owner operator broker loads and has own authority

[rank]

They are guessing!

some have more experience than others

[Steel Horse Cowboy]

They are guessing! One agent i did a load for emailed me today asking if I could tell them what a good rate would be for this particular load. It was for a VAN trailer from Montana into SK, Canada... I'm pulling a step, so I told them, "I"m not an expert on van loads, but I'd suggeest - around $2/mi." They thanked me and said it'd be their starting point for negotiations with drivers

Especially with LS, as most drivers on the van division run LS trailers...... $2 per mile would be good!

[GMAN]

I was curious if any of you know how brokers go about deciding what they are going to pay for a load to be moved and what portion they are going to keep for themselves? I know that it depends on where you are going and what you're hauling but there must be somewhat of a standard right????? I mean I'm hearing anywhere between 20 and 40 %????

I have done business with one broker who takes 10% off the top. Another that I spoke with in Texas takes $50/load no matter what it pays. I think that most brokers will take from 10-30%. A few will try to take 50%. They usually determine what they want to pay by subscribing to loadboards which give the rates for specific lanes. It is basically what the market will bear. Over time brokers will get a feel of what certain carriers will take. I have a guy whom I do a fair amount of business whom I have done a fair amount of business who told me, only yesterday, when asked about rates on some loads that he had that they were not MY rates. In other words, he knows that I won't take a load below a certain point. He also knows that his company won't have any difficulty moving those cheap loads. Rates are all over the place. Some brokers pay higher rates than others. Every load is a negotiation. Most will post or attempt to move a load at the cheapest rate possible early in the week. If they don't move it the rate will usually go up until they find someone who is willing to take it. If a load hasn't moved by Friday then you can often get a good rate, because it MUST move. Had they paid a fair rate in the beginning they could likely have moved it the first part of the week.

Double brokering is a part of this business. Some carriers have their own brokerage businesses within their company. They will first broker it from one side to the other in-house business with each getting their cut. Some carriers who have owner operators do this. They get a load through their brokerage business. The brokerage business takes their cut and then brokers it to the parent company. It is then offered to the owner operator. Even if the brokerage takes 20% and the carrier takes 25% you have already lost 45% of your rate before seeing a penny to the owner operator. There are more doing this than you may know.

Brokers will find the right rate for what they want to move. There is always a poor sucker who is willing to take a load for less than $1/mile to pay for his fuel to get out of a bad area. The shipper could actually be paying $2/mile or more to move the load, but the broker will only pay as much as he must to move the load. Some are fair in their dealings with carriers. Others seem to like to take advantage of a situation where there is little freight or a large capacity of trucks. It is supply and demand.

[Steel Horse Cowboy]

Very true Gman.... I know at LS they take 10% out the gate. They claim it's for insurance, billing and so on.... then you see the rate, and only get your percentage of that. Say it's 72%, then LS gets ANOTHER 28% to divide up how they want, be it to the broker, or just in their pocket. They make a killing doing what they do.......... I can't hate em, cuz if I knew the secret to it, I'd be sitting at home doing it to!

[RostyC]

Let's not forget about the shippers either, they have educated themselves as well.

[GMAN]

Shippers are much more savvy about rates and how brokers work the system. Some shippers would prefer to not deal with brokers, but it is much easier for them to make one phone call to move 20 loads than 30 or 40 calls or more to find enough trucks. The best thing to do is not worry about what the broker makes. If you can live with the rate then take the load. If not, walk away and keep looking. You can also make your own sales calls and find your own shippers. A smaller shipper may be more willing to work with a small carrier than someone who uses a lot of trucks.

[tracer]

... Some carriers have their own brokerage businesses within their company. They will first broker it from one side to the other in-house business with each getting their cut. Some carriers who have owner operators do this. They get a load through their brokerage business. The brokerage business takes their cut and then brokers it to the parent company. It is then offered to the owner operator. Even if the brokerage takes 20% and the carrier takes 25% you have already lost 45% of your rate before seeing a penny to the owner operator. There are more doing this than you may know.

Wow .. I didn't know they did that. I'm pretty sure my previous place of employment in Guelph ON screwed up owner-operators in this way. No wonder they always declined to tell us what each load paid. This is one more reason to get your own authority. It is not easy, but then you just decrease dramatically the amount of culprits who will cut off pieces of the pie.