Posting For Good and Bad Brokers

Moving individual people's cars is a high sales business OR it involves a lot of marketing spend. Comparing this business to normal freight brokers who move B2B freight isn't comparing apples to apples. Similarly moving companies have absurd margins... Margins so good that they can pay O/O's 40%, make them pay for fuel, and have drivers lined up around the block looking to sign on. They do this because they have to pay sales people a similar amount of money to the people actually doing the work because frankly the selling requires more work than the move itself and good salespeople who don't waste your leads aren't cheap.

I know that from where you're sitting being a freight broker seems super easy. And your eyes and ears aren't deceiving you, a lot of freight brokers are scum bags. I just think that if you looked at total loads moved the better brokers probably are moving most of the volume. This is because the better brokers want VOLUME not margin. I'd much rather do 5 loads I already understand on one phone call at 200 a pop than do 1 load that is high risk and high complexity that makes 1000 and takes bunches and bunches of work to organize.

 

Not entirely true, I was on a live online seminar and one of the big dog brokers let the cat out of the bag that they always try to get 30% or more profit. Don't think that guy is around anymore but I've been in this business a long time and I already knew that info, just funny hearing one of them say it with brokers and carriers tuned in.

 

He's entitled to try to get whatever he wants. He's probably not around anymore because people like me called his customers and put him out of business. Which is what he should be trying to charge those ridiculous prices. 30%. What does he have a gold plated phone?

 

Trust me, these guys are still around and are not going anywhere.

 

How do you think CHRW averaged almost 20% last year? They didn't do it by taking 10% off every load...

 

CHRW has SCM contracts. Lots of them. They also like to vertically integrate. For instance they've built a pretty large market share in watermelons through Robinson Fresh. It's actually pretty informative that given all the structural advantages CHRW has they still only have a 20% margin.

 

Not even talking about CH. They have lost roughly a 25% market share over the past nine years.

 

On the brokerage side

 

That assumes they comply with the regulations.

 

If they don't then force them to. And never do business with them again.