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Brokers make what?

Apr 04, 2020 at 04:03 PM CST
+ 25 - 5

So this weekend we had to drop a load due to the driver hitting a deer and then being caught up at the reciever when their conveyer broke. By the time he was done unloading he still had to get the headlights repaired. I was told we had until 5am and I was hopeful so I told him we would most likely be able to until 830pm but he didn't see it until 8am. My first complaint is how disrespectful he spoke to me. Al get your shit together.

So this is the part that got me, he said he is losing out on 1k because he could have sent another truck and that got me thinking wait. Id have only made 1600 on that load and you told me you couldn't go up on the rate but you are making more than half of what the carrier is making. How many brokers are doing this? No wonder rates are complete shit. How can we fix it?

Replied on Sun, Apr 05, 2020 at 02:34 PM CST
+ 6 - 2

Fix it? This is the business and you're looking at your situation as all encompasing of a broker/carrier transaction. Without fully understanding the role of the broker and his/her asociated costs, you'll continue to arrive at the conclusion you have from the transaction stated above.

For the record, I'm a carrier, not a broker. If you desire complete control of the cost of the freight you haul, you'll need to become a broker and/or secure direct customers. With that comes the responsibilty to service your customer...more than most small (1-5) turck carriers can handle or want to handle.

Best advice I can give you, know what you need to move any given load and negotiate accordingly. What the broker makes on any given load is not his/her profit margin for their entire business just like it's not for you...some loads you haul for $5 per mile and others you haul for a small fraction of that, right? Bottom line, what a broker makes on a load is irrelevant to your business.

Hope this finds you well and best wishes!

Replied on Sun, Apr 05, 2020 at 02:34 PM CST

Just say NO.

Replied on Sun, Apr 05, 2020 at 02:34 PM CST
+ 3

A VERY LARGE percent of them do it. There's a popular fallacy that brokerages only take 10-15 percent. Sure, some do when the rates their customers are paying are already cheap so there's not a lot of fat to take from the bone. However, many large brokerages hold larger contracts with larger customers who in turn pay larger rates and accessorials. This is where the real fat gets taken from the bone between the customer and the carrier. I've seen some percentages as high as 80 percent over the years. On an average though they are taking anywhere from 50-70 percent currently. Do your research and you'll be extremely disappointed. This is why I scream from the rooftops for the carriers to stick to your guns and don't move the truck unless you get a rate and accessorials YOU NEED.

If you get what YOU need than it shouldn't matter what the broker is taking. This is where the problems come in and of course the basic human instinct of greed! Too many times though the carrier seems to run for less than what they need. Usually under the impression they have to move to generate revenue. Well, sometimes you're better off bouncing to another place to find better paying freight because lanes vary depending on time of year. As a general rule of thumb I make sure I get my minimum rate and enough to get me home empty or to a better paying freight area. If I can't, then I don't make the run. I haven't pulled a load in over a month because things are so bad. This is another reason it's imperative to get your rates all the time because the market is cyclical. It's always up and down and cannot be relied upon. You have to be ready for the down times when you must park for a while to weather the storms. Or you'll just be racing to the bottom and it's subsequent bankruptcy.

Follow the link below (sign up to see all the data) to see exactly how much you're leaving on the table when you run for less than you need. Warning: be sitting down when you look at the numbers.

https://lanehoney.com/

Replied on Sun, Apr 05, 2020 at 07:44 PM CST
- 1
Or at the end of the year what do you generally average per mile for all miles that you are paid on
Replied on Sun, Apr 05, 2020 at 07:44 PM CST
- 1
What rate are you look in ng for loaded
Replied on Mon, Apr 06, 2020 at 10:36 AM CST

DON'T haul cheap freight it is very stupid and it hurts us all. If everyone would make this a common goal this cheap crap would have to stop or sit around and never get hauled. I will not wear out my trucks for nothing or even nearly nothing freight rates.

