I hate brokers
 

So, a couple of you probably remember my other posts when I asked advice about my business plan and such. Since then I've finished getting my authority, been doing different kinds of work. I thought I had it all figured out before I started and I planned on doing just intermodal. Long story short, didn't end up working out. The ports out here in NY/NJ are an absolute horror. I did power only for a little while, tried working for JB Hunt for a little while, so on. Now i've finally gotten a trailer of my own and i've been getting loads off of DAT and getloaded.com and so on. When I first started out it wasn't bad. You had to search a little for a decent rate and there was always the jokers who expect you to work for even less than a dollar a mile but I could still find work. But now... I just don't know what to do. I literally called at least 50-60 people today and of all the loads that weren't taken, the highest paying one came out at about 1.20 a mile. Thats flat rate, without FS. I feel like I'm stuck in the god damn twilight zone over here, like ALL of my work until now has been for naught. Who the hell are these people and how do they actually expect me and the rest of you to work for free? I'm racking my brains out, wondering if theres something I don't get, something I'm doing wrong, etc. Maybe theres these super truckers out there who get 20 MPG with a 45 thousand pound load so they can actually make money. Myself on the other hand gets about 7.5 MPG fully loaded and I just cannot do it.

I'm sure I'm not the first person to complain about this. Someone make sense of this for me.

you wont make anything staying in ny or nj. you are getting great fuel milage. a lot of people will say diffrent, but i love CHR. if you talk to them and ask where a good area is they'll tell you. they say they run you heavy and cheap.. i had a heavy load from them 2 weeks ago. that was the first heavy load (35k+) in a month and a half.

I hear you. I'm definitely not trying to stay in NY/NJ though. I'm apportioned for the entire country now and I'm looking for loads going anywhere. When I first started on the load boards it wasn't very hard to find a decent paying load. There was still the dollar a mile or less funny offers but it wasn't like I would make phone calls from 9 - 5 all day long and not get a single offer that was that much over a dollar a mile. Can someone explain that to me? Is it the freight to trucker ratio in the area? Do all of these brokers on various loadboards communicate with each other somewhere and decide at a basic set rate? I just don't understand. Would any of you take a load that only paid a dollar a mile, unless you were just trying to get home? And you really think I'm getting great fuel milage? I thought it should be a bit better. If I have something really heavy on, like 45 thousand, I would probably be getting about 6.7 per gallon but if I was around 35 like the loads you're talking about I would be better than 7.5. This stuff is making the deal I had at port Newark look like a cake walk.

what i'm noticing.. freight is DEAD in the north east.

I've never been to them, but Baltimore isn't that bad once you get the lay of the land. What;s wrong with NY/NJ?

What went wrong there?

DAT is as good as it gets. Sorry.

Been there.

We're just starting a new quarter. Rates will naturally be lower at the beginning of the quarter.

Park the truck until you get your rate.

This is a business like any other. If you open a restaurant, you can't expect people to beat down your door on day 1. It will take a couple of years for you to establish yourself as a trusted carrier and to get on brokers' call list. I don't know anything about dry van except they are a dime a dozen. My advice is to stick it out until the Christmas rush is over then in the spring, try to separate yourself from the pack....look into Canada, step decks, double drops...something like that.

On the bright side....Christmas is coming.

Why do you hate brokers? That's the truckers who haul that cheap stuff you should hate. Would you personally pay more, if you can do it for less? I didn't think so. BTW. You got a great fuel mileage! Is it at the pump, or comp?

I’m not trying to be mean or rude, but you obviously don’t understand a supply vs demand, free market. That’s okay, most of the others who went out and got their own authority the last four years don’t either.

The first component in the equation to be blamed when rates are crappy is the brokers. Very few people are willing to pay more than necessary to get a job done these days. There are way too many trucks on the road competing for the small amount of loads that are out there. When a load posts in a tough area like the east coast, there might be dozens of carriers calling on it. Think of it as a reverse auction, where the price, or rate in our example is bid DOWN by competing carriers.

Let me ask you this… do you intentionally pay more for diesel than you have to? Would you pay $4 a gallon at one place if a place on the next corner was selling that same diesel for $3? Of course you wouldn't. So why then would a broker pay you $1.50 a mile to pull a load that he knows he can get moved for $1 a mile? Times are really tough right now. The rates will continue to go down until enough trucks are parked and then they (rates) will stabilize. This is what is known as a state of equilibrium. Eventually we will move into a period of economic recovery and the rates may very well double, or even triple in some cases. These slow times are great for weeding many of the folks who had no business getting their authority in the first. It is simply economic survival of the fittest. If you can't run for the going rates or find a way to increase your revenue, then park your truck until the rates rise to the level you require. If you can't afford to do that, then give up your authority and lease on somewhere, or give up everything and go be a company driver... there's no shame in working for somebody else.

