[Paul McGraw]

Originally Posted by ironeagle_2006

Guys look at thing this way right now broker that has been in business for years could decide that I am going to retire and take all the drivers money I can right now. So he stops paying drivers and keeps their payments and ends up with say 500K-750K would not take long if he did alot of loads correct. Closes his doors and all anyone can collect on is that ridiculos 10K in bond money that was put up. It has happened in the past and will happen in the future. The DOT needs to regulate these people better and they are not CHR is one of the worst hell they were bad in the 90's giving 75 cents to the truck out of CA on dry van stuff yet I know that it was paying them 1.40 a mile if not more.

Very true. The small carrier would be an unsecured creditor with very limited legal recourse. You could get a lawyer and sue, but it would be expensive and take months and possibly years to get a judgement. And once you have a judgement then you have to spend more money to attempt to attach an asset. Meanwhile the debtor can delay and try to hide assets with impunity. In short, the lawyer will advise the carrier to simply write off the bad debt and forget about it and the broker walks away with the money. If you read the forums on Get Loaded you will see this happening every few months like clockwork.

[Ridge Runner]

Originally Posted by no_worries

By all means, do proceed to educate me on how the free market works and the role of a broker in said market.

OK. I'll keep it simple. I have something I want done. The middle man says I can get it done for XXX dollars. I say that is fair with me. The middle checks around and finds someone that will do the job for less than XXX. The middle man keeps the difference. The man doing the job does so at a price he is willing to work for.

Even if your a company driver you work for a middle-man. The company you work for ( big ) has a contract with a shipper ( big ) to move their product. The company says : " I'll provide the truck, trailer, fuel, maint. ect.... and I'll pay you XXX per mile to move it. Same thing! You can say either YES or NO. When a company can't get anybody to pull their frieght at .20/mile then they raise ther pay till drivers will work for them. If they don'r raise their pay they will lose business.

Bottom line: QUIT HAULING CHEAP FRIEGHT!!!

[merrick4]

The only problem with that Ridge Runner is that's not how the world works. Why people would work for below their costs or cheap I don't know. You ever read that book "The Jungle"? Why would people work under those conditions? Yet it took that book, not people refusing to work under barbaric conditions, to change the meat packing industry. I hate to say it, but sometimes people need to be saved from themselves.

[rank]

big trucking company with cpm of $2.25 charges shipper $4.
big trucking company brokers freight at $1.50 and profits without turning a wheel.
If BTC cannot sell loads at $1.50 they move the loads themselves. You have NO chance of getting more money unless a truck falls off the load and they get stuck.

[Paul McGraw]

Originally Posted by merrick4

The only problem with that Ridge Runner is that's not how the world works. Why people would work for below their costs or cheap I don't know. You ever read that book "The Jungle"? Why would people work under those conditions? Yet it took that book, not peole refusing to work under barbaric conditions, to change the meat packing industry. I hate to say it, but sometimes people need to be saved from themselves.

Great point! And your comparison with "The Jungle" is right on the money. It is sad but true. Human nature is mysterious.

[Rev.Vassago]

Originally Posted by ironeagle_2006

CHR is one of the worst hell they were bad in the 90's giving 75 cents to the truck out of CA on dry van stuff yet I know that it was paying them 1.40 a mile if not more.

Nobody puts a gun to anyone's head and makes them haul that $0.75 freight.

[Ridge Runner]

Originally Posted by Paul McGraw

Ridge Runner,

My background is in economics and I worked in commercial banking for over 20 years. I know of no reputable economist alive today that supports laissez-faire economics in the most extreme form you seem to be espousing. Market anarchists do take laissez-faire to its logical extreme but no one takes them seriously. Even Laffer and Friedman, the most notable pure capitalists of our era, acknowldge the indespensible role of regulation to a successful free market.

Perhaps this analogy will help you. If you want to buy diesel for your truck, you compare prices and convenience and can make an informed choice as to where to buy fuel. But what if government did not regulate the exact amount of a gallon? If a gallon at Pilot was different than a gallon at TA, how could you be an informed purchaser? And what if diesel was not regulated as to a precise chemical formula? What if Love's diesel had only half the energy content of Pilot diesel, BUT YOU DID NOT KNOW IT? In the complex and technically advanced society we live in today, the role of government as arbiter is not "interference" it is mandatory to the creation of a functioning exchange of goods and services that benefits buyers, sellers and the community.

Well, I will not try to un-do what a college education has done to you. :P

I will say that we are talking about two different things. You are talking about weights and measures. In that respect things need to be on a level playing field. Hell, here in Ga. by LAW you can only sell firewood by the cord.

But what we are talking about here is someone saying: " I want you to move a product from point A to point B. This is what I will pay. It is up to the O/O to decide if he wants to move it at that price. No one is forcing him to move it and if he does he is doing it of his own free will. So why should the Goverment get involved in the transaction???

[Ridge Runner]

I do want to add one more thing. This has been one of the best debates I have been in, in a long time. No attacks, flames, ect.... Even tho we have different opinions it was kept to a respectful level. I haven't read the book.... but I will. This is the kind of debate we ALL learn from.


Ridge

[Paul McGraw]

Originally Posted by Ridge Runner

Well, I will not try to un-do what a college education has done to you. :P

I will say that we are talking about two different things. You are talking about weights and measures. In that respect things need to be on a level playing field. Hell, here in Ga. by LAW you can only sell firewood by the cord.

