Building a Better Broker

We have been talking with a couple companies that we have relationships with both on direct shipping and on the farm side. One is expanding and consolidating trucking operations. I have been talking with the person that was hired for this task for some time.
Fast forward through all the conversations and we are at a place that if we set-up a brokerage business we can be the primary broker for this company.
Besides just being someone working with brokers I have done a lot of research. Honestly I am amazed at the number of brokers that could care less about fiduciary responsibilities as a broker. I knew some are bad but this is wide scale.
Highlights of business model:
- Flat fee, no starting out looking for someone that will haul it cheap. We have the rate from the customer and reduce it by certain fixed amount. Several factors will play into this including how long it takes for payment, level of coordination (setting appointments, level of tracking, how invoicing can be processed, etc).
- Pay with-in 21-days regardless of delays on when we receive our payment (plenty of capital to do this).
- 2% Quick pay
- Stream line paperwork
- Proactively monitor carrier status
- True carrier approval process. Not some random “in business 3-months”. Will conduct interviews with new O/O’s to get a feel for them if no information is available
- Pass through 100% accessories.
- POSTING RATES ON LOAD BOARDS
What are your thoughts? Something else I should be doing or not doing?

 

Thanks but not really an issue for a couple of reasons.

First, with one of my main customers it takes weeks to get approved to carry and they have some tough insurance requirements. Add that getting to the correct person would be next to impossible. Then, from our farm business we are a large customer. Loosing millions compared to taking a chance on a small piece of the business is not going to happen.

The other main customer does not take new brokers or carriers once the shipping season starts. They are far to busy to spend time on this. Maybe the following year but they have been doing this a long time and have a good feel for doable rates. They don't take the lowest bid if they think it is not doable.

Second, remember, I am a carrier and understand the tricks that are played to finded direct business. The only direct business I have been able to get is when the customer is not happy. Also the amount that I would be taking to cover my low overhead would not be attractive to most brokers. And I have been making it a focal point of what my business is about. Everyone that I have talked to does not like the way brokers work with rates. But feel it is how the game is played. Doing it different sets me appart.

Would love to see some of these brokers faces when asked if they will provide a list every month showing what was paid to the carrier.

 

And I am not going after business that is all about the rate. Actually, the rate needs to be fair but is really at the bottom of list of concerns.

If they are just shopping rates then they are not my target customer.

 

110% agree. Being fair to the carrier and doing what is required by a broker for the customer on the other side.

I sat in an office last Friday and the customer started pulling out documentation on carriers with bad insurance, farm plates vs. commercial plates, no authority, double brokering and on and on. And not just from one broker but several.

And then rates - a very large broker they used would ask for additional money every 3rd or 4th load. This happened for months. Then they started talking to drivers about rates. Then they exercised a clause in contract that allowed for audit of rates with the brokers corporate office. Even on loads that they asked for additional monies the broker would sometimes be making more than the carrier. And they do not have a load that goes for less than $1500.

 

Yeah I understood that. Just backing it up. Would only worry me if I was looking to be one of the dirt ball brokers.