Replied on Mon, Apr 06, 2020 at 11:34 AM CST

Long ago when the ICC was still around they would police the brokers as well. The standard rate for a broker was 10% of the rate and they had to tell you what the load paid. And had 10 days to pay after receiving the BOL. I tripleased back then and came across a few shady brokers and one call to the ICC would take care of it, but the wizards of smart decided to shut down the ICC and keep the DOT. We basically do not have any real defense against the bad brokers! So you have to do your own due diligence when dealing with brokers. There is also a place on face book to report the behavior of good or bad business broker's. As owner operators we need to band together more and try to improve our ways to keep these broker's in line. CH- Robinson and TQL are already laying off agents. Thats a great start in my mind. Your business will succeed or die by your decisions.

Replied on Mon, Apr 06, 2020 at 11:34 AM CST

Tanya, David and I, as well as others, are on the same wave length. Granted I'm in a different sector of the transportation industry and have established direct relationships with the shippers we haul for and, with few exceptions, do not usually work with brokers. Unless they offer a rate within what I've established as my operating range. One of the negotiating tools I use when negotiating a rate involves dead head mileage. My philosophy is 'If the wheels are turning the truck should be earning'. Hopefully to help you, I also charge a pick up and drop rate. My drivers earn by the hour and by the mile. For example, when arriving at a receiver at the appointment time, industry wide we are supposed to give a receiver (or shipper) two hours of our time for free giving them time to get our wagon into a door. A drop, or pick up, fee allows us to pay our drivers something for their lost time after arriving at any facility. The is built into our assorials, along with extras like scales, necessary tolls, wash outs when required, and lumper fees, required for reimbursements. As others have told you, get everything in writing before signing on the bottom line.

As for brokers, over the past couple of years the broker industry has exploded with people trying to make big money for little work, other than talking on the phone. And there are two many loads that have become double or tripled brokered driving the rates down. It's rediculas. And who really has the power in this industry? It's the O/O's and companies. With out us, nothing moves. It's about time many folks got their heads out of their back sides and exercised this power instead of allowing others to run our busnesses into the ground.

Replied on Mon, Apr 06, 2020 at 04:15 PM CST
- 1
We keep going about cheap rates. What are they and what are you averaging per mile at the end of the year for all miles over what money u actually took in. And what are you expecting to get paid for loaded miles. I no what I get just wondering what you are all getting
Replied on Mon, Apr 06, 2020 at 04:40 PM CST
Originally Posted by: ERIC SCHETTL
Quote: "We keep going about cheap rates. What are they and what are you averaging per mile at the end of the year for all miles over what money u actually took in. And what are you expecting to get paid for loaded miles. I no what I get just wondering what you are all getting"

Tell us what you make first...🙂
Replied on Mon, Apr 06, 2020 at 06:24 PM CST
Well just reading alot of these guys and they say my rate or I stay home. But really intrested to see if there good rate is really good and what do they consider a cheap rate
Replied on Tue, Apr 07, 2020 at 08:33 AM CST

As its already been stated, your only option is to file for broker authority. The issue with that, is knowing pricing. Someone posted Honeylane. I personally use rateview. I dont care how familiar I am with any given area, I still check the rate. There are times when my price is a few hundred less that what I would have offered. And the opposite is also true. I've had brokers offer me rates that were higher than the current spot rate. It all comes down to knowing the rates. The other bonus is operating as a broker has a much lower barrier to entry. I pull a flat and most of the plants the haul out of want carriers to have 15-25 trucks. Brokers have not such requirements. Most of the time its just higher insurance levels.

Replied on Tue, Apr 07, 2020 at 08:33 AM CST
+ 2
Originally Posted by: ERIC SCHETTL
Quote: "Well just reading alot of these guys and they say my rate or I stay home. But really intrested to see if there good rate is really good and what do they consider a cheap rate"

In my opinion, anything under $35 a ton, or $2.25 per mile, which ever is greater, is as low as I would want to go. I believe anything under this is a cheap rate.

Replied on Tue, Apr 07, 2020 at 08:33 AM CST
Originally Posted by: ERIC SCHETTL
Quote: "Well just reading alot of these guys and they say my rate or I stay home. But really intrested to see if there good rate is really good and what do they consider a cheap rate"

Cheap to me might not be cheap to you and vice versa. Personally, I consider anything that doesn't cover my minimum mileage rate for the round trip to be "cheap". I've posted my rates and accessorial policies here numerous times. Feel free to do your own homework.

