Brokerage bonds?

Discussion in 'Freight Broker Forum' started by phroziac, Aug 1, 2009.

  1. phroziac

    phroziac Road Train Member

    3,138
    502
    Jun 16, 2009
    Gary, IN
    0
    a "lot" of freight sales experience? what do you consider a lot?
     
  2. Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.

  3. _ton bundle

    _ton bundle Road Train Member

    1,230
    936
    Jan 7, 2009
    Elevator Bay, Minnesota
    0
    Probably a few more than 2 loads to get to $10,000, unless you are hauling high value, OD cargo or coast to coast. Probably 5 to 10 loads depending on commodity, length of haul and the price of fuel.

    The best way to figure that out is to work backwards. The average broker (according to ITS 2008 Broker survey) keeps about 12-16% of the revenue of a load. Taxes, insurance (contingency cargo and personal health, etc.) and overhead will eat up some of that. You may do better or worse than that, but you'll probably be on the low side of that starting out. So maybe you can clear $10,000 for every $100,000 worth of revenue that you take in. So you probably want about $500,000-$750,000 in 1st year revenue to scratch by.

    So the short answer is you need enough freight sales experience to convince customers to leave their current carrier or broker and ship with you, a startup broker, for $500,000 to $750,000 worth of revenue. Remember that if the shipping manager decides to ship with you and you can't move the load, he may lose his job, so changing carriers is not a decision that most make lightly. They have to trust you implicitly. I would say that if you don't have $3-4 million in current sales with an established carrier or brokerage, you are not going to be able to get $500,000 in revenue for a startup.

    Of course, you also need to know current rates for your lanes and commodities. How does produce season impact rates in your area? Construction season? Fiscal month end/ year end? Freezables? Etc., etc., etc...
     
    Working Class Patriot Thanks this.
  • Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.