Are Freight Brokers Slowly Disappearing?

I doubt it cost them anywhere near what it would to have employees on staff. Plus insurance and benefits. Not to mention they knew exactly what their shipping costs would be and if CHR made or lost money to move the loads it no longer affected them.

 

It would likely benefit the trucking industry as a whole if quick pay and factoring and fuel advances all went away.

 

Layoffs And Bankruptcies Pile Up In Logistics Amid Shocking Downturn | ZeroHedge

 

As someone who has sat in on all 4 sides i.e shipping, brokering company owner and driving. Brokers exist for a reason. Could there be better systems and controls in place? Absolutely! Do i have any idea how it could be better? Not one #### clue that would be practical. What ive found with brokers is they exist because companys trying to deal with companys to ship gets to be a chore and quite expensive.

If your a shipper and you want to go off script and hire someone directly you run into a lot of risk. Will he take your cargo? Will he deliver it on time? What recourse do you have if he does? What if he damages stuff? What if he just vanishes? What if the driver has a heart attack? What if he never shows up? These are all issues a shipper needs to deal with. A trusted broker acts as a first line of defense against all this #### and gives me some security incase things go tits up.

Ontop of that you need to interview potentially dozens of trucks for each load. Its rare you have a standard once a week load that runs like clockwork. You usually end up with a ton of individual loads for materials when a bigger then normal load comes in or someone orders a huge amount of whatever you make and so on. If the companys did that you would have massive staffing issues at each one just from how much time it takes. Hell the few times i had to go off script because our brokers didnt have drivers was a nightmare. Usually took an entire shift to book a single load and half of those didnt work out well.

When i worked under a broker i did most of the interviewing and such and there are a LOT of deadbeat drivers out there. It was am all day and often all week process to properly vet companys coming on. Everything from ensureing all their paperwork was actully legal and that the trucks werent death traps and all kinds of other nonsense. I never have BEEN a broker so keep that in mind bit even with me and two other guys my boss at the time was nearly always run ragged trying to manage over 400 trucks and two dozen companys while keeping everyone from murdering the #### out of him. In at least one case likely literally.

As an owner my problem is the reverse of a shipper. Same questions but how do i ensure i get paid? A trusted broker as mentioned is a layer of protection between me and a piss poor customer. It ensures i have a first layer of defense and if i trust the dude and he gets me good loads. Then im not spending days/weeks/months and tons of effort time and money to get paid when a deadbeat goes deadbeat. You see guys on here every day who have gotten screwed begging for help. A good broker ensures thats unlikely to happen. Sure hireing on to a specific customer and doing 100% lf your work on one good paying load is every O/Os dream but there just arent that many of those gigs.

And finally as a driver. Driving 12-14 hours a day then spending 6+ calling around begging for a load sounds like ####ing torture and is going to eat into my bottom line like crazy...at least if i value sleep to any degree.

So unless someone gots a better solution and can inpliment it and make life so much better for us all...brokers aint going to go anywhere.

 

The scariest drivers are the ones that don’t want to learn.

 

You're outsourcing to someone who does the job exclusively, so they can likely do the job better and cheaper than you can in house.

Think about a company like lazerspot - they provide yard trucks and drivers for companies all over the country. They know the capabilities of the equipment, what it should cost, and how to maintain it. They know what questions to ask when interviewing new drivers, they know fmcsa reporting requirements, etc. Most importantly they have the ability to find coverage for when the yard guy calls out.

Could the company bring all that in house? Yes, but it's going to cost more and they'll be less effective. Same thing with IT services, janitorial services, and a host of other things that aren't the core business.

And eliminating brokers won't eliminate the shady stuff that brokers are accused of.

 

No different than all the Companies going under. The markets flooded with too many Brokers. A Trucking Co. with a separate Brokerage to handle excess freight, or to book loads for their Trucks is very different than a Brokerage that only acts as a middleman. They’re a result of all the One Truck operations that only use Brokers. Both have always been around. Myself included with one Truck for the last 19 years. The Industry has become flooded with both. Over the last 25 years, since get loaded.com load board was created. A cheap alternative to DAT. Everyone figured it out. Even a dumbasss like me. Newer technologies has made getting authority and booking loads much easier. A whole new Business model has emerged. Right now, a single Truck OO is being treated as an employee by Brokers. It will change. When less Trucks are available to them. And when less Brokerages are operating. More freight going into the larger companies as contracts. Same freight gets posted on Load boards by Trucking companies needing help, and they usually do. Once this happens everyone will be better off. New Business model will still be in place. Hopefully the power will shift back towards the Trucks. It will never be like it used to be though. Always be plenty of single Truck O/O’s running Broker loads only. It’s no longer worthwhile IMO. Doesn’t mean others agree. Just not for Me anymore.

 

From some of my past posts in this forum, you can see what I once thought about brokers until relatively recently. Yes, they are irritating. Sure, there are bad ones. I still give those folks crap. BUT! Reading the broker forums on Reddit is where I learned a lot. I mean, a LOT. For the most part, truckers and brokers are in the same boat. I no longer hate ALL brokers because they're brokers. Only some...like Uber, TQL, now-dead Convoy with RXO fast closing in on being added to my overall list. There are some I love running for, as well.

To be fair, not everyone going out of business are bad businesses or people. Supply for freight is offset by demand by too many trucks right now. In fact, I would contend that quite a number of bad folks and businesses will survive this simply because they pay 1099 for W2 work as well as a well thought out Leasing scam. THEY will stay in business even of the same tractor/trailer has 10 drivers paying over the course of any given year.