Bypassing the Brokers

Landstar when they approached me to move my brokerage business to them.

The brokerage side of my business is set up in an agent type system but I do not give up near what Landstar agents give up and I get all the same benefits.

 

Kind of flip it.

If LS Agent OZR has $400.00 in a load and he gets King Q trucking to move a load for $300.00 leaving a difference of $100.00. LS Agent OZR will get $60.00 Landstar corporate will get $40.00. These are typical maximum percentages they drop lower with higher gross revenue if I remember what they told me if you do $75,000 in gross revenue a week the it drops to 35/65 split and goes down from there.

 

10%-15% is about average

 

i understand that is based upon the price of the load

but it has nothing to do with what you sell the job to the carrier for

 

Given your figures LS Agent OZR gets $60.00 of the $400.00 or 15% and Landstar 10% gross.
That is 25% combined.
Not sure what all they do and are responsible for so hard to comment.
They then have to pay their operational costs.
Even so 25% is a long way from 40%.
I also assume on average the "brokers" cut is lower.
Where I am from 5% to 10% is about average for brokers to make.

I however have charged 2000% more than I paid on one job on a specific occasion.
This is after I paid the trucker 6 times what he quoted.
The principal client sent me a letter of gratitude as I had saved them 50% on an expensive move.
Everyone was happy.

 

You guys are getting lost in the rhetoric. LS Agent wasn't trying to provide meaningful info, he was just making a clever sales pitch where he paints a picture of a shipment going horribly wrong and kind of insinuates that if you hire carriers directly this is what is likely to happen, then he throws out some CSA rhetoric. The idea of the sales pitch is that the person being pitched probably doesn't have a complete understanding of CSA, so now they feel real uneasy. thinking, "this is over my head", etc... then LS Agent proceeds to mention how LS has teams of people working behind the scenes and perhaps other brokers don't, and certainly drool-headed independent owner-operator's wouldn't have a clue. So now this shipper has a mental picture of trucks flipping over, has some kind of mental association between that and CSA data, and the sell is that Landstar is on top of it all and no one else is.

Landstar is a fine company, and LS Agent is a fine salesman. But in the real world, anyone can check CSA scores. And for the shipper, the main thing is if the load is properly insured. Landstar's "shield of protection" is actually my insurance that I pay $700.00/month for. And my safety rating which I am constantly protecting by inspecting my truck, keeping my driver file, drug consortium, log books, annual inspections, etc... up to date. Yah, thanks for selling my time and money as YOUR "shield of protection". I appreciate that. Someday when I am a super awesome businessman, and not just a drooling truck-driver I'll find a way to sell hundreds of hours of your hard work and thousands of your dollars spent to someone as if they are getting that value from me.

 

All I can do is roll my eyes... You are so off base its gotten comical.

 

So do you guys think if LS-OZR gets $1,000 from a shipper to cover a certain load that you could go in there and get the same load direct for $1,000? The shipper knows what he pays LS-OZR and when a small time operator comes in if that shipper decides to use them they will pay less because they are looking for value. It's like somneone with real estate for sale who decides to FSBO they almost always leave money on the table buy not hiring a professional to market their property. Or the accused who decide to represent themselves who always end up
in jail because they "hired a fool for a lawyer". Now this is not to say that direct is bad or anything of the sort. But it's not cut and clear always more money or always the best thing. There is value in what brokers do. Many shippers don't have time to ask a dozen fickle owner operators if they can cover a load, so much easier to hand it off to an agent with access to capacity that can cover it no sweat...

 

Gheez, drink the kool-aid much rollin' ? I don't know who exactly is supposed to be the person representing themself in court in your analogy. I can assure you that most shippers and motor carriers are real life honest to goodness transportation professional's capable of handling shipments. It's kind of what we do, eh ?

If brokers are the ones who cover loads "no sweat" as you say, then why is it many of the loads I haul for brokers are all screwed up, somebody didn't show up, they sent the wrong equipment, was supposed to ship yesterday, etc, etc... before I even get there ? Now, why wouldn't a shipper getting this kind of service from a broker want to contract some carrier's directly ?

 

Because it would be even more screwed up. Who do you think the broker gets the majority of their information from?