[Doghouse]

Hey guys first let me say that you have put out some great information for me to work with and also you've done a great job of keeping this thread focused.


I am very interested in our capitalist system,..it's what makes this country great. I have been in many fields making money in all of them, and the system works. I don't want to move to a communist country.

That said, I still think that there should be a cap on what the middle man who does practically nothing should make in the transaction. It's not that I don't think they are doing nothing, they do provide a valuable service,..kind of a one stop shopping for shippers and carriers. The problem that I see is that they start competing with each other and they force the rate down. Then the larger companies like CH see how low they can place freight on our trucks,..and then CH runs the rate down., Then the shippers see the same thing and they run the rate down.

The easy thing for all of us is to not run cheap freight, find direct shippers and forget about the brokers. The thing is,...I think that as time goes by, the more shippers will lower their rates to match what the brokers are paying the carriers. This all leads to a mess. Good paying shippers will be low paying shippers and so on and so on.

If we can put a stop to what the brokers are doing (or atleast make it easier to find out what the shippers are paying, and I mean before the negotiation between the broker and carrier) then all we have to contend with is the shippers. They can't blame the brokers, and the brokers can't blame the shippers. The brokers have been living in this grey area for a long time,...to send some light in there can only help.

I ask my self why do I want to do this for OO's who are too lazy to get out and beat the street (hey, I did it,.and I have some good paying shippers). My response is that if something is not done now,..then what will trucking be like 10 years from now,....will we be running for the same rates?, will the shippers and brokers continue to force the rate down?

I don't know,...I sure don;t want to give another OO the upper hand over me,..but I also don't want to see a guy being forced to run for $1 per mile. Is the driver being forced to,....no absolutly not,....or so it seems. When one driver has a break even point lower than the other,..than the one driver will make more $$. Why should the broker get the $$ when the OO is the one who is running smart with efficient tools.


I apologize for seeming scattered, but I have been in contact with no less than 20 people over this, from OOIDA's political action group to Kevin on XM, from Senator Bill Nelson's aid to 10 reps in the Florida house. Some think this is a valid fight that has good and bad points,..some say screw the OO who can't make it. I am still not sure what to do,...but like somebody said in this thread,...at least I'm making people open their eyes to a problem.

Thanks again everyone for keeping this focused,.....I'm frazzled!!!!!

[Rev.Vassago]

Originally Posted by hoohaa

a broker bond works much the same way as a carriers insurance.

A carrier needs 1,000,000 dollars of Liability insurance.
He does not put up this million dollars himself.
He pays an insurance company a yearly premium .

same with the brokers bond.
They do not put up the 10,000 dollar bond in cash, they pay an annual premium.
The price depends on their credit.

I checked into this, and it would cost me 500 dollars a year to get a brokers bond.

I stand corrected.

If you raised the bond to lets say a million dollars, then anyone trying to get a brokers bond, would have to have some decent credit, or pay a hefty premium.

This would weed out the guy in the basement brokering loads in his underware, with a phone, and a fax machine.

I can't disagree with that.

[Rev.Vassago]

Originally Posted by Doghouse

That said, I still think that there should be a cap on what the middle man who does practically nothing should make in the transaction. It's not that I don't think they are doing nothing, they do provide a valuable service,..kind of a one stop shopping for shippers and carriers. The problem that I see is that they start competing with each other and they force the rate down. Then the larger companies like CH see how low they can place freight on our trucks,..and then CH runs the rate down., Then the shippers see the same thing and they run the rate down.

But like I said before, the focus of your frustration and anger is directed in the wrong place. You are blaming the broker, when you should be blaming the carrier. The broker can offer the freight as low as they want, but if there is no carrier willing to move it, then all the discounting in the world is futile. A cheap rate is only a cheap rate if a carrier hauls it for that rate. Otherwise, it is only wishful thinking on the broker's part.

I don't know,...I sure don;t want to give another OO the upper hand over me,..but I also don't want to see a guy being forced to run for $1 per mile. Is the driver being forced to,....no absolutly not,....or so it seems. When one driver has a break even point lower than the other,..than the one driver will make more $$. Why should the broker get the $$ when the OO is the one who is running smart with efficient tools.

The driver running for $1 per mile is doing nobody in this business any good, and to be honest, deserves to fail, and should fail. By supporting him, you are helping to drag the rest of the industry down (and believe me - regulating brokers is only supporting that $1 per mile driver, as he is the cause of the low rates in the first place). I would rather see 1000 carriers operating at decent rates, than 10,000 carriers with regulations in place to force brokers to give them decent rates. I don't understand your motivation in supporting the lowest common denominator in the transportation industry.