But what we are talking about here is someone saying: " I want you to move a product from point A to point B. This is what I will pay. It is up to the O/O to decide if he wants to move it at that price. No one is forcing him to move it and if he does he is doing it of his own free will. So why should the Goverment get involved in the transaction???

Un-do what a college education has done TO me? Is that really helpful?

As TR said:
"Let the watchwords of all our people be the old familiar watchwords of honesty, decency, fair-dealing, and commonsense."... "We must treat each man on his worth and merits as a man. We must see that each is given a square deal, because he is entitled to no more and should receive no less. The welfare of each of us is dependent fundamentally upon the welfare of all of us."

How does that apply to brokers? Three things.

First transparency. There should be full disclosure to everyone of how much is being paid and received by each party. Both the shipper and the carrier would benefit from this, and since they are employing capital and making the greatest contribution to the economy the market will benefit from full disclosure. Only the broker benefits from secrecy.

Second bonding. There is a well established history of brokers not paying their bills that justifies a requirement that brokers should be bonded for 100% of the amount they owe to carriers. Anything less punishes the innocent and hard working and benefits the dishonest. Our society generally believes that we all benfit from protecting the innocent and hard working from being abused.

Third standardization. Just as a governemnt has regulted standards in auto loans and home mortages, a regulation that standardizes the agreement between shippers, brokers and carriers would promote effieciency, save huge amounts of time in millions of daily transactions, and insure a level playing field for all market participants. Only lawyers would object as thousands of hours of unproductive litigation would be eliminated.

If these steps were taken I dont think regulation of the specific percentage taken by the broker would be needed. The market would adjust to properly reward the application of capital and effort as free markets usually do when corruption is rooted out. Just as in the example of the diesel fuel, these steps would make sure that all participants in the market are fully informed, operate on a level playing field, and can thus make rational decisions, that ultimately stengthen the free market and society.

[Rev.Vassago]

Originally Posted by merrick4

The only problem with that Ridge Runner is that's not how the world works. Why people would work for below their costs or cheap I don't know. You ever read that book "The Jungle"? Why would people work under those conditions? Yet it took that book, not people refusing to work under barbaric conditions, to change the meat packing industry. I hate to say it, but sometimes people need to be saved from themselves.

But why should it be the government's job to save the businessman who is hauling that cheap freight? In a free market society, it is up to each of us to succeed or fail on our own accord. Now I know someone will bring up government subsidies (as has already been brought up in this thread), but that is a completely different issue. If that is what you are asking for, then you are simply asking for welfare.

Originally Posted by Ridge Runner

I do want to add one more thing. This has been one of the best debates I have been in, in a long time. No attacks, flames, ect.... Even tho we have different opinions it was kept to a respectful level. I haven't read the book.... but I will. This is the kind of debate we ALL learn from.

Gimme 5 minutes and I'll change that.

Originally Posted by Paul McGraw

As TR said:
"Let the watchwords of all our people be the old familiar watchwords of honesty, decency, fair-dealing, and commonsense."... "We must treat each man on his worth and merits as a man. We must see that each is given a square deal, because he is entitled to no more and should receive no less. The welfare of each of us is dependent fundamentally upon the welfare of all of us."

That isn't how capitalism works. That is Socialism.

First transparency. There should be full disclosure to everyone of how much is being paid and received by each party. Both the shipper and the carrier would benefit from this, and since they are employing capital and making the greatest contribution to the economy the market will benefit from full disclosure. Only the broker benefits from secrecy.

Do you know how much the groceries that you buy cost? Do you know how much the manufacturer paid for each part that went into your truck? When you take your truck in for repairs, do you know how much they are paying their shop labor? Why would it be any different when it comes to a broker? You accept or reject it based upon the rate it is offered to you for. If you choose to accept it for a price that isn't beneficial to the survival of your business, then it is nobody's fault but your own. If you feel you didn't get enough out of the deal, then it is nobody's fault but your own.

Second bonding. There is a well established history of brokers not paying their bills that justifies a requirement that brokers should be bonded for 100% of the amount they owe to carriers. Anything less punishes the innocent and hard working and benefits the dishonest. Our society generally believes that we all benfit from protecting the innocent and hard working from being abused.

This I can agree with, and I think it would do wonders for cleaning up the brokerage industry.

Third standardization. Just as a governemnt has regulted standards in auto loans and home mortages, a regulation that standardizes the agreement between shippers, brokers and carriers would promote effieciency, save huge amounts of time in millions of daily transactions, and insure a level playing field for all market participants. Only lawyers would object as thousands of hours of unproductive litigation would be eliminated.

If these steps were taken I dont think regulation of the specific percentage taken by the broker would be needed.

Isn't that exactly what you are talking about above? You want a rate standard, which is pretty much the same thing as a percentage standard.

The market would adjust to properly reward the application of capital and effort as free markets usually do when corruption is rooted out.

The market is capable of doing that now, but chooses not to.

Just as in the example of the diesel fuel, these steps would make sure that all participants in the market are fully informed, operate on a level playing field, and can thus make rational decisions, that ultimately stengthen the free market and society.

Why exactly should the playing field be level? That only supports the lowest common denominator.