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Brokers and bid boards are the problem.

Discussion in 'General Expediter Forum' started by blizzard, Apr 20, 2008.

  1. blizzard

    blizzard Active Expediter

    One of the biggest reasons why "the driver" has not seen a rate-per-mile increase despite the fact that fuel prices are at a record high is due to one of two factors. The first factor is "the broker factor!" Do you think the broker is just going to allow a customer to continue to pay the same rates for the loads that they need covered when fuel prices are soaring high above record levels? Of course not! The broker probably tells the customer that their independent contractors will not be able to haul "said load" at last years rates. The broker "and in some cases the company you work for, that is also serving as a broker on their own accounts" will charge the customer more money to haul freight. Yet, the big question here is "do you as the independent contractor see any of this increased revenue in your bottom line?"

    Case in point. I'm not going to name the specific carrier by name "as I am just using this as an example of the types of business practices that most of the larger carriers employ" and I do not want to single anyone out. I have a very close friend that just received a load offer to go from the Chicago suburbs to Gillette Wyoming. The load was approximately 1000 miles and his carrier paid him around 1,100 to haul the load in a cargo van. Now, as it turns out, my friend happened to ask the customer "the coal mine" exactly how much said carrier had charged them to move the load. To my friends amazement, the carrier had actually billed said customer around 3500 dollars to move the load. Now, i'm not saying this is a dishonest practice, because sometimes carriers do charge more for some loads. They actually make a huge profit margin on some loads but then turn around haul 20 other loads for next to nothing and everything tends to even itself out in the end. But, why does the company get to make that much money off of the driver while the driver has to continue to run his equipment for the same fuel surcharge that he was getting this time last year even though his fixed and variable expenses have gone up.

    This brings me to the second factor that is causing the rates to remain low. The good old bid borads. Bid boards are good for one person and one person alone; the customer. Competitive bid boards are just sinking the rates so low that a lot of decent owner operators are going to be priced right out of the business. This is happening simply because the bulk of the larger and smaller expedited carriers out here will not work together in order to set minimum rate levels. For instance, if all of the carriers got together and said that the minimum rate for a cargo van is going to be 1.20 per mile for all loads, even after we take our cut off the top. Then turn around and bid on freight with the agreed upon minimum rate in mind, load boards like NLM would have no choice but to award the loads to whichever customer is in the area. I mean, if the lowest bid is the same across the board, how would NLM continue to drive down the prices that are billed to haul freight? It simply would not happen in my opinion. I know that sounds a bit utopian, but it could very well become a possibility. Just take a second and think about how much "Ford Chrysler and GM pay car haulers to haul cars from their assembly lines to their dealerships!" Now, having pondered the fact that the automotive carriers have no problem forking over serious coin to move their finished product, why can't they then "in turn" pay us "the independent contractor" what we are worth!

    The second part of the bid board factor is the countless loads that are brokered out to other carriers load bords and then rebrokered; and on, and on, and on, and on; etc. In many cases, some of the loads out here are brokered so many times that by the time the driver gets the load, there is little to nothing left in the way of rate per mile. But, once again, we take the load either to move into a better area, or simply because we need to keep moving. Case in point. I picked up a load in Norfolk Virginia about a week and a half ago. As it turns out, this particular load was booked by FedexCC for x amount of money "or whatever rate they charge etc." Then FedexCC brokered it out to some other logistics company "because they did not have a cargo van in the area" and then this company put it up on the NLM (never say no board). Well, after all was said and done, I ended up moving the load to New York City for a mere 80 cents per mile; with no fuel surcharge. I'm not complaining about the rate "as I knew that I was getting the usual rate from my company." But how many people got a cut of the money before I got my cut? Even my company got their usual 20 cents per mile cut on this load!

