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Dispatch_This · Joined: 10 Jan 2007 Posts: 141 Location: Barstow, CA.

Nope. Can't agree with that. Freight brokers, by law, can only function as a disinterested third party. They can't "buy" the load and then "sell" it. And claiming that a homebuyer has no right to ask the seller what he originally paid is irrelevent. It's akin to a trucker asking a shipper how much he spends to manufacture his product so the trucker can determine his rate.

We're talking about the third parties who handle these transactions. Real estate and listed securities brokers are heavily regulated because, historically, these markets attract scammers and thieves.

Congress did a half-a** job when they created property broker regulations in 1980. The laws were too general in scope, and virtually never enforced. That's a big part of the problem, right there.

solo379 · Joined: 14 Feb 2004 Posts: 3164

For those, who want to "cap" the rates, or profiting of any kind, i suggest you move to a communists countries. You might like that! :roll:
For me, "free market" and "antitrust law", is fair enough! 8)

no_worries · Joined: 18 Apr 2006 Posts: 863

I have to agree with dispatch on his assessment of how a broker was meant to operate. A real estate broker's primary concern is to close a deal. Getting you what you want obviously helps that along, but closing the deal is the only way they make money because they're working on a fixed commission. However, many brokers approach their business just as Rev described. While they don't actually take possession, they often conduct their business as if they had; getting as much as they can from the shipper and giving as little as possible to the carrier with little thought given to their intended role of facilitating transactions and bringing increased efficiency to the marketplace.

Rev.Vassago · Posted: Fri Apr 04, 2008 3:03 pm Post subject:

Dispatch_This wrote: Nope. Can't agree with that. Freight brokers, by law, can only function as a disinterested third party. They can't "buy" the load and then "sell" it.

I wasn't speaking literally. :roll:

Quote: And claiming that a homebuyer has no right to ask the seller what he originally paid is irrelevent. It's akin to a trucker asking a shipper how much he spends to manufacture his product so the trucker can determine his rate.

Exactly. So why is it relevant to you what the broker is getting from the shipper for the load? If you have negotiated a rate for the load that you are comfortable with, then the broker has done his or her job. If the rate is something you aren't comfortable with, then don't haul the load. But there is no law, nor should there be a law, that says the broker has to give you what you want to haul the load. If that is too much of a hassle, then go lease to a company where every load pays the same.

Dispatch_This · Joined: 10 Jan 2007 Posts: 141 Location: Barstow, CA.

Geez. I give up. :roll:

whoopNride · Joined: 12 Jan 2008 Posts: 16

[quote="Rev.Vassago"] Dispatch_This wrote: Nope. Can't agree with that. Freight brokers, by law, can only function as a disinterested third party. They can't "buy" the load and then "sell" it.

I wasn't speaking literally. :roll:

Quote: And claiming that a homebuyer has no right to ask the seller what he originally paid is irrelevent. It's akin to a trucker asking a shipper how much he spends to manufacture his product so the trucker can determine his rate.

Exactly. So why is it relevant to you what the broker is getting from the shipper for the load? If you have negotiated a rate for the load that you are comfortable with, then the broker has done his or her job. If the rate is something you aren't comfortable with, then don't haul the load. But there is no law, nor should there be a law, that says the broker has to give you what you want to haul the load. If that is too much of a hassle, then go lease to a company where every load pays the same.

QUOTE:

I have to agree Rev. if I dont get the Rate I want from a broker, I dont move his freight.. I really don't care what he is getting paid.[/b]

Rev.Vassago · Posted: Fri Apr 04, 2008 5:15 pm Post subject:

whoopNride wrote:
I have to agree Rev. if I dont get the Rate I want from a broker, I dont move his freight.. I really don't care what he is getting paid.

I guess the problem is that these independents don't want the broker to make too much money. My position is that if the broker made too much off the load, it was because you didn't negotiate it properly. But if the rate was good enough for you to haul it, then there's no reason you should be complaining.

I know everyone loves when I mention Steve Booth, but it is a perfect example. He took a load into Canada about a month or so back that he got $1.80 per mile for. Obviously, that was an acceptable rate for him, and so he moved the load. He found out after the fact that the broker got about $3.40 per mile for the load. Should he complain? No way! (and if I remember correctly, he wasn't) It is up to each individual carrier to know what is an acceptable rate for hauling. It isn't up to each individual carrier to know what kind of markup the broker is taking on the load.

Would those who are complaining about brokers rates feel comfortable disclosing to the broker what your expenses are, so they can decide if you really need what you claim you do? After all, if you expect them to disclose to you what the load paid, then you should be willing to disclose to them what you truly need to earn on the load to turn a profit.

NotSteve wrote: What I would like to see happen is a new type of company start up that charges a fixed fee. Same as a broker only the fees are known and proven up front. I think someone like that could make up the loss of income in shear volume. I also think the manpower to run a brokerage house like that would require a lot less people. If the broker were to post every single rate on the load board it would be a simple process of owner operators just grabbing them off the boards.