Replied on Tue, Apr 07, 2020 at 08:38 AM CST
- 1
2.25 a loaded mile
Replied on Tue, Apr 07, 2020 at 08:43 AM CST
What'd your minimum mileage rate
Replied on Tue, Apr 07, 2020 at 08:57 AM CST
+ 2
Any load that requires a backhual to turn a profit is too cheap, end of story.
Replied on Tue, Apr 07, 2020 at 09:56 AM CST
And what is that loaded rate
Replied on Tue, Apr 07, 2020 at 10:43 AM CST
Originally Posted by: ERIC SCHETTL
Quote: "And what is that loaded rate"

That number is going to be different for everyone, depending on their overhead, do you run out east and pay tolls? Do you run mostly in the city, or down the interstate? Are you going off road in bumper deep mud, tearing stuff up or puncturing tires frequently at steel mills or land fills? What type of trailer? What are your insurance requirements? How well do you pay your drivers? The universal answer that works in every scenario, is you should never need a backhual to turn a profit, if you do then the market is flooded and you should stop adding trucks.
Replied on Tue, Apr 07, 2020 at 02:41 PM CST
+ 3

Having been retired from the dump truck business for many years I find this website very interesting. My pratice when I was in business was stricly round trip rates. The use of backhaul rates is and was foreign to me. The reality of rates is this......everyone has their own operating expenses , that would be the starting point. If you don`t have a clue as to what it cost you to perfrom a service no matter what that service is, how can you possibly know what you need to perform at a profit? This is not rocket science. The problem as I see it is this......most folks seem to think they can`t negoiate and need to take what they percieve as "the rate" or else they wont get the work. The problem with "the rate" is someone else is contrlolling your destiny.

Replied on Tue, Apr 07, 2020 at 04:47 PM CST
- 1

The problem with basing everything off of your cost is that everyones cost are obvoiusly different. My cost are minimal. I run old cheap a$$ equipment. You gotta know your market and most carriers are looking at there cost and brokers are looking at the market. That didfference can be rather lucartive. I see 2.25 per mile being thrown around. How many of you have a minimium rate regard of mileage. No tolls, I'm at $450. from one side of the street to the other, $450. 10 mile load $450. 10 Mile load with tolls, $600. Thats with a flat. I gotta image the higher cost of dumps,WF with wet kits eta you guys would be much higher. Obviously you'd scale that to your locale, I'm based out of NYC.

Replied on Wed, Apr 08, 2020 at 07:58 AM CST
- 1
Originally Posted by: CLARANCE ROMERO
Quote: "The problem with basing everything off of your cost is that everyones cost are obvoiusly different. My cost are minimal. I run old cheap a$$ equipment. You gotta know your market and most carriers are looking at there cost and brokers are looking at the market. That didfference can be rather lucartive. I see 2.25 per mile being thrown around. How many of you have a minimium rate regard of mileage. No tolls, I'm at $450. from one side of the street to the other, $450. 10 mile load $450. 10 Mile load with tolls, $600. Thats with a flat. I gotta image the higher cost of dumps,WF with wet kits eta you guys would be much higher. Obviously you'd scale that to your locale, I'm based out of NYC."

Absolutely! 50-100 miles is $550-$600. My daily minimum is $550. Anything under 50 miles is $550 no matter what. Of course, tolls are always extra and/or rolled into the rate as well.

Replied on Tue, Apr 14, 2020 at 02:32 PM CST
Originally Posted by: DAVE WINTERS
Quote: "That number is going to be different for everyone, depending on their overhead, do you run out east and pay tolls? Do you run mostly in the city, or down the interstate? Are you going off road in bumper deep mud, tearing stuff up or puncturing tires frequently at steel mills or land fills? What type of trailer? What are your insurance requirements? How well do you pay your drivers? The universal answer that works in every scenario, is you should never need a backhual to turn a profit, if you do then the market is flooded and you should stop adding trucks."

Here
Replied on Tue, Apr 14, 2020 at 02:32 PM CST
Originally Posted by: David Krouse
Quote: "Absolutely! 50-100 miles is $550-$600. My daily minimum is $550. Anything under 50 miles is $550 no matter what. Of course, tolls are always extra and/or rolled into the rate as well."

