Back soliciting

[OntarioVanMan]

If the broker posts the load and competitive bidding takes over to the point the broker gets a huge profit margin, is the broker a crook for awarding the load to the lowest bidder? Or should we blame the carriers who bid that low for padding the broker's profit?

Anyhow...anyone who has been in this business for any length of time should know the basics of how this business works.....being a lowly lease O/O like me....also at the bottom of the food chain...
Now that I am paid a % of the load and can see a little better what real prices are, not the total picture because everyone up the chain takes their cut to handle the load.....and to think my last carrier I was on flat rate mileage and losing a ton of cash.....the closer you get to the source, the better....

 

[turritrans]

We've been pretty careful about not doing this, but the longer I've been in this business and learned more about where freight comes from and the number of times a load is brokered at times, it got me to wondering how much of a grey area there is with this topic of back soliciting.

When I was still driving I made it a point not to try to solicit at a shipper or consignee if I got the load from another carrier or a broker. If the time period in the contract was up and I hadn't picked up a load there in that period of time, then that's a different story, but the rather confusing "who is a customer" thread the other day brought the topic back to my mind.

Here is the scenario that I always thought was pretty clear cut. I book a load from a large carrier like Panther and send one of our trucks in to pick up the load. This shipper is a direct customer of Panther. Well, soliciting them at that moment is pretty much off limits and the driver knows that. Now if we don't do another load from that shipper during the period of time that is on our contract with Panther, then when that time period is over we can pursue business with that shipper.

But what about a case where a load has been brokered nine ways to Sunday? Let's say that a small carrier doesn't have access to NLM and someone on Sylectus brokers a load to that small carrier that came from NLM. Is it really back soliciting if the small carrier figures out where the load came from and gets hooked up with NLM a week or two later to get access to that freight? If a small carrier gets a load from another carrier who got the load from the expedite division of a large truckload carrier who in turn got the load from a shipper, is it acceptable for the small carrier to seek to do business with the large truckload carrier or the shipper?

The broker carrier agreements are not exactly really clear cut on this. You will see language about not soliciting a customer until a certain amount of time has gone by, but what constitutes a customer is not the same thing across the board with all carriers. A lot of our customers are other carriers or 3PL companies. But what if we get a load from a carrier who got the load from a large 3PL that gives loads to several carriers? Is that large 3PL off limits to us for a period of time, or does back soliciting apply more to what most of us would consider a customer in the traditional sense, an actual shipper or consignee?

This is backdooring!!!

Your not going to get very far in this business if you follow this practice. Best to find your own freight!


Brokers have contracts in place to protect themselves

It's unfortunate but carriers backdoor all the time, if you gained knowledge of an account from a broker tendering you a load and solict their contact directly depening on the contract in place you could be, and should be prosecuted.

 

[paullud]

This is backdooring!!!

Your not going to get very far in this business if you follow this practice. Best to find your own freight!


Brokers have contracts in place to protect themselves

It's unfortunate but carriers backdoor all the time, if you gained knowledge of an account from a broker tendering you a load and solict their contact directly depening on the contract in place you could be, and should be prosecuted.

Is it OK if I deliver a load and the customer says they have some more stuff to be moved but wants to deal with us directly or is that backdooring? They would be soliciting me at that point.

Sent from my ADR6400L using EO Forums

 

[Darmstadter]

Is it OK if I deliver a load and the customer says they have some more stuff to be moved but wants to deal with us directly or is that backdooring? They would be soliciting me at that point.

Sent from my ADR6400L using EO Forums

I dunno, but I'd be worried about being able to collect payment from a shipper that I have no relationship with and have not run a credit check on. At least on the inbound load, you have probably done business with them before or at least have some comfort level on their ability to pay you.

 

[CharlesD]

This is backdooring!!!

Your not going to get very far in this business if you follow this practice. Best to find your own freight!


Brokers have contracts in place to protect themselves

It's unfortunate but carriers backdoor all the time, if you gained knowledge of an account from a broker tendering you a load and solict their contact directly depening on the contract in place you could be, and should be prosecuted.

That is basically back soliciting, but there are also situations where a carrier already knows about a freight source, but just doesn't have access to it initially, like NLM. Everyone knows about NLM, but for a few years it wasn't that easy for small carriers to get access and even now smaller carriers don't get first crack at the Ford and GM stuff until they can afford the higher insurance. There are a few carriers who have the higher insurance and get first crack at those loads and broker them to the smaller carriers. If the smaller carrier eventually grows to the point where they can afford the higher insurance and now NLM gives them access to those loads, how would that be viewed?

I'm not trying to justify back soliciting, but I'm just trying to clarify it a bit because of the way our industry is right now with so many carriers doing loads for the same sources. Are sources like Menlo, NLM, and the like fair game for any up and coming carriers, or would most people even consider those protected relationships that are subject to back soliciting?

