Please help for my class project!

I suppose a 3pl is a necessary evil, but the only company listed that has their own truck (Contract Owner Operator) is Landstar. The rest depend on brokering out freight to other companies.... I call them leaches of the industry.

They approach a company with promises of lower logistic cost.
To add insult to injury, they skim 10-20% off the top before brokering out to a trucking company, then the trucking company take as much as 45% before the trucker, the one that actually does the work, get paid.

So lets see, a person with a phone, a desk can earn thousands with no other investment.
The trucking company, pays the insurance, the authority and most time the cost of the trailer, but mainly just shuffle paperwork for sometimes thousands.
The Owner operator, invests 150 to $200,000 for his equipment and gets pennies on the dollar, a insult to a hard working individual.

A company like Landstar owns nothing, they are a non asset company, they leases what they need and contract services needed.


So lets see, I have a load that I was hauling for $3 a mile.
XYZ 3pl logistics under bids my freight down to $2.25 a mile and then tries to brokers it back to me for $1.75

Now let add in a few other things into the equation.

You are traveling down the highway and you see a truck coming at you. Are you sure his equipment is in good shape ?
Before when he was earning $3 a mile he was able to replace his equipment every 3 or 4 yrs and keep a rigid maintenance schedule. Now he is hauling for $1.75 BEFORE the trucking company he's leased to takes out their 45%, his fuel expenses is .70 a mile, other fixed expenses cost him another . 40 a mile... keep in mind that he also has a mortgage, wife and kids to support and household bills to pay.

Something has to give... what do you think it will be, tires, brakes, other maint ?

Sorry if this isn't the answer your looking for, but trucking is more complicated then to is the best 3pl.

 

Starline, what does any of this rant have to do with the questions the OP is asking? Sure, it is good sport to give a student driver a hard time about wanting to become an owner operator before they have a month of experience but this seems a little harsh for someone doing a research project.

 

Researchforclass:

If you do further research and expand on Starline's post, you will end up with a much better understanding of the business of moving freight in North America. You may even achieve an "A" grade for taking a more innovative approach.

 

Researchforclass it would help if we knew what grade you were in. Is this college, high school or middle school? Don't post personal information, just give everyone an idea of how detailed their answers should be.

 

In his info under my trucker blog if you click on the 1 it says he is a senior at the University of Indianapolis.

 

I admit my reply was a little harsh, but I have a problem with brokers with nothing invested but a phone, a desk and a file cabinet with no other interest then to take money away from hard working individuals for no other reason then "Easy Money"

 

OK, not defending the brokers that are clearly not working in anybodys interest than there own. But the money is far from easy.

The job of a broker, as I see it, is to work on behalf of the shipper to find the best rate with a carrier that meets the standards that are agreed upon between the broker and the shipper.

But I will agree that far too often, when the rates drop for various reasons, the broker drops the rate to the carrier and not the shipper. While not happy to see low rates, in my opinion, when the broker can get a better rate then they should be passing that onto the shipper.

It is in no way, shape or form the brokers responsibility to make sure that the carrier is running at a profit. That is the role of the carrier.

 

CH Robinson
1. They have a large volume of loads so it is likely that you can find a load to and from area you are looking to go. They have internal load board so it is easy to find loads and you can submit paperwork for payment online and get quickpay at a decent rate.
2. They will tend to start with low rates and work the rate up as it gets closer to the ship date/time. Many of the people that you will talk with in the office are people just out of college and have been trained on the industry as CHR sees it. Very hard to reach someone on a corporate level if you have an issue.
3. Can't say that I enjoyed anything.
4. Much of what is stated in #2. But on top of list is talking with some 20-something that has no idea about trucking industry trying to tell me what it cost to run my truck and/or why I should jump at a rate.
5. My feeling is if they offered the rate that they could go from the beginning then I would go to them initially looking for loads. But because they will not bring a rate up until they are desperate, I tend to avoid them.

Landstar
1. Large freight base and able to get alerts to my phone, with the rate, when a new load is posted in my area. They are agent based and for the most part these agents are some of the better ones in the industry.
2. Biggest disadvantage is that the Agents are really brokers and are not employees of LS. So LS has no way of controlling one agency from undercutting another agency. Some shippers that are looking for the best rate with a carrier like LS may not see the difference in working with a different agency. They view it as still getting LS at a better rate.
3. With the agents I work with, they are responsive. Also, when I do get a bad agent or have an issue, LS corporate is there to help. Additionally, being able to see the rate before I call is a bonus.
4. Can't say that overall I have anything to say on what I don't enjoy. Do get the poor agent now and then but that is to be expected with a large company.
5. Not much at this point. Maybe be allowed to add money to fuel card from not running LS loads but don't use that card anymore so not much of an issue.

Hub Group
Have not worked with them.

TQL
1. Do not work with them much. Similar "agent" set-up like LS but much poorer quality.
2. They will not give information on location beyond city on load confirmations. They do this because if they cancel the load they can say you have not been dispatched and not pay. They will also post the same load multiple times with different cities. This makes an area look like there are more loads. At times I have seen the same load posted 15x by the same agent.
3. Not much. Work with them as little as possible.
4. See 2.
5. Give all dispatch information with load confirmation. To add to this. By not doing that and canceling the load at later time it gives them the ability to still take calls on that load and get a better rate. This is a big no-no in the industry. But it seems a high percentage of agents do this and corporate allows it to happen. Most large brokers have systems that when a rate confirmation is sent it is removed from the system. I have booked a load and before telling my office they called on the same load and started negotiations with agent.

Freightquote

1. Just started working with them and do not seem as large as some of the others. Have small load board that shows rates. They seem to be good to work with and solid rates.
2. None that I have found.
3. Solid rate, easy to work with and felt they wanted to make sure we are a reputable carrier and not just some fly-by-night and that they only care about getting the cheapest rate.
4. Nothing so far.
5. Nothing yet but again just started working with them.