How do brokers justify 30-50 % percentage

When I used to help my brother do freight brokering, he'd always offer good CPM into florida, but crap on the way out. His logic, rightfully so, is there is a lot coming into the state, but not a lot going out, and some drivers were just looking for at least enough to make it worth their while to get out here to another load, vs dead heading on their own dime. He as able to under bid with the shippers over most megas on the FTL, but not so much on the LTL loads. He tried to avoid those like the plague.

 

"They find freight you aren't willing to find and offer it to you, they solve problems and God forbid they make a living at it."

Very good point!

So, you believe that 90% of brokers are incompetent or cheats?
Ah baloney, they provide a service. You, as a carrier, either choose to use them or find your own freight and set your own rates. It's that simple.

I've used brokers for backhauls and have had a good honest working relationship with probably half a dozen or so. Yeah, the rate wasn't near what the DH rate was, but guess what, it got me back and a little extra to boot.

What I don't like, is the small percentage of brokers that lie, cheat, and deceive. Any knowledgeable carrier knows who they are and avoids them. The problem is that a new entrant is often forced to utilize them, but that's on them for not having developed a good business plan, but I digress.

Sorry for the loong post, truck on...

 

I think its because there's no real industry in the state of Florida. Its a consumer state so you have a lot of stuff going into the state but not a lot coming out. And from my experience on the other side of the field as a shipper I almost always found brokers to be cheaper than going directly to the carriers. Brokers have the advantage of picking from 100,000's of pieces of available equipment at any given time and as such are able to create the best match between shipper and carrier.

Same is true with my experience as an equipment broker. If I bid on a generator I can 80% of the time win a bid when bidding directly against 5 actual machinery buyers/dealers when all I'm doing is middle manning it. I can bid $50k for a generator, beat all of the dealers bidding on it by $5k and still sell it for $60k making a $10k profit because I'm not buying it for my inventory. I know the exact dealer out of the 100's of them who wants that specific type of equipment. Brokering freight is no different.

 

Yep. That's not the norm, except for the shady broker here and there but it won't take long to lose customers that way. If a broker is making 50% off a load you pulled it's on you for taking the thing in the 1st place

 

Florida's a big agriculture state, but you're right, not much else. We had a direct haul into FL that needed to be covered year round and during the right time of year had no problems getting a fruit or veggie load back to Montreal or Boston at a descent rate. During the off season though, it was tough, sometimes citrus out of cold storage, or dead head up into GA for chicken, both paid crap. Yeah, we had a few good brokers in FL that we worked with for BH's and it worked out well, most of the time. Having a direct haul both ways with no middle man is preferable, but I'll admit tough to achieve.

In my opinion, shady brokers are able to take advantage of a carrier simply because they haven't developed a good knowledge of the business, along with a good business plan to start with. A perfect recipe for failure that happens every day, and not just limited to trucking.

I think you'll find that those who are successful will usually have had a thorough knowledge of trucking before they started up, knew their lanes, and developed a good business plan, along with a back-up plan.

Having a good broker to work with when needed is just a part of ones success, and vice-versa...

 

Brokers are a necessary evil. Just be cautious of who you deal with. 15% for what they do is fine with me. Any more than that is putting your hand in the cookie jar imo

 

I think you are confused. I am not a broker. I'm an O/O and have no problem with good brokers. I'll take bad brokers over the idiot drivers I see most days though.

You need to find and work with some people you trust. I ran 4 loads this week. 3 of the 4 were great where I felt I got a fair shake and they did. I even enjoyed talking and communicating with those brokers. It's good when it feels like a team effort where everyone has a shared goal.

The 4th load was a disaster. Shipper great, recipient and broker (mostly broker's dishonesty) made me put both down on my do-not-use list. 75% good experience is a pretty common average for me running spot.

 

Just saying that trucking may not be a 100K job. If thats the bar, you have got to be the best and most arent. As far as brokers go, likely less than 15% of all brokers clear 100K or more per year. The majority are 50K or less. Were all here fighting for pennies.

 

they driving factor is load to truck ratio...more trucks than loads and you gona haul for nothing