Focus your efforts where they will do more good - by convincing carriers to stop hauling that cheap freight. Then, and only then will the brokers be forced to increase those rates you feel are too low.

[Doghouse]

A bunch of other things so the brokers don't think I am trying to go for their throat.
1.I don't care if the bond stays at 10,000 to me thats the OO's job to check the broker out and make sure they are legit.
2.I don't want to shorten the "days to pay" on them,,again this info is up front as well.
3.I don't care if they offer a quick pay for 5%, again that is part of the negotiation.
4.I don't wish to force anyone who choses to work in their undies to put on pants.

I'm not anti-broker at all, but like the real estate brokers,...enough is enough, because they were cutting into a homeowners equity, just like the brokers are cutting into carriers profit.
When a load is put out there for $5,000.00 and the broker gets thier 10% thats $500.00 for a couple of hours work,....and let me tell you, thats all it would take,..loads would move like the wind if the brokers would stop trying to keep,..some of them,....70% of the freight bill.

[GMAN]

The main problem we have in this industry as far as rates are concerned are the owner operators and carriers who are more than willing to take the cheap freight. Some industries do seem to have standardized rates for brokers, such as stock brokers and real estate brokers. They all seem to charge about the same commission for their services. Most freight brokers don't want to disclose how much they charge on a load. Some do. However, as someone mentioned earlier, you really don't know if they are being truthful with you or not. I think some transparency would be good for the industry. It would let both the shipper and carrier know what is going on with the money. I have never been one to support more regulations, but the transparency on the bills would be good. After all, they show the gross rate on government loads. Why not on those in the private sector? Having said that, no amount of government regulations will make good businessmen out of those who have no business savvy. If we start putting regulations on how much anyone can charge, it helps to sustain those who are poor business people and hinder those who are good businessmen. Right now we have something akin to a market free for all. Only the strong will survive.

[Rev.Vassago]

Originally Posted by Doghouse

When a load is put out there for $5,000.00 and the broker gets thier 10% thats $500.00 for a couple of hours work,....and let me tell you, thats all it would take,..loads would move like the wind if the brokers would stop trying to keep,..some of them,....70% of the freight bill.

But.........

What is to say that you couldn't haul that $5000 load for $3000? After all, it's only a couple days work, and let me tell you, that's all it would take.

The street you are going down is a 2 way road, and if you want to expose brokers, you'll also be exposing yourself, and every good paying load you've ever hauled or will haul. I certainly don't want that. I like the idea that I am making more money than the guy in the next truck. It's certainly not my fault that he can't figure out how to do what I'm doing.

[Rev.Vassago]

Originally Posted by GMAN

Right now we have something akin to a market free for all. Only the strong will survive.

I agree completely. Unfortunately, those carriers that are hauling cheap freight are making the brokers who offer that cheap freight stronger, and I believe this is the basis for Doghouse's argument. Which is why I think his anger is misdirected.

[Doghouse]

You make some good points Rev, and one part of me want's to just accept that. The only thing that stops me is that I think the brokers started this from their greed. If it was the carriers who started undercutting the carriers to the brokers then that is their fault,..but if % is set for the brokers, then we would find out if its the carriers/shippers/brokers who are doing this.

What you say makes complete sense,..even in my burnt mind right now,...its the one thing that has be pausing before my next move. I mean,..why would I want to help another OO if they are just going to go undercut me? At that point,...I want to say screw the other OO. I'm doing fine,......so can you with out my help.

[Doghouse]

Thats one way Gman,,,to make the information avail. during the negotiation. Then we would know who is scamming who. Right now, in the fast paced faxing/signing/sending process,..the process to find out what the shipper really payed slows the transaction to a crawl,....and even then,..are they telling the truth.

[no_worries]

hoohaa, thanks for pointing that out. I just took it for granted that most everyone who's worked with brokers knew how the bond worked.

DH, I don't think that a cap of any kind is the answer, let the market set the price. But make sure it's an informed and efficient market, that's the role of regulation.

I agree with what GMAN said about transparency. To me, that would be the one issue that would benefit the industry most. If you're making more than the next guy solely because of a lack of information, that situation will be short-lived. Personally, I have no problem spelling out my costs to any broker or shipper that is interested. I expect to make more because of the service provided, not because the guy next to me is a dumbass. In fact, those that provide superior service should be in favor of more transparency.