Question for Brokers " What do brokers consider a fair rate per mile for freight?"

Discussion in 'Freight Broker Forum' started by robbiehorn, Feb 4, 2014.

  1. Mikesallah

    Mikesallah Bobtail Member

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    As a business man, I don't tell brokers the way I think I just let them figure it out and I can assure you 100% of the time I don't come off to them like you assume I did because I openly told you my strategy of doing business. Just like the brokers will never tell me they are taking more than 20% or 30% of the load , I just have to figure it out. Let's put it like this, I have 3 brokers call me for 3 different loads to 3 different places. Broker #1 wants me to run a load 44k lbs reefer at -10 for him for $1460 going 720 miles, let's say picking up on a Monday and dropping off on Wednesday at 9:00 Am. Broker #2 wants me to run a load 44k lbs reefer at 0 degrees for $600 going 250 miles, picking Monday and dropping off on Tuesday at 11:00 am. Broker #3 wants me to run a load 24k lbs reefer at 45 degrees for $1190 going 600 miles picking up Monday morning and dropping off Tuesday 6 am. Guess who's load I will be doing? I won't be doing 1 and 2 even though they pay more per mile than broker 3. The fact of the matter is if you are not factoring in your time, weight of the load and temperature of the load you are doing yourself a lot of harm without knowing it. Broker 1 and 2 here almost took 2 days of your time and not compensating you for it. Chances are if you are depending on a loadboard to get your loads by the time you are are empty at those 2 receivers it will only be ####ty loads left on there to grab unless you are at a very good loading zone. Pray and behold you are at a receiver that will empty you fast to get you rolling for your next load. Most good loads come out in the early mornings because most shippers close there doors between 2pm to 4 pm or 5 pm.
     
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  3. rank

    rank Road Train Member

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    LMAO now the 70 mile load is -10 and heavy? 500 miles for $1000 better than 70 for $700? Troll on Mr new user name. Troll on.
     
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  4. boredsocial

    boredsocial Road Train Member

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    I'm not reading that. It makes my eyes hurt.

    Look just trust me on this, people can tell what your attitude is. Particularly good freight brokers. You have to understand that a really good freight broker makes six figures a year largely for being a good judge of character. Knowing who is going to be a headache and who isn't. You strike me as the kind of guy who complains non stop the entire load while doing a mediocre job because you feel underpaid.

    I know it's really weird to have someone tell you to trust more, but this business is largely about who to trust and who not to trust. I trust trucking companies all the time. The right ones. I pay them fairly and I barely have to pay attention to the loads they take because they are professionals. You want to be like them. Make every brokers experience with you really good and they will happily pay you more money. Please note that there is no chance you're this guy while still turning down 70 mile loads that pay 700 bucks. Unless that load takes 10+ hours to load/unload (total on both ends) it's great freight you should be grateful for. This load is great because if it runs straight through you can do the 700 dollar load by 3-4pm and get another load at your nearest meat plant (they always load late into the night). Now you've done a 700 dollar load and picked up a semi decent load that hopefully delivers the next day sometime. You'll turn 14-1500 in revenue that day. If you could do that just 5 days a week you'd do 7,000 a week on not very many miles. You can't do it 5 days a week because that 700 dollar load was paying better than the market rate lol.

    Also a huge % of reefer freight is made up primarily of water. Freight made of water is heavy as heck. If you want to pull a reefer you're going to have to get used to hauling loads around right at 80k.
     
  5. Mikesallah

    Mikesallah Bobtail Member

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    Your smart ### thinks you can tell what my attitude is when you trying to read into what I wrote the wrong way. You thing what truckers do is mediocre while you sit your ### their and make a six figure income and the average o/o barely comes out even. Let that sink in for a minute. By the way, not anywhere in my comments did I say I wouldn't have a 70 mile load for $700 if it were running straight through. Guess you have that in ur small head to make you feel cool about doing nothing and making a six figure income. Belittle the O/O and make them look like they ain't doing #### so that they can take cheap freight from you, got it. The reality is most brokers ain't doing #### to deserve that huge of a cut. Get in a truck, do the run and see how it feels since you think it's mediocre. Not a single broker that I have run a freight for had me complain because if you read into my messages well you will notice I do not take freight that is not paying me right. To avoid complaining , I avoid and stay away from cheap freight. Since you know me so well and you think brokers can tell me attitude let me tell you exactly how it goes. 1. Check for load on the load board. 2 See a load on a lane I like. 3 Call the broker. 4. Ask about the loads and all the details. 5. How are you paying for the load? 6. Broker tells me how much they are paying for the load. 7. If I like what they are offering for load, I say, yes I will take it but if I don't I say, thanks have a good day and hang up my phone.l go for the next load till I find something I am willing to take. That's my business model if you don't like it start paying the right rates. Remember I already know the spot rates in these lanes b4 I call and most of the lanes I run pay more than 2 dollars a mile. It's just brokers bring greedy and preying on truckers
     
  6. Mikesallah

    Mikesallah Bobtail Member

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    Actually 5. How much is the load paying?
     