Rates and freight are down pretty much all over the country. Part of the reason is the time of year. Another is the general state of the economy and the election. Depending on the outcome of the election we should see things get better or worse. Vans should begin to do better up until around Christmas. If you want better rates you need to get out of the NJ/NY area. Rates are generally down in those areas. You mentioned using the loadboards to look for loads, but do you also post your truck so that brokers and/or shippers can find you? How are your negotiating skills? It pays to develop personal relationships in this business. Once a broker or shipper sees how you run and take care of business, you should start to get more calls. It does take time to build your business. And as someone else suggested, if things get too rough, you can always give up your authority and lease to another carrier. I know some who do better leasing to a carrier than they did running under their own authority. You don't always need to run your authority to do well. Most of the major carriers have direct shippers with fixed contract rates that can help owner operators have a stable year around freight base.

Only two reasons anyone would ever do that:

1. There is no other carrier available that is trusted to pick up and deliver on time, safely and without damage to the freight, or
2. The carrier has provided good service in the past at a reasonable rate and it's easier for someone to make one call than it to shop around trying to save a few pennies.

Either way, the carrier IMO needs to move toward time sensitive and/or high value freight. Who really cares if their 20 bags of cheese flavored Dorito's is late? Nobody that's who. But if a $250,000 peice of equipment doesn't arrive in time for the crane appointment on that multi million dollar construction project.........well let's just say your freight rate is insignificant.

This is small carrier's ace in the hole and the small carrier must protect that card at all costs. If they lose that reputation for 110% satisfaction, there are dead.

I’m one hundred percent with you, as I often am. This is why my first trailer was a reefer (a little more specialized than a box) and my second trailer was a 53’ step-deck (much more specialized).

I didn't see where Tristan specified what type of trailer he (or she… it’s a unisex name) is pulling, but my guess is it’s a box. Pulling a box takes absolutely no special skill or training or physical work so it pays less. When you are doing something that anybody can do, the job won’t pay as much as if you are doing something only a handful of people can or are willing to do. It goes back to the supply and demand issue I covered in my last post. Box drivers are in very high supply, so the service they offer is worth less to somebody looking for that service. If you are pulling a four axle RGN, you are doing something that far fewer people are qualified or willing to do, so the job is worth more.

Of course I'm not saying ALL brokers are bad. However, this is what makes me angry. A lot of these people are just sitting around in their living rooms doing absolutely nothing and keeping 50% of the money I MAKE FOR THEM in many circumstances. If these people are offering under a dollar a mile for a load they were paying over 2 dollars a mile for a little over a week ago you can't tell me that they're actually charging the shipper less. And then the other day one of them actually had the nerve to say to me "Hey, you truckers make a hell of a lot of dough. You can share the wealth". EXCUSE ME? I can share the wealth? You mean the wealth that I earn by putting everything on the line and basically dedicating my entire life to this business while you sit in your living room all day and fart around on the phone? No matter what way you cut it or what your opinion is of brokers, I don't think theres any possible way that you don't agree with me when I say that aint right.

You're right, I don't have a college quality amount of knowledge when it comes to business and the market and supply versus demand and so on. I came into this with the knowledge I already had from personal experience. However, I would imagine that the cost of freight would be HIGHER right now when taking supply vs. demand into consideration. It's quickly becoming the christmas season and naturally because of that theres much more freight than usual. So why wouldn't the cost of freight be higher instead of lower?

I see your point, that is something I've considered. Where can I find freight that would pay better or be time sensitive or high value? I've been on a few load boards, truckersedge, getloaded, 123loadboard, etc. Everything on there seems pretty basic and in the direction of flats and vans. Is there any kind of website that covers the type of freight you've mentioned?

Let someone with good negotiating skills do the hard work for you. I have been using him for over 2 years and rarely get a load under $1.85 for a dry van.

Welcome to SummersAgency.com!

You don't have to. It's just a common sense! If you think you could do better, just do it! If you can't...sorry life is not fair. Nobody owns you anything, and if you thing otherwise, you are in a wrong place to be.

