? When I was a receiver, I was charged fuel surcharge as a percentage of the shipping bill. What a BS. Broker's warehouse was 1 mile from the port, so he would charge me to get the container out plus fuel surcharge. If a truck gets 6 mpg and the distance is 1 mile, what fuel surcharge are we talking about?

 

A load brokers job isn't difficult. Middlemen of the industry who claim shippers can't form good relations with carriers cause "who has the time for that". I don't deal with freight brokers if I'm ordering something from amazon. Amazon has contracts with carriers like UPS. They have arranged agreements to provide goods and services to eachother for fair profitable costs. Now they would say "but what about the smaller companies?" The internet and telephones are the devices of communication, that anyone can utilize to order a Carrier to ship your goods, thus business relationships are formed. Stop using these leaches to drive rates down, affecting driver wages, so they can have their "commission". Tracking loads, and keeping contact, and scheduling logistic movements and blah, blah, blah. Legislation needs to drive these scabs off the road and have them slip back into their used car sales jobs, or man up and get your class A. Other than that keep you greasy fingers off freight. No different than stock brokers playing with people's hard earned money, get off our backs, leach.

 

Zombie thread apocalypse. Four and a half years between posts I wonder what the record is.

 

Freight brokers aren't paid by trucking companies... They are paid by the shippers. They replace the personnel the shipper would have to hire to source trucks. For a load to get done several things have to happen and the first step is going out and finding a truck to run it.

Most shippers have LONG setup processes. It routinely takes me over a month from a company agreeing to do business with me to the first actual load. This is because their purchasing setup is designed to buy intermediate goods that they need for production from a limited number of suppliers. With transportation they would most likely have to setup a new carrier on almost every load they give to brokers.

Don't kid yourself. I've never been near as cheap as the customers who have lots of routine freight that they can get big trucking companies to bid on. My freight pays 3-4 bucks a mile right now... Their freight pays <2 bucks a mile and always will. Megas will take their freight hundreds of loads at a time so that they don't have to pay someone like me in house to find loads for all those trucks. Plus when you have 5,000 trucks the game is about utilization more than anything. Their CPM is a lot lower than yours (driver .30/mile, truck they buy in 500 unit lots at a 15-20% discount from what you can buy, financing they can get for <1/3 of what you get, massive fuel discounts, etc etc).

At the end of the day the people who set the rates are the trucking companies... All of them. The cheapest guy has set the price. Now you can wait for him to run out of trucks, take the rate he's taking, or pack it in... But you don't get to blame the people finding trucks for how cheap he's willing to run for.

Also how ####ing bad do you have to be at your job to be #####ing about rates right now? Like seriously? Your cost should be 1.25-1.50 per mile and rates are probably at 2.50/mile AVERAGE nation wide. If you aren't making money hand over fist right now you should really turn off the lights immediately. It won't get any better than it is today.

 

Now lets not be getting a bunch of wannabes all excited over the prospect of endless, easy riches out here on the spot market. The national averages for dry, reefer & flat are not even close to $2.50 a mile. Granted, there are some areas out here where someone can book 2 or even 3 times that $2.50 a mile on some long solo 1p&1d runs but circumstance is everything and in some places it's much easier to do than others.

That said there are still plenty of brokers out here offering up really lowball rates even on the hottest of lanes. Hoping and praying they land someone ignorant, business as usual, or at least that's the play they're making. The truth is most wannabes and newbies are totally unprepared regardless if the spot market is any good or not. Not to mention whatever their learning curve may or may not be (because some people never learn).

As far as Amazon goes anyone that thinks it all goes on fedex and ups trucks must not have ever been to an Amazon DC. It would waste a lot of space here to hash out all that is wrong with those comments. Every load I've ever hauled from a broker for Amazon, and there have been a bunch of them over the years, have been way over the top rates. But I only book them during the holiday season. And the direct rates they offer to small carriers are pathetically cheap. I can only imagine they don't trifle like that with a serious player such as UPS or Fedex who themselves also broker plenty of amazon freight out. There are some bad brokers out here to be sure but brokers are not really your enemy.

Trendlines - DAT

as of 8-26-17 national spot average rate for dry van, reefer & fatbed

$1.78 van

$2.07 reefer

$2.18 flat

 

Guys like you are why I try to pay over the going rate out the gate. I'm not looking to get beat up later.

 

I'll take it as a compliment although I know some brokers say that derisively and insultingly at times. I wish I could say my way was always great but it isn't. I just could never find consistency at those marginally better than typical rates that kept me in my happy zone. Or whenever I thought I had it something ended up not panning out with it. There's more than one way to skin a cat out here. Consistency, roller coaster, or something else? Take your pick.

And the thing with Amazon none of those brokers ever lost a dime on any of those loads I booked from them. They took the option I gave them to Amazon and it was either accepted or not. That's how it gets done during the holiday season. And that's also a big reason why Amazon was pushing hard to sign up small carriers direct for cheap. The thing is they will always need those brokers and guys like me....