Such a system already exists. It's called Landstar. :lol:

GMAN · Joined: 13 Feb 2005 Posts: 9909 Location: Tennessee

If you lease to a carrier who pays percentage, you are entitled to see the original confirmation sheet which shows the rate paid. If you run your own authority, there are no such provisions for disclosing the rate to the carrier. If you really want to know what the broker is making, you can always ask the shipper when you pick up the load. Sometimes it is the receiver or consignee who pays the freight.

The best way to fight these tactics is to hone your negotiating skills and refuse to haul cheap freight. Be prepared to deadhead out of an area where rates are too cheap. If you cannot get a rate that is acceptable to you, then you should refuse to take it. Just deadhead out to a better area. I think this is where a lot of independents and owner operators have a problem. They go into bad freight areas and don't have the money to buy fuel to get to a better area. If you want to go to a bad freight area you should be getting a high enough rate where you can deadhead out.

If you are not comfortable negotiating rates then perhaps you would be better off either leasing to a carrier or contract with a good dispatch service to find decent paying loads for you. We are in a difficult time in this country. Things should begin to improve due to coming into the summer months. Freight usually move better during this time. Fuel will continue to be a problem, but you can compensate by raising your minimum haul rate where you can offset those higher costs with higher rates.

Paul McGraw · Joined: 05 Nov 2006 Posts: 94 Location: Georgia

Doghouse I hope that you succeed.

Freedom without limits is anarchy. Imagine our roads and highways without traffic laws and regulation. Lots of freedom, but also lots of death and destruction. Capitalism without regulation is likewise anarchy. If you have never read the speeches of Teddy Roosevelt on the subject I would submit that he said it all much better than I ever could. Capitalism must be regulated for the good of the nation, the society and ultimately, the Capitalists themselves. Doghouse I think that by pointing out to politicians the similarities between TR's work to reign in the Robber Baron's of his day and your proposals you might strike a chord with some.

CH Robinson is the largest broker in the U.S. and they are earning record profits this year. One reason profits are up is that they have been able to increase rates to shippers because of high fuel prices but are not passing along the increases to the the truckers moving the freight and paying for the fuel. Their stock is doing very nicely. CHR has gradually increased the percentage of the freight bill that they take and it is now over 18%. Gross Profit for 2007 was $1.2 Billion!

Ridge Runner · Joined: 18 Oct 2004 Posts: 2588 Location: North Ga.

Rev.Vassago wrote: whoopNride wrote:
I have to agree Rev. if I dont get the Rate I want from a broker, I dont move his freight.. I really don't care what he is getting paid.

I guess the problem is that these independents don't want the broker to make too much money. My position is that if the broker made too much off the load, it was because you didn't negotiate it properly. But if the rate was good enough for you to haul it, then there's no reason you should be complaining.

I know everyone loves when I mention Steve Booth, but it is a perfect example. He took a load into Canada about a month or so back that he got $1.80 per mile for. Obviously, that was an acceptable rate for him, and so he moved the load. He found out after the fact that the broker got about $3.40 per mile for the load. Should he complain? No way! (and if I remember correctly, he wasn't) It is up to each individual carrier to know what is an acceptable rate for hauling. It isn't up to each individual carrier to know what kind of markup the broker is taking on the load.

Would those who are complaining about brokers rates feel comfortable disclosing to the broker what your expenses are, so they can decide if you really need what you claim you do? After all, if you expect them to disclose to you what the load paid, then you should be willing to disclose to them what you truly need to earn on the load to turn a profit.

NotSteve wrote: What I would like to see happen is a new type of company start up that charges a fixed fee. Same as a broker only the fees are known and proven up front. I think someone like that could make up the loss of income in shear volume. I also think the manpower to run a brokerage house like that would require a lot less people. If the broker were to post every single rate on the load board it would be a simple process of owner operators just grabbing them off the boards.

Such a system already exists. It's called Landstar. :lol:

Quote:
--------------------------------------------------------------------------------

If you lease to a carrier who pays percentage, you are entitled to see the original confirmation sheet which shows the rate paid. If you run your own authority, there are no such provisions for disclosing the rate to the carrier. If you really want to know what the broker is making, you can always ask the shipper when you pick up the load. Sometimes it is the receiver or consignee who pays the freight.

The best way to fight these tactics is to hone your negotiating skills and refuse to haul cheap freight. Be prepared to deadhead out of an area where rates are too cheap. If you cannot get a rate that is acceptable to you, then you should refuse to take it. Just deadhead out to a better area. I think this is where a lot of independents and owner operators have a problem. They go into bad freight areas and don't have the money to buy fuel to get to a better area. If you want to go to a bad freight area you should be getting a high enough rate where you can deadhead out.

If you are not comfortable negotiating rates then perhaps you would be better off either leasing to a carrier or contract with a good dispatch service to find decent paying loads for you. We are in a difficult time in this country. Things should begin to improve due to coming into the summer months. Freight usually move better during this time. Fuel will continue to be a problem, but you can compensate by raising your minimum haul rate where you can offset those higher costs with higher rates.