    I'm just trying to say that we need to do more for ourselves. I know we can't shut things down or anything like that, but we sure as hell can fight for some carrier unity out here. In some cases demand it even. We can also work harder to ensure that loads loads are not being brokered and rebrokered. After all, we are the drivers, we are the folks that get the job done for both our carriers and the customers that our carriers service. I' m not saying that companies are bad "because they do book the loads for us, they employ salesmen to go out and find us new accounts, they collect the money for us, they look for loads while we sleep, and perform many of the clerical aspects of this business for us. I just think that we deserve more. Plain and simple. Our companies should go to bat for us just like Panther did when they they forced Ford to pay out a fuel surcharge! Now, it wasn't much of a fuel surcharge mind you, but it was something. Not only something; "it was a start!" Rememebr, this is still a great business! As long as fuel surcharges and rate per mile can keep up with our growing fixed and variable expenses, we can continue to make a decent living out here on the road.
    Last edited: Apr 20, 2008
    1 person likes this.
  2. Moot

    Moot Expert Expediter

    Transit 350
    blizzard, as long as people like your friend take loads like the above mentioned one to Gillette why should a carrier pay more?

    Yeah, I know he needed the money, lives in Ten Sleep and this load got him home. There are always people willing to take a load for whatever reasons. One driver's cheap load is another's coal mine! Trucking has changed since 1980.
  3. Jefferson3000

    Jefferson3000 New Recruit

    "The second part of the bid board factor is the countless loads that are brokered out to other carriers load bords and then rebrokered; and on, and on, and on, and on; etc. In many cases, some of the loads out here are brokered so many times that by the time the driver gets the load, there is little to nothing left in the way of rate per mile."

    I think all the problems in the world exist because your carrier hates you. You should probably shoot yourself now. Especially before you need to renew your base plates.
  4. LDB

    LDB Expert Expediter

    You said it correctly in that they have a home run and 20 more at bats with limited results. I've seen actual numbers at times and while there was a run that paid about $6500 to the company with $3700 going to the truck there also is the $785 to the company and $750 to the truck as well.

    If your example is a company that pays a fixed rate per mile then they are not making so much money off the driver. They are making money off the shipper when and where they can to make up for those sac flies they have to also hit and the driver is getting his full contractual pay just as if the job had paid only $100 more to the company than his pay.

    If the driver is running for the same fsc as this time last year he's with the wrong company. Reputable companies are paying a fsc that generally follows the price of fuel. My fsc is definitely higher than a year ago and corresponds with what I've heard for several other reputable companies.
  5. CharlesD

    CharlesD Active Expediter

    The bid boards giveth and they taketh away. Sure there are times where I see the bidding keep going lower and lower for a load from a certain area when there are a lot of people in that area competing for the freight, but there are also times where I've gotten loads for a lot more because there was nobody else in the area bidding against me. In those cases, I probably got more for the load than the broker would have wanted to pay, or would have even offered had it not been up for bid. It works both ways. Sometimes you get cheap stuff and sometimes you get more.

    But it all boils down to what OOIDA has been saying all along. Say no to cheap freight.
  6. nightcreacher

    nightcreacher New Recruit

    ok history lesson from the old man,ill try to keep this short
    Before I found Roberts Exp, I was hauling produse,and FAK.had my own authority,ran coast to coast,sometimes 3 rounds a month.Brokers,the industries friend,lol When we use to go west to east at a good rate,the rate east to west sucked,brokers know everything.when the west to east loads werent so hot,east to west loads paid better,brokers know everything,lol.To make it profitable back then,we hooked up LTL freight,and air freight,but no truck load freight,the property brokers were making a hasnt changed,and the only way to stop it,is dont haul their freight.If your working the load boards then haul for your price,thats the only way you will ever get the prices up.but this is trucking,we have cowboys with white line fever,they need the feeling of speed and running down the road,no matter what the cost.Just check out the long wheel base trucks,flat tops,no aerodynamics,at least 6 feet between cab and trailer,do you think these guys care about money,they just want to run,and like to look cool.Until these types get educated,the load board will flourish,at the expense of the owner opp.
  7. arkjarhead

