Brokerage questions

Discussion in 'Freight Broker Forum' started by Dino soar, Oct 1, 2024.

  1. Dino soar

    Dino soar Road Train Member

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    I had a few questions about how a brokerage actually operates.

    When you approach a customer, how does that conversation go?

    I assume they have a commodity that needs to be moved from here to there X number of times a week and for that type of a situation you give them a contract rate along with fuel surcharge, for some period of time?

    I'm also figuring that a great part of your expertise and critical knowledge is that you know the rates for whatever commodity or trailer or area or Lane that is requested and you not only know what the carrier will do it for, you know what other shippers are paying or you know the going rate let's say.

    I suppose there are situations that you have a customer that maybe just needs one load moved or maybe you are on a list of Brokers when they have excess loads to be moved?

    How does that work?

    I know at one point I was moving loads for a broker that told me they rebid the load every week.

    I don't know if this is ever done or if it's a completely ridiculous thought, but does anyone open a brokerage and hire an experienced agent with a full book and perhaps pay them a little better than the average split or however that would work to immediately grow the brokerage?

    Aside from someone opening their own brokerage, does anyone have any information on being an agency like you are with landstar? I'm wondering about fees and common problems.

    I understand brokerage can be complex and there's a whole financial situation with it and I'm sure there's all kinds of things about it that I don't know.

    That's why I'm gathering information here.
     
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  3. JimmyTwoTimes

    JimmyTwoTimes Medium Load Member

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    A lot to unpack, I'll try and get some thoughts here on this. Crazy day (when is it ever not in transportation) so excuse any scattered thoughts or random capitalization

    . When you approach a customer, how does that conversation go? - Assuming you are asking about cold calling shippers, more often than not those conversations go poorly. "We are all set we dont need any help" "I get a dozen calls just like this one, please take me off your list" "Everything is routed by our customers or vendors" "We have our own fleet" There are way more rejections than successes when selling, especially in freight brokerage because its heavily saturated and we are in a down market.

    I assume they have a commodity that needs to be moved from here to there X number of times a week and for that type of a situation you give them a contract rate along with fuel surcharge, for some period of time? - Sometimes that's exactly how pricing goes, but not always. Some customers quote out every move to 50 different providers. Some also quote every move but only to a few providers. Some use a bid board through their TMS that brokers and carriers can log onto to bid on loads. Every customer is different, understanding how they do carrier selection and why they do it that way is part of being successful in this space.

    I don't know if this is ever done or if it's a completely ridiculous thought, but does anyone open a brokerage and hire an experienced agent with a full book and perhaps pay them a little better than the average split or however that would work to immediately grow the brokerage? - I don't have a ton of experience in the agent space, so no comment here. I will say that often times shippers don't just do business with the person/point of contact, they do business with the company, especially larger shippers. E.g. they get to know how your AR team operates, that your company has strong financials and will sign agreements that make the customer feel comfortable. Some of that may not be easily transferable.

    Again, I don't have experience regarding being an agent, I believe it's not uncommon for a 60-40 or 70-30 split on margin (with the lions share going to the agent), and the parent company just supplies access to the TMS and maybe some compliance and payables help, everything else is on the agent.
     
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  4. Dino soar

    Dino soar Road Train Member

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    Thank you that's very good information.

    Without revealing anything about yourself, may I ask are you an independent broker, or what exactly is your role in this?
     
  5. JimmyTwoTimes

    JimmyTwoTimes Medium Load Member

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    No problem, happy to help.

    I run a branch at a medium sized (500-600M) brokerage, but I started in this industry as an entry level employee and have worked in both carrier facing and customer facing roles (both as an individual contributor and a leader).
     
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  6. Dino soar

    Dino soar Road Train Member

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    If there's any advice or information that I should read, etc that would educate me more on this, please let me know.

    I am very interested in becoming a broker. I think there are times in a person's life that they think about this or consider that and it's just kind of something in their head. And then there comes a time in a person's life when they just are ready for whatever that is.

    That's where I am with being a broker. I realize getting started is 6 months to a year of making a hundred phone calls per day, I realize the phone could ring 24 hours a day with problems that I need to solve. I realize the day can be busy and stressful and perhaps multiple catastrophes happening at once, I realize it's 98% rejection on the way to paradise.

