Can I Make The Brokers Be Transparent?

I agree most brokers try to make as much as the truck owner. With that being said I do realize brokers have expenses too, probably the exact same expenses that I have in my business. I also have an office to pay rent on, power, water, etc phone lines, Internet, several different load boards and overhead of paying office workers, drivers and etc. but when you compare apples to apples is it fair to say he should make the same amount on a load ? Who cares as long as it is a fair squeeze for the owner of the truck. I doubt his over head is as much as a truck, trailer, insurance, fuel and paying a driver $0.45-$0.50 per mile ? Always the same excuses too, well it's because fuel is cheap (my insurance and bank have yet to call me and say "hey man I know fuel is down so go ahead and just send us partial payments until it goes back up"). I have direct accounts that I pull without using a broker, those rates have not changed one bit, why, I'm guessing because they could care less what the fuel prices are or maybe because they signed a contract for X amount ? I seriously doubt the lanes and contracts the brokers sells loads to the driver for has hired a guy who sits in the office for let's say....... ChapMyButt toilet tissue and he constantly searches for fuel prices and daily adjusts the rate cons. Hell no ..... They don't care either it's all some crazy thing a smart business minded broker came up with to make more money for himself. Or the famous I get it covered all the time for this much because it's back hauls for those guys. Well I hate to say it but we don't do "back haul rates" because in my opinion there's no back haul rate fuel or back haul rate truck payments or etc. it costs the same amount of money to go north as it does to go back south ? It's all some twisted things brokers have conjured up to clear more money on their side. All I say is the broker should be fair and allow the truck owner to make a little money too. I know a few that have lied and said man I can only pay $675 on 350 miles even tho it's 43000lbs and -10 temp because I only have $700 in it when they know they are not being truthful. Then I know another broker that says man I've got $900 in it and I'm gonna have to make my cut. I had rather deal with an honest broker, at least he saying this is what I have and this is what u can have it for if not oh well someone will take it or I will go up on rate right before the load has to be picked up. As far as a broker being transparent, I doubt any would be just for he fact it's all about that dollar. Good luck..... Wish u the best, that's just my $0.02

 

Simply put earlier, it's business and we are a capitalistic society. If you don't like the business your in you can change that and. No one can stop you. Brokers can primarily do what they want and you can't stop them. You are not required to deal with them at all ever in your life. As said before it's a free country and everyone can do what they choose, if your not happy change your situation

 

Who said it works in real estate? I've sold 3 homes at different percentages, along with other factors.
There is no set rate in real estate, and neither should there be with brokers or truckers.
It's called a free market and negotiations.

 

Yes, you are right. typically they get about 5-6%, the agency that is. I was wrong about how real estate agents earn commissions. . The carrier's argument is about the brokers not disclosing any information to the carrier about what their commission will be. In real estate, the seller and the agent negotiate a rate that the agency will gain . the value of the commission is agreed upon and then the agent sells the home for the seller.

What is right and what is wrong is really not for us to decide. That is up to a higher authority the FMCSA. So far, they believe in capitalistic free market behavior. If trucking volume slows to a hault , perhaps new regulations will be implemented by that authority. Just like when brokers could get away with not paying carriers or not paying detention. Map 21 regulated a new broker's bond increase to 75,000 and also instituted mandatory competency in brokering, meaning gettting registered and becoming a licensed broker .

I would side with the carrier this manner and believe that carriers SHOULD know what commission brokers are earning. However, morality and ethics in business is often a idealistic unobtainable goal. so there.

 

Compare brokers with sales professionals: that is after all, what they are. They sell their service for as much as possible: and then buy a carriers service for as cheap as they see fit- the margin in between is their profit.

Last time you bought a new car: did you tell the salesman the percentage of commission you'd pay him before the sale? Or did you agree on a price because you knew how many units he had sitting on the lot not selling? Or did you order a custom ride and pay what you felt was the best deal you could get?

If I told you that I get a load from a broker that paid $1500 on 125 loaded miles, 2-5 chains no tarp. Should I say "no I won't take it unless you prove to me you're only making 10%" (or whatever number you all seem to think is fair) or should I take it and take any other offered under those circumstances?