    arkjarhead New Recruit

    Your post reminds me of a story my Granddad told me once. He said back in the late 60s he would haul produce out of California alot. He said there was a truckstop he would go to and there was a broker there. Alot of the drivers there were there a few times a month and kinda knew each other. Well they found out how this broker calculated the rates. He'd walk out of his office in the truckstop and count how many refers were in the parking lot and note how many were running. The more running the better the rate, the fewer the lower. So my Granddad and quite a few of the other guys got together and decided to by them a six pack of beer apeice and put in the trailer and crank the refer unit. He said the rate was good that week.
    1 person likes this.
  8. nightcreacher

    nightcreacher New Recruit

    ark they still do that,if your one of those produce haulers,when you get to your favorite layover spots,every morning you will see the brokers drive thru the parking lots,and that determins the rate of the is now done on all loads thru the whole country,even dry freight loads.also,when the east cast brokers now you got high pay comming to lets say New York,the back haul rates are low,on the otherside of that,produce loades were low,the back haul is higher.if you ever get a chance,the truckstops in Memphis early in the morning,you will see automobiles drive around te parking lots,they are checking to see if the trucking companies they use to haul their freight have any and how many trucks are available.lots of trucks,rates will be low that day,not to the broker,but what he has to offer.A couple weeks ago,I was offered a back haul load to ohio,needed to be home,rate was 1.54 per mile,45000 lbs,i gess they covered it,but not on my truck,im not running 45000 lbs for less than 2 bucks,fed ex loaded me to chicago,then from chicago loaded me to within 30 miles of home,guarantee that was more than the 1800 bucks the broker fact it was a thousand dollars more,for an extra 250 miles
  9. RLENT

    RLENT Seasoned Expediter

    Please acquaint yourself with the following:

    A. The Sherman Anti-Trust Act

    B. Price Fixing

    C. Collusion

    What you advocating is illegal, plain and simple.

    If you don't want to haul cheap freight and want to see rates increase, then possibly the best thing you can do is don't be one of the ones that will do it - and work to convince others that they shouldn't either.
  10. greg334

    greg334 New Recruit


    I think that part of the problem is that many don't understand what a free market is, this is a good example. If a company can't do a service, it goes to someone else who can. if there is money to be made along the line, that's part of an open free market, no one is forcing anyone to take the load.
  11. nightcreacher

    nightcreacher New Recruit

    its just the guy taking the load is going home and he doest care about the concequences
  12. csands007

    csands007 New Recruit

    to bad a bunch of these expediters could not form a co-op and form there own company and set up there own expedite board and ger there loads that way. Then every driver would et same rates and the extra they leave would be for the coop to run itsself.Might ake some doing but could work if they did it in a professional manner and set up guidelines first.
  13. Jefferson3000

    Jefferson3000 New Recruit

    Only problem I see is that you'd end up spending all of your time fending of anti-trust suits rather than expediting. BTW, there are co-ops already.
  14. Vinnie T

    Vinnie T New Recruit

    This has to be one of the silliest things I read...brokers are the problem?

    Do you have any idea how much frieght Panther, LEAM, and Fed Ex broker?

    The problem is rates are not equally the cost of inflation. Basically carriers and brokers alike are trying to charge more...but in 8 year deisel has jumped from 1.40 to 4.30 a gallon. They cannot charge enough to compensate these rising prices...BTW the carrier you are leased to is paying about double in insurance costs. So basically we the truckers are taking the loss more or less! I don't expect Panther to charge 6.00 a mile..that's what it would take to offset the inflation. If they did they would find someone for cheaper.

    There are carriers that are cheap and take cheap freight off broker boards..but guess what they will be out of business soon enough. Trucks are leaving the industry fast! You pay for what you get!!! No way a company is going to give a line shut down expedite team load to a 1.00 a mile carrier.

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