“The brokers make too much”

You forgot the part about Broker pays carrier in 30 days, shipper pays broker in 90 days, can you float the shipper?

 

or a broker can post the load and let carriers fight over how much they want the broker to make. Win win don’t you think?

 

Who wins in a race to the bottom other than the broker?

 

If brokers weren't necessary, they would've gone out years ago. They provide a necessary service for carriers that aren't willing or able to seek out direct hauls or shippers that don't want the added expense of running their own trucks.

What the shipper pays the broker, or how much the broker "makes" is not my concern. My concern is the rate I agree to haul it for, being paid timely and not getting ripped off. I'd much rather see carrier's insist on getting paid net 7, as opposed to net 30 or 60 or 90, but as long as carriers agree to net 30, it'll keep on as it is.

Carriers indebted to their eyeballs, making continuously bad business decisions, one step away from going bankrupt, are mostly the ones that agree to haul cheap freight. They really have no other choice as they've backed themselves into a corner. Spin it any way you want, but carriers that agree to haul cheap freight only have themselves to blame, not the shippers & not the brokers. As long as there are carriers that keep agreeing to haul cheap freight it'll keep on as it is.

If you think about it, carriers have the upper hand here as without the truck the freight doesn't move. Should the cost to move the shippers freight prove too high, shipper's will either chose to move it themselves or adjust the price of the commodity to reflect the offset of the increased rate to move it.

Bottom line though, as with most things in business, it ultimately comes down to supply & demand. The way I see it, guys that have consistently operated in the black, along with having little debt will likely make it through this bad time, provided the economy hasn't been thoroughly destroyed and can recover, but I digress....

 

It is as simple as you say. New people should learn from this and not overthink things.

 

Those of you who take brokers side and let them have free reigns in the spirit of free market values. That's fine but do not come here and criticize those approaching your customers and undercutting your bids either. Neither you say anything about those who run for 1.30 c per mile now. It is their call and none of your business to know how they manage that.
You cant have it both ways.

 

I dont agree that the government shouldn't do bailouts. Not everyone is working right now so what other way can they keep people spending money? The fact that the economy is taking a punch right now has a lot to do with cheap rates. Products aren't moving at a fast rate so there will be more loads sitting around. Farmers have to dump milk and let crops rot out because of over supply. Giving the bailouts ain't really a bad thing, because it will give the economy a shot in the arm. It isn't really good for the long haul, but neither is a bad economy so that's why they are desperate to open things back up. As reckless as that is, they want to send people back to work to avoid recession

 

That is a very retro way of thinking. Uniting truckers ain't going to work. This is 2020. If a driver goes home because he cant get a fair wage or price for the load, so what? The load gets moved. It is unrealistic in this day and age think that 5 million drivers will go home for 72 hrs and the country will panic. Truck drivers really have no power anymore, hell workers in any industry really have no power.. only the big money people or companies have the power

 

I'm not on the brokers side Joe. Au contrare, I'm on your side brother. There's nothing better I like to see than the small carrier or O/O make it. That said though, the facts are the facts.

If someone undercuts the rate that I need to haul for, so be it, that's something I'll have to deal with. Does it suck, oh yeah. I see it all the time in farming. There will always be someone that'll undercut the price on what I'm selling, whether it be hay, strawberries, produce, piglets, broilers or maple syrup, particularly if the supply greatly outstrips the demand. I get the best price at the beginning and at the very end of the growing season, why, low supply for great demand.

That's just business. I can either adapt, diversify, or go under. An example, a few years back with the swine flu problem, piglets were in real short supply, but the demand was still strong. I did real good selling them for a couple years. Then, because the price was up and everyone got back into raising them again, the price tanked, same thing happened with beef and eggs. So, I gave 'em up for while because it wasn't profitable for me to keep doing it. What I'm saying is trucking is no different than most any other business in a free market economy.

You're right, what rate one chooses to run at is entirely their decision, not mine, not the brokers, and not the shippers. For many different reasons, your CPM may be way lower than mine, which allows you to haul for a cheaper rate and still turn a profit; however, right now there are just way too many trucks competing for too little freight.

Bottom line, only the strong & savvy O/O will survive. Does it suck, yeah man, but that's the way it is....