Landstar Agent | Jim Burkett

Day 1 is unload.
So you made money that day.

 

I removed some of your post to hopefully make this easier to follow. You can see it in your post, the answer to what you are missing is that (as it exists in the transportation market today) the driver doesn't get to decide if brokers are necessary, the shipper is the one making that decision.

Some shippers do indeed decide brokers aren't necessary, and work directly with asset owning trucking companies. Others decide brokers are necessary, for potentially a variety of reasons (they believe it gives them access to better overall pricing, they need to keep track of less vendors, they can get 30 day payment terms (or even longer) that they might not have access to by going carrier direct, they can source capacity last minute, etc).

As a freight broker, I sometimes approach customers who use a 4PL to run their business, which helps me visualize some of the frustration an owner operator or small fleet must feel when chasing shipper direct business. With almost all of those 4PL customers I know that I'm experiencing some type of margin erosion (some take dollars from the carrier/broker on each transaction, some simply give their in house brokerage first dibs on any loads resulting in the best paying freight not being available, etc). I have first hand experience in thinking "dang, I wish that customer would just ship with us directly so I could increase my profit margins", but unfortunately I don't get to dictate that, the customer does. I have to make a business decision on whether or not I decide I want to do business with them. Sometimes we do, and sometimes we decide to try and find loads elsewhere.

I hope the above helps and/or makes sense.

 

I know what 3pl is but can you explain a 4pl to me?

 

Sure thing. 4PL is when a shipper outsources the actual transportation planning portion of their supply chain to a service provider (the 4PL). Some big ones off the top of my head are Transplace (now part of Uber) NFI, and Ryder (although I'm sure I missed a bunch). They will basically use their people and TMS to run an RFP, put together a routing guide and spot board for the brokers and asset carriers to participate in, tender shipments, track shipments, and communicate back to the shipper any issues or delays. The value to the shipper is that they don't have to go out and put together a logistics team or buy/create a TMS, and they don't have to be "good" at understanding the transportation market.

As a 3PL (broker) I'd rather do business with the shipper direct. Both because of the impact on margin I mentioned above, and because I'd rather form genuine partnerships with the right customers than be just a transaction provider trying to win the race to zero. But shippers get to decide if they believe a 4PL adds value so sometimes we are stuck doing business with them.

 

Thanks! I knew Ryder and Penske and a few others did that. I didn’t know they were actually called a 4pl. They have brokerages themselves so I just assumed they were 3pl’s that had co-brokerage agreements. And I guess they do. I just didn’t know there was a special name for it.

That’s a large gripe coming from the carrier side of things. The pie is only so big and the more people eating the smaller the portion. To me it’s ok as long as I’m happy with my slice. If I’m not I simply move on. No hard feelings. I would think from what I see the larger issue is new brokerages and a select few who seem to have the business model of moving cheaper freight and hoping to make money on volume. Those guys would cut their momma’s throat. Which in turn they are supported but cut rate carriers.

 

Yeah it's been going on for I'll say 15ish years. I can see the value to some shippers (you are outsourcing load building, carrier selection, and dealing with day to day issues with what should be subject matter experts so you can focus on making/doing whatever it is your company does), but it definitely isn't as attractive to me as 3PL.

 

Very frequently, they use an outmoded TMS, and the bidding process is super chintzy. I've had a few customers who were bought out by larger companies outsourcing to 4PLs; the folks behind the bidding, sourcing, etc. Universally, they tend to be the most miserable people I've worked with in transportation.

 

Man this is so accurate, I'm trying to think if I've ever had a great experience with these folks over my career and I'm drawing a blank.

 

Lord knows I haven't.

 

Let me get this straight, your bickering cuz you lost 2 days of work due to the broker not making your appointment? Others have mentioned that YOU didn’t follow up to confirm. That’s what I’ve have done, and those 2 days you lost, again, like others have mentioned, ITS PART OF OUR HAZARDOUS OCCUPATION. Come with the territory when you don’t follow up before hand. I’ve been in this business since 1980, it’s happened to me within those years and I’ve learned from it. Bottom line…….. thee Individual has to take matters in there hands to confirm appointment times. Just my .02. Carry on driver…..