Brokers

[tknight]

There are so many brokers posting the same loads just saw 1 load listed 9 times
Where are they all getting these from ? No wonder it's all turned to crap ! Please educate me so I can learn I'm Judd like curious George! I need educating so I can understand this crazy system!!!!

I'm a small shipper needing to send something to BFE Nebraska (we've all been there) who do I call and how does 9 companies get my info to look for trucks? What takes place, and why

 

[ttruck]

there all bidding on the same load lowball gets it thus low paying freight which as some have said in other posts that taking acheap load and breaking even or maby not even, so sitting a few days and getting a really good load may make the difference. 7 yrs in expediting has taught me a lot.

 

[tknight]

That's no exactly the answer to the question

 

[blizzard2014]

There are emails like from Penske Logistics and also from CH Robinson expedite that maybe 20 carriers have access to. These loads pay enough money that companies will bid on them even though they do not have a truck in the area. So 9 companies are bidding on these loads based on the lowest bid they get from your carrier. Your carrier can't see these loads, because they don't know who to contact in order to see them. I know, but I'm not sharing that information. Generally you have fifteen minutes to get your bid in after the emails are sent out. If you have a really fast email server, you can have the load posted up on Sylectus within 1 minute of receiving the email offer. Some carriers have one person dedicated to doing this a few times a day. I have seen the guy I dispatch for make up to 500 dollars in 15 minutes for taking a load from one of these sources and re-brokering it back out. It's kind of like scalping off the top. It's really fast, really easy money, that is until your partner carrier screws up the load and causes you to be dropped/black-balled from the source. You risk your customer every time you double broker a load. So, chances are, those 9 carriers are all doing the same thing. I hope this answers your question!

 

[blizzard2014]

So, what you are really seeing is a few companies who have access to freight that most don't, and they are bidding the loads based on what you're bidding them at, then taking a cut right off the top. If I could do just three loads like that a day, I could maybe work 5 hours and make 1-2 grand a day. Believe me, I've been tempted many times to get back into the game. Maybe someday I will again.

 

[OntarioVanMan]

There are emails like from Penske Logistics and also from CH Robinson expedite that maybe 20 carriers have access to. These loads pay enough money that companies will bid on them even though they do not have a truck in the area. So 9 companies are bidding on these loads based on the lowest bid they get from your carrier. Your carrier can't see these loads, because they don't know who to contact in order to see them. I know, but I'm not sharing that information. Generally you have fifteen minutes to get your bid in after the emails are sent out. If you have a really fast email server, you can have the load posted up on Sylectus within 1 minute of receiving the email offer. Some carriers have one person dedicated to doing this a few times a day. I have seen the guy I dispatch for make up to 500 dollars in 15 minutes for taking a load from one of these sources and re-brokering it back out. It's kind of like scalping off the top. It's really fast, really easy money, that is until your partner carrier screws up the load and causes you to be dropped/black-balled from the source. You risk your customer every time you double broker a load. So, chances are, those 9 carriers are all doing the same thing. I hope this answers your question!

I thought double brokering was illegal ? Since you said those words

 

[Bruno]

I thought double brokering was illegal ? Since you said those words

It is, but some have what is called a broker to broker agreement. There are lots of brokers posting loads on Sylectus that don't even own trucks. These brokers are what is hurting expediting.

 

[blizzard2014]

I thought double brokering was illegal ? Since you said those words

It's not illegal. You just have to have permission to do it. CH Expedite allows loads to be re-brokered. I don't know if Penske does or not, but I can let you know if I ever get set up with them again. FedEx, before their rates went in the crapper freely allowed carriers to double broker their loads. They were pretty liberal about it. Panther, NLMI, and a few other sources were strongly against double brokering. Guess what, it still happens every single day. I don't know if it is illegal, but it is definitely unethical if you do not have permission.

 

[blizzard2014]

It is, but some have what is called a broker to broker agreement. There are lots of brokers posting loads on Sylectus that don't even own trucks. These brokers are what is hurting expediting.

Those are brokers left over from when Sylectus used to allow only broker operations to sign up for their board. Their new rule, at least it was a rule when I was with them, is that you have to be a carrier to sign up with them. You can eventually switch to being a broker only, but you have to be a carrier to sign up with them. There are games going on behind the scenes day and night. That is the American way. Everyone wants a piece of the pie. I know some brokers who have access to the Menlo board (which is almost impossible to gain access to) and they sit there and bid/re-broker loads all day and night. Sometimes making a grand or more on one single load. They don't even own trucks. It's just a guy sitting in his living room on a laptop computer. You'd be surprised at all of the stuff that goes on out there.

