Brokers, Please explain the plummeting rates these days.

Discussion in 'Freight Broker Forum' started by BigMoose, Jun 8, 2022.

  1. RubyEagle

    RubyEagle Medium Load Member

    632
    783
    Apr 17, 2010
    0
    I believe l saw Uber Freight doubled their profit last quarter. Must be nice l wonder how!
     
  2. Truckers Report Jobs

    Trucking Jobs in 30 seconds

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

  3. JimmyTwoTimes

    JimmyTwoTimes Medium Load Member

    366
    911
    Aug 23, 2019
    0
    This is a bad example. Uber Freight has always been massively unprofitable, and their recent rise to profitability is primarily driven by the acquisition of Transplace. They are still waaaaaay behind everyone else in the business, they return less than one cent for every dollar they sell.
     
    RubyEagle and TallJoe Thank this.
  4. The Crossword Trucker

    The Crossword Trucker Road Train Member

    1,172
    2,326
    Feb 21, 2015
    0
    Really? I thought the whole point was they had very low overhead
     
    TallJoe Thanks this.
  5. TallJoe

    TallJoe Road Train Member

    7,490
    16,268
    Apr 12, 2016
    Chicagoland
    0
    With their "do it all in the app" model and all their call centers moved to cheap labor countries, I'd expect the overhead to be the record small as compared to other players of their size. They don't seem too bad with freight acquisition either. I don't understand why they were making losses for so long.
     
    JimmyTwoTimes Thanks this.
  6. gentleroger

    gentleroger Road Train Member

    6,982
    18,484
    Jun 1, 2010
    0
    They got the freight by bidding below cost and subsidizing the rate out of their own pocket.

    It's the same thing they did with their passenger division. Offer rates far below cost to the passenger and pay the driver out of their own pocket to build a customer and driver base, then slowly start charging the customer more and paying the driver less.
     
  7. RubyEagle

    RubyEagle Medium Load Member

    632
    783
    Apr 17, 2010
    0

    Thanks for the info. I thought mabye it was charging shippers $6+ a mile and just paying Carriers even less. The app can be addictive l found. Now you have a whole subset of Carriers that never make one phone call. They just just click and go.
     
    JimmyTwoTimes Thanks this.
  8. JimmyTwoTimes

    JimmyTwoTimes Medium Load Member

    366
    911
    Aug 23, 2019
    0
    Gentleroger nailed it. Rather than developing a strong carrier base and training or hiring a team that understands the industry and how to add value to both shippers and carriers, they just charged stupid low rates (regardless of cost to the truck) and gathered huge market share that way. They've started to make some changes there, but the real reason they are finally making a small return on their massive amount of freight sold is that they acquired transplace which was always pretty profitable.
     
    TallJoe and gentleroger Thank this.
  9. JimmyTwoTimes

    JimmyTwoTimes Medium Load Member

    366
    911
    Aug 23, 2019
    0
    No problem. And long term they've definitely impacted the way freight brokers will work with their carriers. Many large brokers are identifying ways they can provide their carriers with a "book it now" option to book a load.
     
  10. gentleroger

    gentleroger Road Train Member

    6,982
    18,484
    Jun 1, 2010
    0
    "Why build a business when you can just steal it?" JP Morgan paraphrase.
     
    JimmyTwoTimes Thanks this.
  11. HardwareHyena

    HardwareHyena Light Load Member

    138
    138
    Nov 17, 2011
    Depew, NY
    0
    Anyone try Uship and get paid?!
     
  • Truckers Report Jobs

    Trucking Jobs in 30 seconds

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