    But I think the reward is worth that. And maybe even more importantly than that, the talents and abilities that I have would be well used and challenged being a broker.

    That makes a good career for someone.

    I can tell you I have no interest whatsoever to buy more trucks and build a fleet. Honestly if I really want my own Freight I'd still have to go bang down a ton of doors to find it, not as many, but still. And I'm not interested in all the overhead and all the legal exposure and drivers and repairs.. and there's just a bazillion reasons I have no desire to go in that direction.

    At any rate if there's anything you can tell me about how the brokerage industry is structured or broken down or different jobs within it, or different aspects of it different ways that it works, whatever you think is pertinent to share, I appreciate it.
     
  7. JimmyTwoTimes

    JimmyTwoTimes Medium Load Member

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    If I were in your shoes and were looking to get into brokering for the first time, I'd try and hire on with an established broker for at least 6 months (probably more) to get a feel for it and learn. You can learn the ropes and at the same time get a sense of whether or not you will actually enjoy the day to day of the job. Once you feel like you have your feet underneath you, you can make the decision on whether or not you want to open your own brokerage or become an agent for an established broker.
     
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  8. 86scotty

    86scotty Road Train Member

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    I think of questions to ask brokers all the time since I probably talk to more of them than I do truck drivers, actually a lot more.

    First, do you guys ever get any time off? It seems like big money is lost if you aren't there to answer the phone every day 8-5.

    I know the thing I've always been curious of, that may have changed a lot since Covid, is what percentage of you guys actually working in office vs. remotely or home? I realize this would also very based on whether you were actually a broker or a broker agent/phone rep.

    Personally I've always thought I could really get into the job and succeed if I could do it remotely or from home, but if I had to start as an agent in a cube somewhere I would likely never try it. I can sell, I can speak and I can communicate. I know this has made me a successful owner operator, or as successful as I want to be in career number two, but these aren't really the skills that most typical drivers need. Once again, I'm just using myself as an example from my short few years of being in the business and talking to a lot of brokers.

    I enjoy closing the deals a lot more than living on the road day in and out. It also seems like a logical transition for an older professional driver with a lifetime of experience in this field.
     
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  9. JimmyTwoTimes

    JimmyTwoTimes Medium Load Member

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    Good questions Scotty. See below.

    First, do you guys ever get any time off? It seems like big money is lost if you aren't there to answer the phone every day 8-5. - It depends on the setup and comp plan on how heavily you are impacted on making money when you take time off. Most companies try and find a way to back people up so that you aren't completely screwed for taking time off. That being said, there are definitely roles/companies where if you aren't there putting freight on the board or covering it, you are only making your base which usually isn't anything to brag about.

    I know the thing I've always been curious of, that may have changed a lot since Covid, is what percentage of you guys actually working in office vs. remotely or home? I realize this would also very based on whether you were actually a broker or a broker agent/phone rep. - This also depends on the company, but most brokerages I know of (including ours) does 5 days a week in the office, maybe with a few exceptions for high performers.

    I enjoy closing the deals a lot more than living on the road day in and out. It also seems like a logical transition for an older professional driver with a lifetime of experience in this field. - It definitely could be a good transition. Understanding the challenges of driving any particular load can be helpful and would definitely help you talk the talk when talking to shippers and carriers. The tricky part might be learning things like sales technique, or understanding more of the back end on the shipper side (e.g. what TMS do they use when routing their shipments, how do they deal with claims, whats their preference from an update/reporting/tracking stand point, what KPIs are important to them, and do they track those numbers themselves, etc)
     
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  10. wichris

    wichris Road Train Member

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    Other than the people that handle the customers for our own trucks (and broker the excess) we only use remote agents.
    Strict commission (70/30) We will help cover if they take some time off.
    For years had a agent that him and his wife traveled around the country in their motorhome. He did it all on the road. Worked fine for him.
     
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  11. JimmyTwoTimes

    JimmyTwoTimes Medium Load Member

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    This is cool, I've always been fascinated with the agent route of freight brokering. Chris knows a lot more about this side of the business than I do.
     
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