 

[blizzard2014]

When I say they're making a grand or more on a single load; I'm talking about straight truck loads. They don't even mess around with the cargo van loads. The big money in re-brokering is in the straight truck/specialized loads. There is still a couple hundred dollars here and there to be made off of the cargo van loads, but it's more work than going after the easier targets.

 

[rollincoal]

If it's the CHR email list I'm thinking of there are a LOT more than just 20 carriers on it. I've seen the list when it was inadvertently sent out. They usually hide it. LoadOne is on it as are just about every other expedite carrier that advertises or doesn't in this forum plus a bunch of small operators like me. I don't know how many of those get scooped up and double brokered, probably a lot as you say blizzard, but I do know if you have good enough contacts there that you will get middle of the night phone calls on loads that never go out over email. When capacity tightens back up it will be a good list again - at least with TL - just not so much so the past year or two with current conditions.

 

[blizzard2014]

If it's the CHR email list I'm thinking of there are a LOT more than just 20 carriers on it. I've seen the list when it was inadvertently sent out. They usually hide it. LoadOne is on it as are just about every other expedite carrier that advertises or doesn't in this forum plus a bunch of small operators like me. I don't know how many of those get scooped up and double brokered, probably a lot as you say blizzard, but I do know if you have good enough contacts there that you will get middle of the night phone calls on loads that never go out over email. When capacity tightens back up it will be a good list again - at least with TL - just not so much so the past year or two with current conditions.

You're right, most expedite carriers are on that email list, and some of the smaller ones as well, but many of the really smaller carriers don't even know about that list. Also, trucking companies have cut some of their expenses. I used to work for a small carrier that lowered it's cut from 40 percent to 30 percent in 2008 during the economic downturn. They gave up their entire floor of an office at the Willow Run airport in Ypsilanti and moved into much more shabby office. They did this so they didn't have to cut the drivers pay. But the office people can only cut expenses so far. Just because the rates are in the crapper, it doesn't mean that the carrier can cut employees and provide less customer service. If they do that, their customers will go over to the competition. Some brokers would argue that you need to make at least 60 percent of the load to stay in business. It costs money to run a professionally built and staffed company. I had two people working with me and some months we barely cleared 1500 dollars a piece. If you are a husband and wife operation running a company out of a small home office and taking turns dispatching day and night, then you can split all of the money. But you still can't cut your expenses too low as you would also be working for free. It is a lot of work bidding on 50 loads a day just to get a small handful of them. Dispatching is a very stressful and mentally demanding job. It takes a lot out of you. Drivers arguably have it much easier shooting the breeze and relaxing while waiting for the phone to ring. Carriers work hard for the money they get.

 

[blizzard2014]

The last half of that post was directed at OVM. I also don't blame the brokers for lowering the rates they pay the drivers. They come on here and see drivers talking about how bad things are and how everyone has to take lower rates and they take advantage of that. If you want to give your services away for cheap, then the brokers will pay you cheap. That is how it works. I always tried to pay a decent rate whenever I brokered out loads. I would try and pay a dollar a mile and then make like 15-20 cents per mile off of the load. Something is something. But there was a time when I got a 1500 mile load for 2300 and got it covered for a buck a mile. I would only pay the super low rates if it was a scenario where my driver broke down and I had to split the load money between two trucks. I have also lost money getting a load recovered from a broken down truck. It's a business like anything else. You can't blame the brokers for being in business to make money and not to lose money. More cargo van drivers should do the same.

 

[blizzard2014]

Brokers know drivers will take 30-60 CPM coming out of Laredo; and that is what they offer. If drivers stopped taking that kind of money, the brokers would whine, but they would have to pay more. I worked with another carrier who had a direct broker out of Laredo that paid a dollar a mile on all loads coming out of Laredo. It's not all cheap freight. Drivers are just too gung ho to get out of there that they take the first thing that is offered to them. There are generally fifty or sixty trucks in Laredo right? Why not just decline the cheap freight? The lowest I ever bid out of Laredo was 90 cents per mile, and my driver still made .70 CPM. You don't have to run for .30 cents per mile. If your company is paying you 50 cents per mile, they're still bidding at least 80 CPM. They still make their cut.