  7. boredsocial

    boredsocial Road Train Member

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    Still way TLDR. You have no idea what kind of cut would be fair. For starters it takes a very similar amount of work on the brokers end to book a long load versus a short one. If you were a broker would you be fine with making 10% of a 4500 dollar cross country load? I bet you would. If you were a broker how would you feel about making 10% of a 500 dollar local load? You'd go broke.

    So it's obviously not about profit margin at all. I actually think profit margin is one of the most overused metrics in our whole industry because it doesn't get at what people should care about: net profit. It's not about what you make, it's about what you keep. The megas have figured out how to make plenty of money doing drop and hook loads for less than 1.50 a mile all miles. They've done this by hiring cheap drivers, buying their capex in massive bulk for a good discount, and finding customers who aren't very time sensitive. They are making plenty of money and we'd both love to switch places with them (the owners not the drivers).

    One thing you need to wrap your brain around is that the broker doesn't owe you anything. He owes you what he promised to pay you and not a penny more. His customer pays him to get the freight moved and after that it's up to him to figure out how to get it where it needs to go. He is going to go with the cheapest reasonable option because that's literally what he's paid to do. The customer doesn't give us massive gobs of money to find trucks, and if they do it probably comes with some pretty serious responsibilities... That we are on the hook for if it goes wrong. The broker went out and found that customer by making hundreds and hundreds of cold calls. You can be a broker too if you're willing and able to hustle. But realize that the grass isn't always greener on the other side. Being a freight broker is ruthlessly competitive. Your customers will constantly be bringing in new brokerages to compete against you and drive down the rates. The truckers will still want the same money they did the day before too, the customers are just bringing in more people to keep the markup we charge to a minimum.

    You come across really entitled in your posts. You sound like you think the world owes you a 'fair rate' which you seem to think you get to pick yourself. This isn't how business works. Yes you're your own boss and yes you get to decide if you're going to roll your truck or not... But that doesn't mean that the brokers are somehow screwing you if someone is willing to work for less than you are. I don't get to set the rates either. If I tell a customer I can get a truck for x$ and the cheapest truck I can find is x$+200 I'm out 200 bucks. That trucker didn't screw me I screwed myself by rating the load wrong.

    You explicitly state that you want 2 bucks a mile out of FL. That's cool you can drive home empty. FL doesn't give a #### what kind of rate you think you deserve. You got paid good money to go to FL in the first place explicitly because FL sucks to come back from. You don't get to have your cake and eat it too.

    The bottom line is that all of your 'rules' are actively making your business less efficient. I have general guidelines too that I'd like to follow, but I break them all the time when the situation calls for it. You need to be the same way. Never say never in trucking. Your job is to figure out how to squeeze every last penny out of that truck every week doing what you can stand. Don't make it more complicated than that. Consider everything you're being offered and pull out a calculator. Do the math and figure out what the best option is without adding your own preconceived notions of how the business works to it.

    I've been doing this for a good while and I'm starting to really understand what's going on around me... which has led to me being enormously humbled and discovering just how much I don't know. Literally the more I learn the more I learn I don't know about. You definitely need to stop paying any attention at all to how much the broker is making... Frankly you want the loads the brokers are making bank on because they aren't as price sensitive in those situations. I had a load I was making GREAT money on yesterday. A carrier called in and got me to give up 100 more dollars instead of the usual 50 that I give away to make them feel like they won. Load paid pretty good to begin with too. A broker is much more likely to overpay you when he has a lot of profit in the load because he needs it to go perfectly to get all that money. He's not going to be greedy/stupid enough to underpay when the customer overpaid.
     
    Last edited: Feb 22, 2017
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  8. boredsocial

    boredsocial Road Train Member

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    There are also all kinds of misconceptions about what freight brokers actually make in this thread.

    TQL pays 25% of the gross profit if you originated the account and 20% if you didn't. This means that the broker you're talking to makes 75 bucks on a relatively normal 300 dollars in profit load... If he originally sold the account. If he didn't he makes 60.