These two posts sum it up well. If you can't grasp these two posts then you need to park it (and sell it).

Ridge Runner · Joined: 18 Oct 2004 Posts: 2588 Location: North Ga.

Paul McGraw wrote: Doghouse I hope that you succeed.
Freedom without limits is anarchy. Imagine our roads and highways without traffic laws and regulation. Lots of freedom, but also lots of death and destruction. Capitalism without regulation is likewise anarchy. If you have never read the speeches of Teddy Roosevelt on the subject I would submit that he said it all much better than I ever could. Capitalism must be regulated for the good of the nation, the society and ultimately, the Capitalists themselves. Doghouse I think that by pointing out to politicians the similarities between TR's work to reign in the Robber Baron's of his day and your proposals you might strike a chord with some.

CH Robinson is the largest broker in the U.S. and they are earning record profits this year. One reason profits are up is that they have been able to increase rates to shippers because of high fuel prices but are not passing along the increases to the the truckers moving the freight and paying for the fuel. Their stock is doing very nicely. CHR has gradually increased the percentage of the freight bill that they take and it is now over 18%. Gross Profit for 2007 was $1.2 Billion!

:roll: All I can say is good luck with that thought process.

merrick4 · Joined: 08 Nov 2006 Posts: 881

I hauled a few times for a broker that use to tell me what he made on each load. To be honest though I couldn't understand why he was doing that.

First off I didn't believe him and second off I don't care what he made. I always say I don't count other people's money.

I would like to see some transparency in all of this though. One load sticks in my mind. A guy was offering me I think something like $1200 to go from Illinois to North Carolina. I didn't take it but I got to talking to him and in the end he said to call him back if I want it; that he can pay $1600 as he had it for $1650.

I remember thinking I can't believe that guy just tried to make $400 off that load. True as people say don't haul cheap, and in fact I didn't take the load, but the way this system is set up there's is a lot of room for abuse.

When someone hauls cheap, it doesn't just hurt that person, it hurts all of us. No need to pay a decent rate on a load if some fool is going to work for free. And someone is ALWAYS going to work for peanuts. People have been complaining about others hauling cheap for decades (that is per a friend of mine that had his own authority since before deregulation)

Anyway I like the flat fee rate. I should be up and brokering myself within the next couple of weeks. I have been pretty open with everything so far and will be more than happy to post how that goes with charging a flat fee.

One thing, I don't think it would be smart to post the rate on the load board as someone else would just see what you are offering and then go under bid you to the shipper.

Dispatch_This · Joined: 10 Jan 2007 Posts: 141 Location: Barstow, CA.

no_worries wrote: ... getting as much as they can from the shipper and giving as little as possible to the carrier with little thought given to their intended role of facilitating transactions and bringing increased efficiency to the marketplace.

Bingo. Did anyone read what no_worries posted?

Brokers frequently overcharge shippers and underpay carriers, leaving less money for growth, equip. maintenence, and ROI.

Loads are all too often co-brokered 2 and 3 times to preserve their marketshare which benefits only the brokers.

Carriers get stiffed when broker goes under because there is nothing (other than a measley $10,000 bond) compelling them to meet their fiduciary responsibilities.

And I won't get in to how badly they have screwed up the cargo claims process, due to their false since of entitlement.

All of these things create INEFFICIENCIES in the MARKETPLACE.

Rev.Vassago · Posted: Fri Apr 04, 2008 8:37 pm Post subject:

Dispatch_This wrote:

Brokers frequently overcharge shippers and underpay carriers, leaving less money for growth, equip. maintenence, and ROI.

Loads are all too often co-brokered 2 and 3 times to preserve their marketshare which benefits only the brokers.

Carriers get stiffed when broker goes under because there is nothing (other than a measley $10,000 bond) compelling them to meet their fiduciary responsibilities.

And I won't get in to how badly they have screwed up the cargo claims process, due to their false since of entitlement.

All of these things create INEFFICIENCIES in the MARKETPLACE.

Brokers are middlemen. Most industries in a capitalist society have middlemen. If you don't want to deal with them, then find a new line of work, or a way around them, because they aren't going away.

Paul McGraw · Joined: 05 Nov 2006 Posts: 94 Location: Georgia

Dispatch_This wrote:
Brokers frequently overcharge shippers and underpay carriers, leaving less money for growth, equip. maintenence, and ROI.

Loads are all too often co-brokered 2 and 3 times to preserve their marketshare which benefits only the brokers.

Carriers get stiffed when broker goes under because there is nothing (other than a measley $10,000 bond) compelling them to meet their fiduciary responsibilities.

And I won't get in to how badly they have screwed up the cargo claims process, due to their false since of entitlement.

All of these things create INEFFICIENCIES in the MARKETPLACE.

Exactly! In the long run they are sowing the seeds of their own destruction and do not realize it. Anybody see the write-up on CHR in Business Week? These guys do not feel guilty about their actions, they BRAG about them!

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