 

[blizzard2014]

I used to pay 80 percent of the load, so the driver would tell me what to bid knowing what his cut would be. Some drivers liked above average rates, and sometimes we would get them. Sometimes not. One time I bid 900 dollars on a 700 mile load, because I knew that broker paid well. The driver didn't think we would get it, and I actually felt bad, knowing that I could have probably gotten that run for a thousand. The driver wanted me to bit 750 on that run, but I told him this particular broker would pay more. He didn't want me to bid higher, but I did it anyways. The broker bit immediately (because it was one of those brokers who have companies bidding on their loads when they do not have trucks in the area). I was able to bid it cheaper, because I was not trying to scalp off the top, and my driver still made 720 dollars on a 700 mile load. I wanted him to make at least 800 on that load, but since he originally wanted me to bid lower, I didn't want to push it that far. The broker was surprised I bid that low. I bet their lowest bid was at least a thousand. You have to know how to price as well. Some dumb dispatcher would have bid that load at a dollar a mile not knowing which brokers pay more than other brokers.

 

[brokcanadian]

I could see a startup moving in to this crap and getting a billion or few from venture capitalists ... by letting a shipper post and book companies or owner ops themselves...wait it's called uShip...how long do all these shenanigans take before the order gets to a truck! Maybe in the future uShip will be mature enough to be the Uber of shipping. All I need are a couple addresses to pick up and drop off this mafia needs to end

 

[brokcanadian]

What advantage does a broker / carrier give over today's tech, where a shipper could post his freight and price and a truck could do the same? Sitting for hours bidding could be replaced by entering your lowest desired pay on the truck side and highest desired rate on the customer side, a computer would match the driver and customer based on the lowest price a truck would accept and the highest price a shipper would pay with trucks location closest to shipper...

Your truck gets no orders, you're bidding too high, you don't find any trucks to deliver your load, you aren't paying enough . . . all in a tenth of a second while you're relaxing like you should waiting for a load.

Bottom line, trucks may become automated, but I think brokers will go first . . . machines can do this better than people already

 

[blizzard2014]

What advantage does a broker / carrier give over today's tech, where a shipper could post his freight and price and a truck could do the same? Sitting for hours bidding could be replaced by entering your lowest desired pay on the truck side and highest desired rate on the customer side, a computer would match the driver and customer based on the lowest price a truck would accept and the highest price a shipper would pay with trucks location closest to shipper...

Your truck gets no orders, you're bidding too high, you don't find any trucks to deliver your load, you aren't paying enough . . . all in a tenth of a second while you're relaxing like you should waiting for a load.

Bottom line, trucks may become automated, but I think brokers will go first . . . machines can do this better than people already

The broker makes sure the carriers that haul the load have proper insurance and good equipment. They also manage the load and handle all of the paperwork. An Uber type system will never work as the drivers will not have the proper insurance needed to move the loads. Uber drivers do not have commercial insurance like the Taxi cabs do; so when they get in a big accident and their insurance company finds out they've been using their car to haul passengers, they will not pay the claim. That hasn't happened yet, but it will. When it does, Uber will be sued and possibly shut down. Uber takes underinsured, under qualified drivers and then cuts the rates down so that the cabbies can't make any money. That is not a proper business model. That is cheating!

 

[brokcanadian]

Well, this is Toronto here and Uber was ruled illegal until they did just what you pointed out. The drivers must have commercial insurance and a background check. It's a socialists paradise here and Uber caved to operate.
I work in the same system you all do and genuinely like and appreciate dispatch navigating it for me. But it doesn't need to be that way. We have a system to verify drivers insurance and sticker that's automated so an officer doesn't even need to take his hands off the wheel. Once they make the effort to put a system in place there will be no issues, drivers without insurance or proper permits will be dropped instantaneously.

Sorry but the rant, that 5 hours work for a couple grand set me off

 

[blizzard2014]

Broke, you're never going to make as much as a broker in the van. It might look like they are stealing money, but they are businessmen. Shippers will get tired of dealing with drivers directly as many drivers do not have the people skills necessary to deal with customers directly. Dispatching is not as easy as doing Uber. There aren't as many regulations to deal with. You can't do customer service and drive at the same time. Uber makes money because they do not have anyone answering phones. Everything is completely automated. Trucking is much too complex of an industry to completely automate. Load sizes change in an instant, weight changes. some loads need to be pulled off the van and put on a plane. You simply can't automate it all. LTL might be able to be automated if it has time on it. Also, who's to say the driver won't back out of one load for a better one? Drivers would do all kinds of stuff like that without a dispatcher monitoring them. Shippers would have a few things go wrong and then cry for the brokers to come back into the game!