Share what you know about dealing with brokers

Booked an LTL load, like 16', out of MN about a month ago. Didn't have anything additional booked for it but was looking. When I get to shipper he adds an additional 30'. So I tell him I had 16' booked and he tells me he never books LTL. He is starting to get defensive and I show in the rate confirmation.

Before I can call the broker he is on the phone and pissed. He comes out and tells me load is canceled with broker and I can bill him direct (TL rate to broker was OK, not great) or I could leave and no hard feelings. Took the load. Broker calls me and us yelling this and that and that I would never haul a load for him again. When he stopped yelling I asked if he was done and then said not to worry, based on his practices he wouldn't be in business long.

If the cream rises to the top then the turd will sink to the bottom.

 

The back solicitation clause is there to promote ethical business practices. It simply says that if you do direct business with a shipper you met through them they are entitled to a commission. Put yourself in thirty shoes for a minute and think, would it piss you off if a trucker came in and undercut your rate just to get the business? Just the other day I went and picked up a load paying about 3.25 a mile to me on dry van freight. It was a small family owned shipper and I had time to chat while they loaded me. Come to find out they were paying the broker about 4.25 a mile. I made good money for what it was so I didn't complain, but would it be right for me to tell the shipper I am willing to do it all day long for 3.75? People Ned to stop worrying about what the broker makes it is up to you to take the load, if you take one losing money it is nobody's fault but your own.

 

One factor to consider regarding the "exclusive use" clause...how much cargo insurance do you have? If you are doing LTL you can easily go above the normal 100k value. If you have your original load and say it is worth 80k and you then load an extra partial somewhere and that is worth more than 20k you'd be on the hook for anything above the 100k should you roll the truck or something. You could even be liable for anything over 80k if the insurance company says you agreed to exclusive use on the first pick up and by violating that agreement by picking up the additional load your forfeit the additional coverage. Just something to consider.

 

If you don't want to sign a contract with the back solicitation clause, then mark it out or find your own freight and deal direct with the shipper. I have been approached to haul direct by shippers after taking a load through a broker. Technically, it would probably not be a violation of the back solicitation clause if the shipper did the soliciting, but it could wind up in court if I did start doing business with that particular shipper direct until a period of time has elapsed based upon the terms of the contract.

Brokers can perform a service for carriers. They are entitled to a commission for their effort. Think of them as your salesman. I have thought for some time that the broker/carrier/shipper relationship was all wrong and should be changed. Wording in most contracts state that the broker is acting as an agent of the carrier, but the shipper pays the broker who in turn pays the carrier. I think that it would be much better for all contracts to be in the name of the carrier and the broker to act like a manufacturers rep. They broker would negotiate a flat fee to be paid by the carrier, but the shipper would pay the carrier who would in turn pay the broker his commission. It would make the relationship more honest and straightforward. Brokers would actually be independent sales reps and all contracts would be in the name of the carrier's whom they represent. Brokers could represent more than one carrier if they so choose. Carriers would not have to worry so much about being paid by dishonest brokers. It would no longer be necessary for brokers to have authority since they would operate under the carrier's authority as their representative. It would certainly change the paradigm of the relationship. The carrier would know what the broker or sales rep is being paid since it is the carrier who would write a check to them for their services. Essentially, the relationship is rather one sided in favor of the broker. It would be necessary for carriers to have sufficient capital to pay brokers once loads have been delivered. Many would not have the financial resources to take care of business. It would then be the brokers who would need to make sure they would be paid by carriers. Unless a carrier had good credit or sufficient working capital they might not be able to succeed under this type of system.

 

Back when I hauled cars, each vehicle that was damaged could be considered a separate claim with the same deductible. Since I have not had a claim on LTL freight I don't know how the insurance company would look at LTL should there be a claim. My guess is that each LTL would be considered a separate load and your deductible would apply on each claim. That would be an interesting question to pose to your insurance company.

 

Back-selling will hurt your rep with everyone involved; brokers and shippers. We do a lot of broker loads and interline freight and are always asked to haul direct. As tempting as it is its a huge no-no. In this business your word should be your most reliable asset

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I don't worry about what a broker makes. If I allowed the freight to be loaded on my truck then I was obviously ok with the rate I was recieving. If the actual rate being paid is allot more than I am being paid then I remember that, and if negotiating with the same broker in the future, I try to get more. Simply put, if you put it on your truck then deal with it!!
Most rate confirmations I sign never state exclusive use, I do flatbed. That being said after or during negotiations I will ask if I can put something on with it. 9 out of 10 times the broker will have no problem with it as long as I meet my obligations to them. I will never put a partial on that cannot be loaded after and delivered before the "full tl". The reason is, I do not want to make any brokers customer question them. If a rate states control & exclusive use then they paid for it, and they should receive it.
A back solicitation clause is in place on almost everything you haul for brokers. Never back silicate or engage in any type of conversation about it, being ethical will carry you a long way.