I don't begrudge a broker making money: they have freight that I don't have directly, or in some cases, direct access to.

If it pays me enough I take it.

I don't get to tell my insurance agent that I'll only pay him 5% of my premium as commission, nor the guy that sells me parts for my truck.

I shop around and find the best deal I can for what I need. Then I take the best option.

 

Yes cost of overhead/supplies is always hidden by car dealers and even mechanics. A wise shopper always know the inbuilt cost of overhead from sellers . more than likely, shoppers generally have tools like Kelly's bluebook as a way to negotiate with dealers. And, with mechanics the price of a part is pretty easy to find out.

There is U.S. code that does force a broker to disclose what the contract was between the shipper and broker. IF perhaps more carriers demanded to actually enforce the law, brokers would not be able to hide their commission percentage from the carrier. carriers would actually have negotiating power against the broker.

If you are arguing that there is nothing ethically wrong about hiding information from carriers, I think you are wrong on that point. Whether or not the state of broker/carrier relationships will maintain the status quo, well it's not likely that fmcsa will do anything at this point.

An insurance agent is not really a partner but a seller of insurance. the insurance company pays the agent commission to sell insurance. The buyer is just purchasing insurance.This example is very different form a freight broker who actually offers freight to a carrier. The carrier enters a business relationship with the broker. the carrier is not buying but selling their services to the broker. Yet the broker will not shed light on the commission the broker will make.

A "supposed" business partnership is intuitively honest. Yet, the real world of brokering freight is starkly Machiavellian/Dawinian. That is the real industry. You should begrudge the broker for hiding information, if you are a carrier. Unless, you yourself are a broker.

 

In all honesty--- don't take a load you don't like.

--- don't work with brokers, go for direct customers

---- and so on. I'm not a pissed off guy at the market but one thing for sure is this has gotten out of hand!

What I mean by this is that here is a procedure for me to be able to make money off a driver.

Driver pays $3-5k to get his CDL.
Driver goes into training.
Driver or I put down min 10k for a truck.
Insurance wants 3-5k downpayment for the year per driver.


I'm not going to get into trailer and repairs.

We are very regulated by DOT, police, and so on.

That's almost a 20k investment that goes out of a drivers pocket and a owners pocket.

Meanwhile if I had a brokerage:

I hire a college kid.
Give him $1,000 sign up bonus.

There it is... That's it!

I think broker companies should require agents to become registered once every two years and pay a $10,000 fee for it per agent.

This would weed out all the "fly my night" brokers.

 

One thing that I haven't heard mentioned in this thread (or maybe I missed it), is that the Broker is responsible for paying the Carrier, regardless if the Broker is able to collect from the Shipper. There in lies risk. If the Broker has done his homework he can manage that risk, but nonetheless, he still has risk. If he/she wants to maintain a good reputation with Carriers, and maintain a good credit rating, he/she must pay the Carrier whether or not he/she gets paid. The same goes with the Carrier/Broker relationship. The Carrier has risk that the Broker won't pay in a timely manner, but the Carriers contract is with the Broker, not the Shipper.

This goes on down the line regarding Driver vs. Carrier relations as well. The Carrier must pay the driver whether or not the Carrier gets paid by the Broker.

Furthermore, with some Shippers, the cost of the freight is not as important as the knowledge that they will receive outstanding service, time after time. In this instance they may choose to pay $6/mile for freight requiring no special equipment, but in exchange for that they demand that the Broker never fails to deliver a truck that is in good shape, and on time (both ends), regardless the destination (whether it is a good area to get trucks out of or not). The Broker then may end up paying the Carrier all of that $6 for loads to some locations, or over a holiday, but then is able to move the majority of the loads for that shipper @ $3/mile, and demand the best service from the Carrier.

Trying to regulate this will not make any of us more wealthy, but may make some of us less wealthy.In my mind adding more layers of bureaucracy, while sometimes necessary, is never the most efficient or economically beneficial way to go.
That's my 2 cents worth. Good discussion by the way folks!