You don’t need college level education in macroeconomics to understand that the more common something is, the less it’s worth. The East Coast has a dense population that requires a lot of goods to support, but in comparison to what they consume, the populace produces very little. The result is that inbound rates are high because trucks are in high demand to move all that freight into the area. The problem is that once all those trucks deliver their freight, there are very few loads for that large number of trucks to haul. As trucks compete for loads, the price is driven down until it is so low that many would rather deadhead instead of pull the loads. It is at that point that price equilibrium is reached. Often that price is a dollar a mile or even less for van freight, no matter what the economy is doing.

Yes, we’re moving into the holiday season, but the economy is stalled, and (my opinion) everybody with money is holding his breath to see what kind or president we’re going to have for the next four years. Even Obama himself claims that corporations have about two trillion in cash reserves, more than ever before in history. (PolitiFact | Obama says companies have nearly $2 trillion sitting on their balance sheets) It’s estimated that there is between one to three trillion dollars sitting on the sidelines (not invested) between business and private investors because the only thing certain about our economic future is that it is uncertain. Business owners don’t know whether or not they will have to deal with ObamaCare, higher tax rates (not only on earned income, but capital gains and inheritance tax) and a whole group of other penalties for financial success threatened by the current administration.

Liberals will claim the above paragraph is untrue, but it really is inarguable. They can say that Obama isn’t anti-business and anti-success, but the fact remains that even if they are correct, most investors think otherwise and, in the financial world perception is everything. I’m sure there are even some who are worried about what Romney will do to our country and economy, so they are probably holding back as well.

The sitting money has more to do with the financial meltdown. Many companies went bankrupt because their lines of credit were tapped out. Ford had the foresight to mortgage everything a few years before the crash happened. GM and Chrysler didn't. The reality is Fords financials were in just as bad of shape, but they were able to tap more credit.

Cash is king now.

All those loads are on DAT. I started with Internet Truck Stop, then tried Getloaded, then tried 3 different versions of Dat (Load Link, Dat 360 connect and now Truckers Edge). Truckers Edge is the best I've found for the money and it's all I use.....but mostly they call me now. More and more I seem to sit at home and when they do call it seems to be a last minute over sized SD or DD load. If I stay at home they know I'm always ready to load for them next day. Trucks are often falling off loads at the last minute and it puts everyone in a bind when the crane is already booked.

thanks. ill try to always remember this. now that i know life isnt fair i feel as if ive finally gained my first piece of basic common sense. im a changed man.

Somehow i feel sarcasm here....Well, good luck!

Haha. How could you tell? Actually things have been doing great since I posted this. Hurricane Sandy created some great rates. I was doing these pellet fuel loads that were only a little over 100 miles long for $1,000 a piece. Grossed 5k in just a few days. Now that the storm is over and everything is almost cleaned up those rates are gone but they're not anywhere near bad as they were when I posted this. I think in a couple weeks I'll be able to get away from these loadboards anyway. A friend of mine who owns a small fleet called me saying he needs another truck to pull out of a cardboard factory. He says his guys are grossing 4-5k weekly and the shipper gives all the drivers an Ezpass and covers tolls entirely. He also says they're not spending that much on fuel either being that all the places theyre pulling to are typically low traffic and don't have many hills. Home every night too. Does that sound like a good set up to you guys? I look at it like this. On one hand, if I was doing loads out of this place since the beginning, I would have made WAY more money by now. On the other hand, in the future there will be weeks here and there when I would have made more money just doing my own thing and going on the loadboards and such. But I think in the long run I'll probably make out much better and I'll have a lot less stress without having to worry about the rates of various lanes and not knowing how much money ill make week to week.

That's how it works and that's what I was trying to explain above. It takes time to make contacts and build any business. In the meantime do what you need to survive, but don't undervalue your service. If you need to take some cheap loads to make ends meet, try if you can to take those cheap loads from different brokers that the ones that paid you the good rates.....the idea is to "train" the brokers that paid you well to continue to pay you well.

Don't waste cash because that is the resource you need to sit at home while you turn down low paying loads and remain available on short notice for higher paying hot loads.

Some rules that I live by:

1. Keep costs low in order able to sit at home at wait for your rate. Miles do not equal profit.
1. You don't want to compete on price. You need what you need to make a profit. The caveat here is that you can negotiate your price down a little to show flexibility and good faith and to show that you want to help them out of a bind, but any price lowering should be built into your original bid.
1. Your advantage over the bigger carriers is dependability and availability. Always be able to load next day in the northeast, you will get on brokers' call lists.
1. Think of yourself as a relief pitcher. You don't have to work alot, but when they need you they need you.

Good luck

I might be able to help you out. Where do you run. What kind of trailer