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Originally Posted by Doghouse
At this point I am carrier vs carrier, and I ask myself,.."why would I run this for $3,000" if there is $5,000 on the sheet? Who benifits from this undercuttuing, well the broker of course,...I mean the broker is not going to send the shipper a refund check,...so now we know that this particular transaction is a carrier issue. Then the whole process starts again, and 20 years later we are back to $1 freight. I'm glad you put it that way,....I'm sad to say that the ethical side of my though pattern would not allow me to see that carriers would screw carriers,...because I wouldn't do it to another,..but that's just me.
Unfortunately in the transportation industry today, it seems to be a race to the bottom. Carriers are attempting to lowball each other, and the broker reaps the profits. I simply do not see how this is the fault of the broker.
Unfortunately, there are far too many carriers, and not enough freight. If the requirements for obtaining motor carrier authority were stricter, however, then many carriers who are in business today would not be in business tomorrow. This is why I have always advocated tighter regulations in regards to the driver himself - if you make the regulations unfavorable for the driver who survives by running illegal, then the overall amount of drivers will decrease, and the leverage will once again be put in the motor carriers' hands, rather than in the brokers' hands. Take the fight to the carriers, and the rates will rise.
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Let me ask you this,...do you think it would help the situation at all if the brokers were limited to 10%?
I honestly don't. I believe that if brokers were limited to 10%, you'd find that many brokers wouldn't be able to survive without raising the rates that they charge shippers. After all, if a broker was making $200 on a $800 shipment before (25%), and you want to limit their take to $80 on that same shipment, then they will be forced to try to raise that overall rate to $2000 just to earn the same money they were before. You know as well as I do that no shipper in their right mind would pay $2000 for what they were getting for $800 before. They will simply stop dealing with brokers altogether, and start dealing with carriers directly. Independents would be putting themselves out of business in this scenario.
The supply of carriers in relation to the supply of available freight is far too skewed at this point. This is one of the reasons why a slow down, shut down, or "strike" would never work right now - the shippers are holding all the cards. Once the tables have turned, and the bottom of the barrel carriers have gone out of business, the motor carriers will once again have the upper hand and be able to set the rules when it comes to rates. It's simply a matter of survival until that point. When it happens, then the broker will have no choice but to change the way he does business, or he will find it impossible to locate carriers to haul his freight.