Hi again, David. Although I work in a different sector, I look at things a bit different. I believe you should gross $1,000 for a full days work. Whether the load is for a round trip mileage rate, a per ton rate, or, if the distance from shipper to receiver is 200 miles or less, an hourly rate. And with an hourly rate, the time should be calculated from the start of the day until the end, due to wages and operation of the equipment. Time is money.

I'm sure brokers don't care about this, since all they are looking at is getting a load moved as cheaply as possible, so that they can make as much money as possible for doing as little work as possible.

Replied on Wed, Apr 15, 2020 at 08:01 AM CST
Originally Posted by: JERRY ASHLEY
Quote: "Hi again, David. Although I work in a different sector, I look at things a bit different. I believe you should gross $1,000 for a full days work. Whether the load is for a round trip mileage rate, a per ton rate, or, if the distance from shipper to receiver is 200 miles or less, an hourly rate. And with an hourly rate, the time should be calculated from the start of the day until the end, due to wages and operation of the equipment. Time is money. I'm sure brokers don't care about this, since all they are looking at is getting a load moved as cheaply as possible, so that they can make as much money as possible for doing as little work as possible. "

Hello, Jerry. Well $550 is my minimum on a 50 mile run not including accessorials and not being billed hourly (some are literally billed hourly from port to port). If everything works as planned the truck averages 100/hour. If things go wrong detention begins and ensures the truck continues to generate said 100/hour. But like mentioned previously this is my minimum. The rates climb depending on the load details. My daily target is 1k (after fuel) but sometimes I can be lazy or the market simply won't bare it so I only end up in the truck on a part time basis. I wouldn't feel right if I charged 1k for a 4 hour day unless it was some sort of extenuating circumstance or there were added expenses to cover. Yes, spot market freight consists mostly of brokers who want the cheapest truck possible. They're not looking to build relationships. Some claim they want to build relationships so the carriers will do a better job. That's another little trick they like to employ. If a carrier wants to find a decent broker who actually cares about building rapport and establishing repeat business they ought to be looking for the ones who never post on the spot market and bring their "A" game when given an opportunity to shine.

Replied on Wed, Apr 15, 2020 at 08:32 AM CST

Yup, like several others my detention rate is also $100 per hour. My drop/pick up rates covers any time my drivers may loose when arriving at a shipper/receiver. And there are the usual reimbursements for tolls, scale tickets, lumper fees, or required washouts. Hopefully our conversation will be food for thought to others who may be newer to trucking per se.

Replied on Thu, Apr 16, 2020 at 07:46 AM CST

Never worry about what a boker makes on a load. If it don't pay you well enough to haul it, to cover you cost or fit into your business plan, don't haul it. But always ask for more Money. Those really cheap loads always come back to screw you. One way or another.

Replied on Fri, May 01, 2020 at 07:48 AM CST

As a 3PL in this industry and have been since the 80's, our goal has always been to establish relationships with both the carrier and customer. I can't speak for all brokers or 3PL's out there but in our opinion, a carrier is equally important as is the customer. Right now, things have changed due to this virus.It's impacted transports all accross the US. Because freight is down due to supply chains being broken, companie are re-evalutating pricing currently as they try to move forward into the year. These companies output of goods has been reduced dramaticly due primarily with consumer demand, hence why you see shortages in most sectors of the overall economy which includes demand for transports. Even though this is temporary, the shock waves from this will still be constant for sometime. I agree, there are some 3PL's and or brokers out there that are not worth their weight in salt but not all of us fall into this category. There are many more hiden variables at play here besides brokers that are impacting overall lane pricing, it's just easier sometimes to point the finger in that direction.

Replied on Sat, May 02, 2020 at 01:38 PM CST
https://www.overdriveonline.com/carriers-right-review-shipper-paid-brokered-load/?utm_source=gear&utm_medium=email&utm_content=05-01-2020&utm_campaign=Overdrive&ust_id=e59196d9d5a48e255417cfbeba0e725c84b3b7dc&oly_enc_id=2682I6288356A6W#
Replied on Fri, May 08, 2020 at 09:21 AM CST

All of them are! Nothing new we are the ones that have to change that.

Replied on Fri, May 08, 2020 at 09:35 AM CST
Originally Posted by: ERIC SCHETTL
Quote: "2.25 a loaded mile"

Eric, you mean 2.25 a running mile ,right?

