Shippers don't need brokers?

They all have shipping departments... it's whether or not they actively book the loads with carriers, or just coordinate with the loading dock and prepare the bills of lading.

 

The shippers I worked with moved between 5 and 25 loads per month. It was more cost effective to let me handle all of their transportation than have a full time person in house.

 

We never needed brokers before. And were able to move just as much freight.. Gee we actually were able to make money. Before the mid 80s a broker sold produce to the markets. And not freight. The only brokerage was between company A not having a truck to move the freight and company B being in an area out of their freight lanes.. Then A would broker the load to B. Normally for 10% . The load would be paid within 15 days. And lots of time on a brokered load.. It was 50% at pick up.. And the other 50% was paid at delivery. That's why 10,000 dollar bond was that way for years. All brokers today should have a truck to move it of their own.plus most brokers don't have a clue on how much it costs to run a truck, and will lowball the freight to get the loads.. And some fool will haul it.

 

A lot of shippers hire one trucking company to move all of thier freight, they usually have brokerage depts. that post over flow loads, or loads to bad areas

 

Oh, if only it was that simple. Compliance alone these days is something you need to check daily with your carriers. And a good broker will also carry contigent insurance adding an extra layer of protection. Plus if the contract is set-up correctly between the shipper and the broker the shipper removes all compliance risk from themelves.

It is far more complicated than just saying the broker is taking over the task of find and tracking trucks.

 

It's always been that way... And just why do we have people taking good paying loads, and just to take that load from another broker they undercut the rate, and take out a percentage that has been as high as 50% or higher so some trucker can haul it. Funny thing.. We never needed brokers before some person with a slick tongue came out and talked shippers into.. Give me all of your freight.. And I'll take care of it. They had the same thing in Nevada a few years ago with these hiring companies. Going to companies that were hiring people.. We will handle everything for you.. Funny they are all GONE. 99% of these brokers! don't even have a truck to be able to haul that load! and hope to find somebody else to put it on their truck? those 99% don't even know what a truck costs to run down the road. So how can they rate a load? Just so they can make money off that load and so what if the truck doesnt. We finally found somebody to haul that load.. Ohhh and we will pay you when we want to.

 

Some very interesting prospectives here--and as 3dreef is sayin--it worked like that for years--only we used to refer to them in the produce biz as buyers--but same concept--BUT--in the overall freight scheme--along with deregulation came a very HEAVY influx of carriers--especially T/L that started beating down doors of EVERY major manufacturing companies Traffic manager--this along with the lovely American (new)tradition of outsource of employees--allowed many of todays brokerages to flourish--it allowed most larger companies to completely eliminate their traffic dept--which when quantified in the biz world--includin salaries--benefits etc---added up to a pretty good chunk of change--and since(in the beginin at least) the shipper was gettin the load moved for less than he was before with NO capitol outlay--since the broker was workin on a %of the rate and not actually being PAID by the shipper--therefore no expenditure above the line on his P&L

 

I remember those days with the produce. The farmer would sell to the packing shed.. Which is alright. Then these little slease ball buyers would come in and buy from the packing shed, then sell to another buyer, and he would sell to another buyer and hopefully then sold to the store. And you wonder why that food is so expensive. I know for a fact that one year 100 lb of rices the farmer got 12 dollars. And sitting in the store was a 50 lb sack of rice for 24 dollars.. Stores get about 1/2 of 1% profit. Everything else was from brokers aka buyers.. And then there was that terrible greedy trucking company. Trucking 3000 miles at 2.50 a mile.. 50,000 lbs of rice equals 15 cents a lbs. times that 100 lbs bag is $15.00. So that 12.00 for 100 lb bag that sold for at the store at 24 dollars for 50 lbs. equals 12.00 plus 15.00 plus the store mark up of let's say 4% rounded out to a dollar comes out to 28 dollars a hundred.. Oh hand the packing shed.. Let's add another 2 dollars. So 30 dollars per hundred. The buyers get the rest works out to 18 dollars unneeded dollars going to them for their services.. Buyers AKA Brokers.. Raise the price of that rice 37% .. For what? The story here is what are they doing to that freight that your hauling. And just why can't you afford to go to the store... And just why don't you seem to be able to make any money hauling that originally good paying freight.. Then the buyers, brokers have to get involved. Just something to think about .. You want to buy a car from another private party.. But a used car salesman wants to get involved in that private sale between you the buyer and me the seller. For a fee of course this used car sales man will help with the deal. WHY?

 

wow, that is complicated. Much easier for a shipper to just hire someone he can trust to get it done and stay compliant than have a broker add all these layers of checking and insuring so that he can send someone he doesn't trust to do it and hope that carrier shows up.