 

[turritrans]

Is it OK if I deliver a load and the customer says they have some more stuff to be moved but wants to deal with us directly or is that backdooring? They would be soliciting me at that point.

Sent from my ADR6400L using EO Forums

Depends on the language of the contract

But if you gained knowledge of the freight opportunity by doing work under contract and you start hauling directly for the customer....yes thats back soliciting

 

[turritrans]

That is basically back soliciting, but there are also situations where a carrier already knows about a freight source, but just doesn't have access to it initially, like NLM. Everyone knows about NLM, but for a few years it wasn't that easy for small carriers to get access and even now smaller carriers don't get first crack at the Ford and GM stuff until they can afford the higher insurance. There are a few carriers who have the higher insurance and get first crack at those loads and broker them to the smaller carriers. If the smaller carrier eventually grows to the point where they can afford the higher insurance and now NLM gives them access to those loads, how would that be viewed?

I'm not trying to justify back soliciting, but I'm just trying to clarify it a bit because of the way our industry is right now with so many carriers doing loads for the same sources. Are sources like Menlo, NLM, and the like fair game for any up and coming carriers, or would most people even consider those protected relationships that are subject to back soliciting?

Say you get a load from a broker that deals with one Lanstar branch all the time. Sure you could call corporate, but you would never find out where the freight is coming from unless you solicit the agencies directly or backdoor your broker giving you these loads and with some research found out what branch it came from. Depending on the contract the broker has with the carrier, thats backsoliciting! Why do you ask Charles, have you been soliciting anyone's business?

 

[CharlesD]

Say you get a load from a broker that deals with one Lanstar branch all the time. Sure you could call corporate, but you would never find out where the freight is coming from unless you solicit the agencies directly or backdoor your broker giving you these loads and with some research found out what branch it came from. Depending on the contract the broker has with the carrier, thats backsoliciting! Why do you ask Charles, have you been soliciting anyone's business?

We haven't been going after sources the way that you mention, but we've been recently approved for some of the larger 3PLs that everybody and their brother is hauling for and when I occasionally see a load posted on Sylectus it makes me wonder how often we might have hauled some of those loads in the past without even knowing the source. I guess it would be hard to prove intent or lack of. I'm not out to steal anyone's customers because we've made a good name for ourselves the last couple years and I don't want to bite the hand that feeds me so to speak. My concern is that in the process of trying to grow as a carrier we might inadvertently haul some loads from a source that another carrier had brokered to us in the past and that it could be viewed the wrong way. What do you do if you find out after the fact that a new freight source happens to be the source of some loads you had hauled in the past for other companies, not knowing where it was coming from?

 

[OntarioVanMan]

had sort of a situation the other week..I knew we were doing it for someone else...the shipper says" why I am calling so and so and you guys always show up?....why don't I just call you directly instead?
I told him no I did not have one....and he'd have to make the call on his own...I guess that is what happens when you do actually get a customer and they never see who they actually called, the load is always sold...

 

[Turtle]

Whenever I'm asked something like, "Why I am calling so and so and you guys always show up?", my standard reply is, "Because so and so wants it delivered on time and undamaged."

 

[blizzard2014]

How about this hypothetical situation. Company A has pulled many brokered loads from both companies B, C, and D. All of these loads came from UPS. Now company A keeps getting calls from UPS about their posted trucks on the alliance only for UPS to figure out that they are not an approved carrier for them and cannot move the load. Then UPS asks company A to become a qualified partner carrier with them so that they can see the emails, load board, and have office representatives call for availability on their empty units. What does company A tell UPS?

Technically UPS is the company that is soliciting the services of company A and not the other way around! Is this backdooring? I mean UPS is not a great secret, but they are very difficult to get signed on with! It's not like company A went out there trying to track down the main contact at UPS to sign up with them after they pulled a couple of double or "co-brokered" loads for then via companies B, C, and D? How does this scenario play out in the grand scheme of things?

 

[OntarioVanMan]

your scenerio I would go for it...after all UPS contacted you, made the first move....there is also a case where B,C and D if they don't have a truck that can do the load in the area..they are double brokering....

 

[turritrans]

We haven't been going after sources the way that you mention, but we've been recently approved for some of the larger 3PLs that everybody and their brother is hauling for and when I occasionally see a load posted on Sylectus it makes me wonder how often we might have hauled some of those loads in the past without even knowing the source. I guess it would be hard to prove intent or lack of. I'm not out to steal anyone's customers because we've made a good name for ourselves the last couple years and I don't want to bite the hand that feeds me so to speak. My concern is that in the process of trying to grow as a carrier we might inadvertently haul some loads from a source that another carrier had brokered to us in the past and that it could be viewed the wrong way. What do you do if you find out after the fact that a new freight source happens to be the source of some loads you had hauled in the past for other companies, not knowing where it was coming from?

Na

It would be very easy to prove if you hauled for a.broker on Sylectus then backdoored the account under the guise of "its just a big 3pl".
You said it yourself you see and haul those loads from Sylectus. You found out who owns the freight from the BOL and back solicited the account.

