How do brokers justify 30-50 % percentage

And the sad thing is that a LOT of drivers believe the bs perpetuated in this thread by those who really have no clue at all. The lunacy that would allow anyone to believe that the margins are like that is just another example of the failure of education to truly educate. The biggest roadblock to success that many face is the guy they see in the mirror......

 

Here are some people who still think that everything is happening with the rates is a direct result of the market.
Look, I’m a 1 truck fleet . I’m 100 % independent. Last year sometime in November I was hauling loads for about 5- 6 dollars per mile , in some cases .
Here is the story. For whatever reason I started talking with this X Broker from a big brokerage company. He advised me to save my money ( weird ) . He told me that since they were having so many issues with a bunch of new carriers, such as late arrivals , damaged merchandise, and bla bla bla , at the beginning of 2019 . They agreed (brokers ) will pay no more than 2 dollars per mile at least for about 2 years or until the “ bad apples” chock to death and disappear. Basically, he told me that they will clean up this industry by lowering the rates and the carriers who are going to survive are going to be the ones who care about their business.
I DID NOT BELIEVE HIM . So, what do you think ? Proof???

 

Um, if you got it in writing or recorded it could be a starting point, but one broker setting an internal rating policy doesn't equal price-fixing. Again, you don't need to price-fix to take advantage of how many people started driving because word got out that trucks were getting $5 p/m on spot. Problem comes when you a) have more supply in trucks after the gold rush, and b) less demand in freight due to macroeconomics/trade policy/etc. So yeah, the market will squeeze out the carriers that overextended, and all of that can and is done without any formal collusion.

 

This only makes sense if it wasn’t an across the board drop in rates. I’m a specialized carrier and have seen a significant drop in rates. Mainly because there is a significant drop in volume. When there is a drop in volume people get scared and scramble. They then take whatever they can in hopes to keep cash flow up and possibly find a better market.

 

We knew rates were heading down around Sept last year and that a gazillion new trucks were coming on the road. So, it can be predicted that rates will decrease and squeeze out the new, weak, or whatever trucks. It’s a simple supply vs demand situation and has nothing to do with price fixing. Even if a few huge companies decided to try that, the industry is so massive it wouldn’t work IMo.

All you have to look at is available trucks vs available loads over the course of a few years to see why it rises, why it hit a ceiling, and why it’s falling.

He said save your money because he saw it coming.

Edit: If the “elite” folks pulled strings like that then why would they ever decide to make rates 5 to 6 a mile? Doesn’t make any sense.

 

No need for the bold lettering. We can see

 

Sorry, I’ll make sure I will not do that anymore .

 

I got into the brokerage business, did not do a lot with it, but I thought it would compliment the trucking side. I cantell you guys it isn't a bunch of roses trying to broker freight and deal with both sides, shippers are fairly easy once you build up their trust, truckers are a PAIN until you get some that builds up your trust, but then the ones you know and trust are not always available.

And here is another thing, at least twice I have used companies to haul certain freight, both cheap out of bad lanes, and when the shipping contract came up the carrier (different ones) have bid the contract at a price lower than what I was paying them. That is right, not only did they haul it for less than what they were already getting paid, but they left my little 5 to 8% on the table, did they really think I was dealing with it for nothing, or was going to cut my own throat.
Their thinking is now they have it all, and if they don't have a truck in the area then they can broker it out.

Another thing, is a lot of brokers you deal with are agents for a brokerage, not brokers. They work on a set percentage, usually around 8%, the brokerage gets the rest. Unless their policy has changed CH Robison requires their brokers to charge enough that CH gets at least 10 bucks a load, you heard right, they will book loads that they will only clear 10 bucks on, the brokerage itself is just like a mega carrier, they work on volume as much as percentage.
Another thing, that agent you deal with is on the hook for any shipment that the shipper does not pay, and yes it happens. The brokerage pays the carrier, but after so many days the pay is deducted from the agents pay. There are no guarantees in any part of this business.

As far as shippers not knowing the lane rates, it takes a shipper with stupid people over the shipping for that to be true. I have hauled freight moving companies, strictly because they move their business to cheaper shipping lanes, either for the product they make or the raw product they have shipped in.
Business is business, and they all are trying to make a buck, some are just better at it than others.

In the end, it is truckers or rather trucking companies that set the rates, not shippers nor brokers.

 

For the same reason you can buy a box of theater candy at Walmart for $.98 and have to pay $4.00 at the entrance to the movies. Supply and demand, free market, capitalism, call it what you want. Unless you want the politburo to set the prices for you....

 

I would almost agree with you, but unfortunately a brokerage by the name of TQL is guaranteed hitting these numbers. They are ruthless (but in a respectable way), and I can easily see TQL training all their agents, easily clearing 30-50%, heck probably even more, just based on how cut- throat they are.

I'm certain that each high schooler or college graduate they hire goes through A RIGOROUS about of training and scenarios so they always give polite yet borderline offensive rates and comebacks to the Carrier on the phone.

Truth be told, I can't blame TQL for what they do, since they are just playing the game, albeit at a very high skill level for they type of negotiating they do. Trained to prey on the back-haulers and desperateers that call on their loads. Playing dirty tactics regarding layover and detention, constantly passing the buck hoping you will give up and forget about it. . All with a nice chewing smile on there face.

Just like them, I prey on the last minute 3pm-5pm game on just about every load I haul. Got forbid the first thing the broker ask for my location when they answer my call. I have trained myself to smell the desperation in their voice, the urgency in their words. Once I smell blood, I go in for the kill. It gets even worse on Friday evenings.

And heaven forbid I see a load that needs to get saved at 6pm-12pm at night, because a truck broke down or fell off a load, and I just happen to be empty. It's a borderline pig slaughter for me. Many many times, I will quote them rates at $5-$8 per mile. And many many times they will be near my number, depending on how desperate they are.

There is a reason TQL is the second largest brokerage and been around just a little over 20 years.

There agents are trained to be shrewd, ruthless, cut throat, straight up offensive, yet extremely polite negotiators. Probably the best in the industry if you ask me.