Shippers don't need brokers?

Maybe one may want to point out to the consumer just why stuff is so expensive.. Sure isn't the manufacture, or the grower...or the trucking company....or the end point of the sale..BUT the middle.. The fat...only big company's can loose the fat.. Like WalMart or ever been to an Asian store.. Where the food is fresher and cheaper.. NO FAT..I bet these buyers/ brokers just HATE WalMart..

 

and what's your point. The shippers dispatch their loads to a trucking company or a broker. And you have to handle everything? Then you go out.. Get in that 150,000 dollar tractor and that 30,000 dollar trailer, with that 3.50 a gallon diesel fuel, and the list goes on and move that freight. That is handling everything.
And like I said 99% of the so called brokers don't even have a truck to move it. Only brokers think they are needed and try to tell us that we can't move freight with out them.. Darn. What did we do without brokers? Ohhh that's right we moved freight and didn't have any middleman in the middle.. Sounds just like a produce buyer. Jacking up the cost of moving freight. And taking as much as possible to get some trucker to move it. What are you going to do if nobody wants to move your freight? You sure can't.

 

I am interested in learning how people come up with these numbers. And I am talking about numbers where it is the norm that brokers are getting 30%+ off of every load. Not that you saw a bill one day and it had X on it and they paid 20% of that. That happens. But to take that and say it is normal is more than just a stretch.

The bell weathers of the industry that many use to gauge how brokerages are performing are CHR and Landstar.

YTD, CHR is sitting at around 12% margin according to their financial reports. And in recent years no quarter has been better than 15%.

LS on the brokerage side starts out offering loads at 20-22% margin and negotiates from that point.

So if we go on the high end of real numbers and a shipper has $100,000 monthly transportation spend, you believe that they can run that department for less than $15,000? Let's say they can do it for $7,500 a month. So now is the added hassle and risk worth it? What happens when they have peak time and the spend goes to $300,000. Now they have to hire people on a temp basis. Where are they going to put them? Where do you hire temporary people that have shipping experience? Don't forget computers and phones. These are all capital expenditures.

And isn't it a little arrogant to think that you understand another persons business better than they do? All these successful business men and women just happen to be ignorant fools when it comes to shipping and are being taken by the brokerage sales person. That in and of itself is more than a little far fetched.

 

Explain to me again what "extra" work does a shipper need to do when hiring a carrier rather than a broker or brokers ?

 

It's kind of funny how we ever got freight moved for well over 50 years without these brokers. Something to think about.. When we used to take another trucking companies loads it was a straight 10% of the gross. When was the last time a broker gave you a fuel surcharge? Or do they add that to the load.. And then take their percentage out of it. Hey broker! What's the FSC today? Bet you don't even know. These brokers don't even know how much it costs to run a truck down the road. So how can you put a rate on a load? And just why should we have to pay you to do a job that we used to do ourselves? Ever wonder why you can't make it driving that truck? NOW... Let's let the cat out of the bag.. Every load that you haul from a broker.. It is your right to get the bill from the broker that they charge the shipper.. And then if any questions, you can call the shipper to see if it is a legitimate bill. Or if the broker doesn't pay you in a decent time.. You can bill the shipper direct. What ever happened to the 1/2 pay from the broker at pick up and 1/2 pay when you deliver. And most brokers pay in 30 days or longer.. Why? Guess we can't talk about that's one either.

 

You must have freight either going INTO a great area or coming out of a market that's short on freight and loaded with trucks.

WOW! Best answer I've seen here since joining. You hit the nail on the head. I'm going to make this my signature through the end of the year... possibly longer. Thanks for having some common sense and business smarts!

 

OMG how did we exist before brokers? Funny thing. We did. We made money . And all with out brokers.. And did a better job, as when we told a shipper that we would show up.. We did. Then there are the brokers that want to hide the fact that they aren't a trucking company, by calling them selves a trucking company. Well if you want that.. Then you haul it. Opps can't do that.. No trucks.

 

I hire a guy to do my taxes, that's true. I don't hire a guy to hire a guy to do my taxes though.

 

Exactly! And now we have computers with things like turbo tax. And funny thing with those pesky computers.. The shippers can use them also.. By passing that fat in the middle. Opps. Guess we shouldn't talk about that one.