Replied on Fri, May 08, 2020 at 09:35 AM CST
Originally Posted by: Wes C
Quote: "Tell us what you make first...🙂"

Your out of California. Know wonder you want him to go first Ca. one of the biggest problem's out there

Replied on Fri, May 08, 2020 at 11:34 AM CST
Yes. A hope that is what Jerry meant not 2.25 a loaded mile
Replied on Fri, May 08, 2020 at 11:59 AM CST
Originally Posted by: ERIC SCHETTL
Quote: "Yes. A hope that is what Jerry meant not 2.25 a loaded mile"

Well, he said somewhere he was pulling reefer loads from the west for something like a buck eighty... So...

Replied on Fri, May 08, 2020 at 04:45 PM CST
Originally Posted by: DEAN HUGHSON
Quote: "Well, he said somewhere he was pulling reefer loads from the west for something like a buck eighty... So..."

You are correct, Dean. We did pull ONE load from Yuma to Chicago for, actually, $1.87 per mile, through the grocery firm I was contracted with back in the '70's. Since then I've had a couple of conversations with their buyer and flat told him we can't afford to do this again for less than $2.25 per mile. Of course, I'm too expensive for him. So, we'll continue running to the right coast, perishable loads permitting at this time.

My suggestion of a base rate of $2.25 per mile for exempt freight was round trip. Not just loaded miles. Of course, if you picked up a return load for the same rate, this would only help your bottom line. If you could only find a cheap ass load returning, let it sit and let someone with less business sense haul it.

Replied on Fri, May 08, 2020 at 04:45 PM CST
Originally Posted by: MATTHEW SATKOWSKI
Quote: "Fix it? This is the business and you're looking at your situation as all encompasing of a broker/carrier transaction. Without fully understanding the role of the broker and his/her asociated costs, you'll continue to arrive at the conclusion you have from the transaction stated above. For the record, I'm a carrier, not a broker. If you desire complete control of the cost of the freight you haul, you'll need to become a broker and/or secure direct customers. With that comes the responsibilty to service your customer...more than most small (1-5) turck carriers can handle or want to handle. Best advice I can give you, know what you need to move any given load and negotiate accordingly. What the broker makes on any given load is not his/her profit margin for their entire business just like it's not for you...some loads you haul for $5 per mile and others you haul for a small fraction of that, right? Bottom line, what a broker makes on a load is irrelevant to your business. Hope this finds you well and best wishes!"

heard that before none of my business well don't see it that way i like dealing with honest people not thives kinda like when hurricane strikes ya bunch Brokers rob goverment what makes this right how can you sleep at night when you lay down with the dogs

Replied on Fri, May 08, 2020 at 04:45 PM CST
Originally Posted by: DEAN HUGHSON
Quote: "Well, he said somewhere he was pulling reefer loads from the west for something like a buck eighty... So..."

Sorry, Dean. I made an error. I meant $2.25 for all miles with dry bulk. I would not charge this for a load of produce, since the loads going to my distination generally pay decent. Generally. Not at this time, unfortunately.

Replied on Sat, May 09, 2020 at 08:45 AM CST
See Jerry you do haul cheap loads. After you cut ever one else for doing it
Replied on Sat, May 09, 2020 at 08:46 AM CST
Originally Posted by: MATTHEW SATKOWSKI
Quote: "Fix it? This is the business and you're looking at your situation as all encompasing of a broker/carrier transaction. Without fully understanding the role of the broker and his/her asociated costs, you'll continue to arrive at the conclusion you have from the transaction stated above. For the record, I'm a carrier, not a broker. If you desire complete control of the cost of the freight you haul, you'll need to become a broker and/or secure direct customers. With that comes the responsibilty to service your customer...more than most small (1-5) turck carriers can handle or want to handle. Best advice I can give you, know what you need to move any given load and negotiate accordingly. What the broker makes on any given load is not his/her profit margin for their entire business just like it's not for you...some loads you haul for $5 per mile and others you haul for a small fraction of that, right? Bottom line, what a broker makes on a load is irrelevant to your business. Hope this finds you well and best wishes!"