    CHR pays the FM's you deal with hourly+ bonuses for having good metrics. It's a call center job.

    I make 60% of the gross profit on FTL and 50% on LTL because I have two different companies I'm an agent for.

    The people comparing my job to a real estate agents are being pretty silly. A realtor sells a few houses a year and that's fine because a house is a LOT of money. It takes a lot more work to broker an equivalent amount of freight. You can do 3-5M in gross sales as a realtor by selling less than 1 house per month selling in the right area. If you do 3-5M in sales as a freight broker you're a ####ing rock star who works 60 hours a week and needs 2 full time assistants. The two things aren't the same at all. We're making our sales in increments measured in hundreds of dollars not thousands. That's why our margins are higher.

    You also have to be about 100 times more shrewd to be a freight broker. The average successful realtor is a *pretty looking* empty headed person who relies on charisma to help them sell houses to people who want houses. The average successful freight broker is a freelance transportation manager who literally never doesn't have some kind of crisis going. The amount of stress we live with every day would make most realtors take a header off the nearest 3+ story building.

    None of this should surprise anyone. This is trucking. Even our middle men have to be tough. It's a low margin 24/7 business that grinds the weak to dust.

    EDIT: We have a lot more in common with property managers who manage people's rental properties than we do with the people who sell the houses.
     
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  9. Mikesallah

    Mikesallah Bobtail Member

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    You make quite interesting points which I don't discount at all but you seemed more entitled than you think I do. 1. It's my truck 2. I pay that insurance 3. I pay for the fuel 4. I have to drive that truck to get that load moving. 5. If anything happens to that load it comes right back to me being claimed on my insurance. I have more liabilities than you the broker. If you think making 10-15% on a local load paying $500 is too little then you sound more entitled than the one you are accusing to be entitled. It's wiser to try to do more $500 loads like than and keep 10 or 15% and keep a driver happy than be greedy and feeling so entitled taking half. If I were you I will stay away from those $500 loads if I can't do a whole lot of them a day and taking 10-15% than trying to take half. Because any Driver finds out you are taking almost half or half they really won't be happy with you. The fact of the matter is, it's not about being entitled, it's about what an O/O puts up with to get you that load where it needs to be. You have to realize and respect that. We put up with a lot more than you think we do. There won't be a single load moving without a truck excluding other forms of transportation. Just brokering a load won't move #### without a truck and a driver. Let that sink in for a minute. Maybe that should make one more entitled for having a truck and being the driver than a broker because that load needs to move from point A to point B regardless whether it's brokered or not. Your job as a broker is a creation by the beaurocracy but if you think you are not entitled then you are kidding yourself. A load will not move without a truck and a driver. But you definitely can move load without a broker. Let that also sink in for a minute and see who feels more entitled here. I do not force anyone to give me a load. I have a truck and a price , if you willing to pay my price we playing if not you are free to find another one to do it for you.
     
  10. boredsocial

    boredsocial Road Train Member

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    Someone would always have to go out and find the truck and that person was always going to be a paid employee. Many larger companies have huge logistics departments whose job it is to source trucks. They are the alternative to brokers and they DO NOT pay better than freight brokers do. If you want the brokerage rate go find the customer yourself and negotiate with the shipper direct. Either the customer has to pay someone to source the truck or you have to pay someone commission to do sales for you. Either way it's not bureaucracy it's business. And just a quick FYI sales people are basically the best paid employees at most companies. That's because it's hard work that most people suck at.

    Humans are social animals and rejection isn't something we're adapted to handle well. Sales people are willing to deal with all that ######## you can't be bothered to do.

    So bottom line: Either find your own freight or accept that the broker is going to get paid for doing his job.
     
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  11. Mikesallah

    Mikesallah Bobtail Member

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    The point is I really accept the broker being paid. What u don't find right is taking more than 15% of that load. If you paid attention you will notice that I mentioned about knowing the spot rates in the area I am at and most of the time I am in an area paying at least 2 a mile. In areas that don't I still will try to find that load that does. When I am in areas that don't pay $2 a mile, I try to take less but still meet my target of $1000 a day run. When I am Florida I usually would get a load paying $2000 but going 1250 miles.That is less than $2 a mile but I still would make $1000 a day getting that load to the shipper in 2 days. In some case it would be $1900 but I am still out with a profit. I just don't support cheap freight and in my truck sorry won't happen. One is free to use any other trucker but for me I can always wait for that good load. Sometimes I only do 1 or 2 loads and bank in good money. I will have to make that six figure first b4 I see that broker making it on my sweats. I think that is fair enough
     
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