Brokers make what?

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!

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/

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.

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.

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.

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.

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.

Eric, you mean 2.25 a running mile ,right?

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.

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.

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.