You sound just like a broker, before long your price gouging will come to a end.
Replied on Sat, May 09, 2020 at 12:34 PM CST
Originally Posted by: ERIC SCHETTL
Quote: "See Jerry you do haul cheap loads. After you cut ever one else for doing it"

You are correct, Eric. I bit the bullet on this one, if only to prove to the buyer what we will do for them if we signed up with them again. However, I haven't comprimised my rates in other areas. And I still feel that we, in the industry, should not allow shippers, or brokers, to dictate what the rate will be to haul their stuff. It is our businesses. Although we are experiencing extra dead tiimes between loads, at this time, like everyone else, we are still operating within the rate limits I have set. I'm just trying to be honest with the information I am forwarding.

Replied on Sat, May 09, 2020 at 12:34 PM CST
Originally Posted by: Randy Swopes
Quote: "You sound just like a broker, before long your price gouging will come to a end."

You apparently missed the line where I said stated I'm a carrier, not a broker. That said, I'm willing to bet the root of your frustration is your operating cost and lack of overall financial stability. On that note, some truckers really don't have any business sense and that's a real problem when you work for yourself. Stop and think about how many companies (other than truckers) are operating at a loss RIGHT NOW...but they press on to see better days AND they maintain a balance sheet to cover rough patches. Tough times are ineviteable so you're best to prepare for them or we'll be having this same discussion the next time rates aren't (high) enough to float your "business" another week.

Replied on Sat, May 09, 2020 at 06:28 PM CST

It seems like a lot of space is taken up on these forums in regard to how much a broker makes. I pose a question: Does it really matter what a broker makes as long as you are able to negoiate the rate that fills your needs? And the second question is: If you are not able to get what you need , why are you willing to work at a loss. I suspect that a lot of people neglect to ask themselves these probing questions.

Replied on Mon, May 11, 2020 at 07:39 AM CST
Yes Jerry. But someone else takes a load to get home or to a better spot. You rip them for it. But they are doing it for the same reason you did so why is it OK for you and not others at least the rest say they did it but you talk a lot of talk to come up with a politician answer
Replied on Mon, May 11, 2020 at 07:39 AM CST
Originally Posted by: JERRY ASHLEY
Quote: "You are correct, Eric. I bit the bullet on this one, if only to prove to the buyer what we will do for them if we signed up with them again. However, I haven't comprimised my rates in other areas. And I still feel that we, in the industry, should not allow shippers, or brokers, to dictate what the rate will be to haul their stuff. It is our businesses. Although we are experiencing extra dead tiimes between loads, at this time, like everyone else, we are still operating within the rate limits I have set. I'm just trying to be honest with the information I am forwarding."

Don't worry about it Jerry. Your logic here seems reasonable. But the thought process of a minimum rate is a dream.

Replied on Mon, May 11, 2020 at 07:39 AM CST
Originally Posted by: MATTHEW SATKOWSKI
Quote: "You apparently missed the line where I said stated I'm a carrier, not a broker. That said, I'm willing to bet the root of your frustration is your operating cost and lack of overall financial stability. On that note, some truckers really don't have any business sense and that's a real problem when you work for yourself. Stop and think about how many companies (other than truckers) are operating at a loss RIGHT NOW...but they press on to see better days AND they maintain a balance sheet to cover rough patches. Tough times are ineviteable so you're best to prepare for them or we'll be having this same discussion the next time rates aren't (high) enough to float your "business" another week. "

I think many have set themselves up like this from the get go. Not really knowing what they are getting into. Fortunately there are opportunist that get in when rates are hot and will go home and sit and wait when the bottom drops out. But if you are servicing a customer and rates start to decline, when do you throw in the towel? If you don't ride it to the bottom, the guy that did still has that customers attention. He may be limping and wounded but he still has their attention. And it's likely that this customer is only part of any carriers operation. So do you "throw the baby out with the bath water"?

And the broker thing...It is their job to know the market. They spend their day learning it. A one truck operator or a small fleet has many other things to keep an eye on. Knowing the market is very important. Ignorance and desperation will take you out. Some think the broker is screwing them. Maybe. But there is a good chance they know something you don't. If you find yourself looking at a load that is less the what you "need", maybe you shorted yourself on the load going into that area. Or your operating expenses are too high.

I could ramble on. I'll leave you with this decision thought process on rates or loads,"it's either this or nothing". I don't think there is a right or wrong answer.