okay how much money you brokers make moving loads

I live near a small company that moves several flatbed loads a week to the same area. They prefer to use one broker and they work with me directly when they have a "rush shipment." I know they pay roughly $1,200 to move these loads approximately 400 miles whether they are paying me directly or using a broker to move it.

The other day they asked me why I don't ever run the loads that they post through the broker and I informed them the broker was only paying $800. They were surprised because they informed me they were paying $1,200. The product takes a long time to load and with the mountain passes the run takes a day and a half minimum to complete.

I called on one of the brokered loads and informed the broker that yes, $800 was a decent rate for 400 miles but that I also knew that he was paid roughly $1,200. I stated that I wanted him to receive a fair rate but I also wanted to be treated fairly. I asked for a rate of $1,000, which the broker responded with "I will get it moved for $800." I then countered with $950 and he again responded "I will get it moved for $800." I decided to pass.

 

I hope you responded, “no problem, I’ll run my truck for $1000 for someone else today.”

 

I had not seen this article before, but it rings very prescient to the position my company is now in. We have grown the fleet to the point that we now have been able to secure multiple direct shippers with drop trailer loading and 24 hr access to pickups. All of these shippers are within 50 miles of our home base. That means that we have surpassed that Golden Threshold of 50% direct customer freight (actually slightly more because some of it is round trip freight). Because we also have an in-house brokerage, we can pick and choose which of the direct customer loads go on our trucks. And we can leverage the capacity that each customer gives us to secure better rates from the others. It honestly feels pretty good to have the security after several years of the roller coaster spot market (we could probably get better rate per mile *right now* on the spot market, but we all know that won't last forever). The next step is securing direct customers in our "back haul" markets. Thats proving to be a bit tougher though, as people really do prefer to work with "home town" companies if possible.

 

I will give you credit that your not whining that your losing money. That does say a lot. If your going to play the game then be ok with both sides.

Im just glad I’m not in the position to have to play the rat race. I’d rather do less revenue or business and not have to carry massive losses. If I wanted to gamble I’d just forget about brokering and play the freight waves stock market.

 

Thanks. I agree there are knuckleheads out there that were fine with paying carriers low rates in April and are now upset they have to pay much higher rates when the market has flipped. We are fortunate in that we made a decision to keep many of the "regular" carriers that we work with at the same rates on lanes in April, and most of them have reciprocated and are running at the same rates they have all year right now (which has to be tough when they could be making at least double that on the same lane right now).

And yeah, there are definitely days where working with the big contracted customers is really rough. But when it is going well it's really awesome and ends up feeling like a win-win in that we help the customer, pay bills and generate a reasonable amount of profit, and help carriers (many small to medium owner operators) get their hands on hundreds of loads every week that they realistically wouldn't have access to.

 

How does one get into this side of the business? What skills/experience/attributes do they look for when hiring for these positions? What education?

 

Everyone's looking for something a little different, with regards to skills and education. Some want previous experience. Some want a college education. Some want both. Some what neither. Just all varies.

The biggest thing that you can do to impact yourself is know whether or not you have the right personality. Can you sell? Can you deal with a massive volume of soul-crushing cold calls to find that one nugget? Can you wheel and deal with carriers who come from such diverse backgrounds as Eastern European immigrants to college educated native born Americans to Hispanics with limited english, and everything in between? Can you convert a call as the fourteenth broker who's called a potential customer in a day from an insta-hangup to a positive conversation?

Those are the things you've got to ask yourself. I can't teach personality. I can teach the rest.

 

I once had an old pro salesman tell me, "my whole goal in any sales transaction, is to take as much money as I can out of the customer's pocket and put it in mine, with as much kindness as I can."

A lot of ppl don't have the temperament, skills or discernment when it comes to a commissions/percentage based vocation.

It's not easy.

 

Since you seem to be a potential employer (or at least maybe able to point me at some) and willing to answer questions and I am new in this industry and trying to find my footing;

I have worked on commission nearly all my life. I was a door to door salesman in my late teens. Not scared of cold calling if I'm confident of the product/service relative to the marketplace and understand that most times brute perseverance trumps talent or luck or both. I've been outside the US, have worked closely with people of many cultures and have an appreciation for those cultures and how their perception may (or may not) differ from mine as a result. I am willing to be the one who offers a little give in a position if that serves to move us closer to the desired result. Being a rank noob, I have no ego attached to any of it and this allows me to take instruction from anybody qualified to do so and be genuinely appreciative of it. I've been both a leader and a follower in my former career and am not uncomfortable with responsibility and have respect for liability, record keeping and compliance issues.

That said, is it fun? Is being a broker more fun than driving? Than being an O/O? Does it pay alot more? Must one be an employee or can one work as an independent contractor? How does one get started down this path?

Thanks for sharing your knowledge.

 

if someone started a brokerage who’s business model was basically “10% for the broker, 90% for the driver” with the aim to become the Amazon or Walmart of brokering for drivers. Would that be appealing?
Asking for a friend that’s been doing research and is not liking the snake-like tactics that he’s been seeing