Going back to my Landstar example, each office, branch and agent has their own book of buisness and just uses Landstar for the authority and billing dept. Its much different then say NLM being all business is centrally controlled and managed through.the same bid board process. Very different with Landstar or other companies the have branches that manage and tender thier own business and have their own relationships and loads are not centrally managed. If you see a bunch of loads on Sylectus from Landstar you have to back solicit that one agent to get access to the freight.

Cut the bull Demaris, you know what your doing is wrong or you would not have started this thread. Your basically telling every broker on EO that if they have relationships with 3PL's and broker some of their freight your going to solicit that business you.see.on Sylectus. I got news for you, every company on EO has 3PL relationships they broker.

Nice business model! Beware brokers!!!!!

 

[CharlesD]

I think it's a bit of a stretch to say that we're sitting there fishing through the BOLs looking for freight sources. The 3PLs that we're dealing with are ones that in a lot of cases we were pursuing for a number of years and finally got in the door with. In some cases it was because we had to add more insurance coverage before someone would do business with us. Now in the course of waiting, we're still trying to book trucks, so we're going to take loads from wherever we can get them from, and at times some of those loads are going to originate from a source we've been pursuing or that we're waiting to get approved with. Then what happens when we get approved with that source if we might have done a couple of loads for someone else a few months prior?

I started this topic to ask some honest questions about a touchy topic. Here's an example. Right after I got my authority a few years ago I started pursuing as many freight sources as I could. Some 3PLs wouldn't deal with anyone under a certain number of trucks and I had to wait 4 or 5 years to get in the door with a couple of them. In the meantime we're getting brokered loads that occasionally originated from these sources. What should I have done when I finally get approved with them? Just tell them that I can no longer do business with them because we had hauled a load for a third party the year before? In every one of those cases we had solicited the source before hauling any if their loads for another party. What is a small carrier to do in such a case? It's not bull, just an honest question from a small carrier wanting to grow without stepping on toes.

 

[Rocketman]

I think it's a bit of a stretch to say that we're sitting there fishing through the BOLs looking for freight sources. The 3PLs that we're dealing with are ones that in a lot of cases we were pursuing for a number of years and finally got in the door with. In some cases it was because we had to add more insurance coverage before someone would do business with us. Now in the course of waiting, we're still trying to book trucks, so we're going to take loads from wherever we can get them from, and at times some of those loads are going to originate from a source we've been pursuing or that we're waiting to get approved with. Then what happens when we get approved with that source if we might have done a couple of loads for someone else a few months prior?

I started this topic to ask some honest questions about a touchy topic. Here's an example. Right after I got my authority a few years ago I started pursuing as many freight sources as I could. Some 3PLs wouldn't deal with anyone under a certain number of trucks and I had to wait 4 or 5 years to get in the door with a couple of them. In the meantime we're getting brokered loads that occasionally originated from these sources. What should I have done when I finally get approved with them? Just tell them that I can no longer do business with them because we had hauled a load for a third party the year before? In every one of those cases we had solicited the source before hauling any if their loads for another party. What is a small carrier to do in such a case? It's not bull, just an honest question from a small carrier wanting to grow without stepping on toes.

I would think that the best way to handle that situation would be to tell the party who your about to run the load for that you are currently pursuing that same shipper as a customer. Have the non-compete clause amended to both parties' satisfaction. Would seem the only truly legal way to get through it?

 

[CharlesD]

I would think that the best way to handle that situation would be to tell the party who your about to run the load for that you are currently pursuing that same shipper as a customer. Have the non-compete clause amended to both parties' satisfaction. Would seem the only truly legal way to get through it?

That would work if you know before the load picks up where it's coming from, which often isn't the case, unless it's NLM. A lot of times you don't even know after you pick up the load because that information isn't often on the BOL.

 

[jelliott]

How about this hypothetical situation. Company A has pulled many brokered loads from both companies B, C, and D. All of these loads came from UPS. Now company A keeps getting calls from UPS about their posted trucks on the alliance only for UPS to figure out that they are not an approved carrier for them and cannot move the load. Then UPS asks company A to become a qualified partner carrier with them so that they can see the emails, load board, and have office representatives call for availability on their empty units. What does company A tell UPS?

Technically UPS is the company that is soliciting the services of company A and not the other way around! Is this backdooring? I mean UPS is not a great secret, but they are very difficult to get signed on with! It's not like company A went out there trying to track down the main contact at UPS to sign up with them after they pulled a couple of double or "co-brokered" loads for then via companies B, C, and D? How does this scenario play out in the grand scheme of things?

In this type of scenario it doesn't really matter who contacted who. The carrier that signed the contract is legally obligated to uphold the contract. Just because you were not the one who made the approach, it doesn't change it in the eyes of the law. I don't have a great answer to this thread other than I strongly recommend that any carrier not sign legal contracts that they are not intending to honor.