DRIVER BEWARE OF FREIGHT BROKER SCAMS

if you had a regular vendor for something and every week found yourself suddenly bombarded with phone calls from other prospective vendors of the same product or service offering the same caliber of workmanship @ less than half the price: be pretty straightforward to see overcapacity in that market.


Per your prior response, theres no law against it: if it seems too hard to get your own authority and get direct customers, than it will be.
Customers can send out an email blast to as many people as they like asking for a quote giving the exact same information to all of them, whoever comes back with available capacity at the cheapest price wins.

I bid against brokers often enough, they are not keeping the lion’s share, that I see. They tend to undercut me by 30 to 50% on a regular basis, and then take their piece before the carrier gets the rest.
Can’t blame them on the one hand, all they can really sell is alleged capacity (as they have to go find a truck at whatever rate they deem acceptable) and really, price. They can’t guarantee what I can: but most customers don’t need or even want what I offer- so why would they pay more?

 

It’s a sad day when actual carriers are hijacking loads then claiming someone impersonated them and they have no idea who it was.


Looks likes times are getting tough.

 

There's no law against customers not using brokers. In fact, there are a good many who don't, or at least say they don't. I can no more verify that than you can from a simple phone call. What we offer, as @Ruthless notes, is capacity, price, and a specific service. In my case, I free up a number of man-hours for my customers. My sole job for them is to provide them with the arrangement of freight, where otherwise they may have to hire someone to do what we provide for them, or spend a significant portion of their time doing it when they have other work that needs to be done.

Just a simple example: suppose you have a freight spend of $300,000 over a year. Assume your broker is taking 15%. That's $45,000. That's still generally less than what you'd pay for an employee to do the job before you factor in benefits.

 

I am not necessarily talking about getting my own authority. Just someone creating a platform for shippers to post their own load and negotiate directly with the trucking company. Nothing I don't think, will ever completely eliminate brokers. And as @PPDCT pointed out, some shippers just don't want to pay someone for all that time it takes to secure all that transportation.

 

Shippers that post their loads are looking for the lowest priced carrier. There's been "shipper only" load boards before, I'm sure there still are.
Shippers that send out blast e-mails to brokers are also looking at the cheapest one.

 

Shippers don’t want to deal with hundreds of different drivers to get their loads moved, that’s one of the reasons they use brokers. Back in the day shippers used to have a traffic department and there’s a reason why they went away.

When I was driving for my old boss in the mid-2000’s one of the lumber companies had their own traffic department. After a while they got tired of trucks not showing up for one reason or another that they went to a mill direct truck list for the maxi (over 60k payload) loads that had 4 or 5 companies on it and once a week they sent a list of all their regular truckload loads going all over the country to CH Robinson to let them deal with it.

 

My first round of advice to our baby brokers that stick it out through training: "Don't fall for the lumber/steel mill/drywall/etc commodity list email blasts. That way leads to madness and hours upon hours wasted."

I'm about 25% successful in getting that message across. Most of them have to learn it the hard way.

 

When you call and the first thing they say is give me your e-mail and we'll put you on our list, hang up and move on.

Some get so excited that someone actually talked to them, it goes to their head. LOL

 

Took the words out of my mouth, lol.

My favorite still remains Powder River Cattle Equipment. They had a colleague and myself on an email list- the convo didn't play out quite like that, but we figured it out pretty quick- where it was 1 pick outbound with six drops scattered across half the western US, and their set rates were like... 1.45/mi for a load that'd take someone a week to do even if it were relatively well lined out. I took one look at the first time their shipping gal sent one out, did the math and just started laughing. They were a running joke around here for a while.