What would happen if the amount paid by the shipper was required on the BOL and the shipper had to be given a copy of the carrier's invoice?

Pros and cons?

 

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.

Let me ask you this,...do you think it would help the situation at all if the brokers were limited to 10%?

 

Thats a good question no_worries, can I put this with my last question? ,

Do you think it would help in any way at all if the brokers were limited to 10%?


Dog gone for now,....must,......sleep,....dream,......happy,,,, ,,,thoughts ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ ZZZ

 

I'm about to go out, but I can muster up a quick answer for a change :lol:

I think that if the transaction was completely transparent, there would be no need to place a cap on the broker commission. The shipper would know what's in their budget and would know approximately what various carriers charge. They would then negotiate a broker commission based on the value of the broker's services to them. A broker that takes a faxed sheet of loads, posts them on a board, and hands them off to the cheapest carrier would garner far less than the broker that works hands-on with the shipper to arrange specialized shipping arrangements. The same holds true for the carrier. Some brokers would probably get more than 10% if all parties felt they were getting appropriate value. Many would get far less.

BTW, some of you talk about real estate brokers as if they have a cap on commissions. Maybe in FL it's different, but in the states I'm familiar with, there's no such regulation, just industry accepted standards.

 

There seems to be alot of misunderstanding here on the subject of broker bonds.

Some of you are going to find this hard to believe, but the broker bond requirement was created to protect the interests of SHIPPERS. It's purpose is not to pay off carriers when the broker goes bankrupt.

It provides a streamlined method for settling disputes over minor cargo claims, accessorial charges, etc. involving individual loads and individual carriers and within that context, it is still effective. Shippers have the same filing rights as carriers do.

When the first wave of deregulation was passed in 1980, shippers (and Congress alike) did not want a repeat of what had occured earlier in the century.

In the 1920's, freight intermedairies ( and quite a few small carriers) had become so untrustworthy and undependable that it was having a major impact on the free flow of commerce. Shippers did not know who to trust, and what they would be charged from day to day. This was a major force behind the push towards more stringent regulation and when motor carriers were, in fact, regulated in 1935, it put virtually every independent broker out of business overnight. Problem solved.

My solution- ELIMINATE the broker bond as it applies to unpaid freight charges, and update the Regs under title 49 so they reflect the way trucking does business in 2007. Put some teeth behind a broker's fiduiary responsibilities.

 

Transparency on the bill of lading would force brokers to compete with one another on the commission they charge. The real estate business has had a standard self imposed commission structure for many years. In some cases, the realtor may even reduce their commission for a more expensive home to get the business. I think the transparency of the rate could have the same effect with freight. I don't think that we need to impose a flat rate commission rate through an additional government regulation, but by having all the numbers down for all to see, the broker would either need to compete with what other brokers charge, or go out of business. It could help to clean up the industry.

One other thing that I would like to see made available on the bill of lading is to separate the fuel surcharge from the rate. Legislation died not long ago which would have forced the broker to pass 100% of the fsc along to whomever purchased the fuel. The problem with the bill was that there wasn't any teeth in the legislation. By forcing the shipper and/or broker to separate out the fsc, the carrier could decide if he was getting all of the fsc. It would also let the shipper know if the broker was pocketing part of all of the fuel surcharge. The only legislation I can see which might be of value would be to force brokers and/or shippers to pay 100% of the fsc along to the person who buys the fuel. It will not be effective unless there are some teeth in the bill. Steep fines and possible jail time would encourage those who are not honest to straighten up their act.

I think the transparency aspect would solve most of these issues without a lot of additional regulatory interference. If the carrier and/or owner operator could see the fsc on the bills, he could quickly see if the fsc was being passed along. It would not take long for word to get around about the dishonest brokers.

 

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.

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.

 

GMAN that is what I want to see for the O/O and those running on their own is what did that load pay TOTAL before the broker took his cut because if a load pays 3 bucks a mile and a FSC before the broker takes their cut and afterwards all that is left is a buck a mile and no FSC guess what that Broker is NOT going to be getting to many calls very fast why their rating is going to be gettin g hammered on every Message board and Load board their is saying takes 70% for themsevles and will not come higher. Then that shipper is going to be asking why can you not cover your loads to that broker. Transparancy would eliminate those brokers bending over the O/O and companies big time very quickly. Landstarve Rev takes 27% off the top and for what the right to use the name and a few other benefits not worth it at all IMO.

 

I don't see where this follows. Independents are not solely reliant on brokers, just as shippers aren't. Both use them as a matter of convenience and because, up to a certain point, they're worth the price. We happen to be in a period of overcapacity now, but the long-term outlook for the industry is just the opposite. The large carriers won't be able to fill that capacity themselves, and will be just as inept at servicing some of the niches filled by the small guys today.

 

Dispatch, that's interesting about the bond originally being for the purpose of settling cargo claims (I tried to read you link, but it didn't work :lol: ). As far as updating the regs to reflect how the industry now operates, that's exactly what I'm talking about. We don't need over-regulation, but the regulations we do have need to be relevant...currently, they're just not.