I thought you were pulling containers, must be mistaken. Are you running off the boards?

It is easy to make a profit when you have virtually no overhead as compared to owners of trucks. All a broker needs is a computer, fax and telephone. He can buy everything he needs to go into business for less than $1,000. That won't even be enough for a down payment on a truck. Many owners have been scrambling for freight and will haul anything that they can put on the truck no matter what the rate.

You forgot about contingent cargo,general liability,up-front money for the carrier,quick pay long before you are paid,getting the customers,claims that the carrier can't pay and much more.
Oh i forgot that as soon as you have the authority customers beat down your doors. If it is so easy to get customer's why do you use brokers?

The broker can factor his paper just as the carrier can, and many do. The contingent cargo and other insurance the broker may carrier is still no where near the cost of what the truck has to pay. Many brokers use factors to pay for their "quick pay" programs. There are costs associated with any business. The carrier must pay for cargo, liability, fuel, breakdowns, drivers, etc., etc., It is difficult to feel sorry for brokers knowing what some of them are taking off the top. What the broker pays in operating costs is a fraction of what a carrier must pay to stay in business. And when a driver leaves your truck half way across the country the carrier must pay someone to go get it. Brokers have minimal expense and operate with higher profit margins than most carriers. I spoke with one carrier the other day who spends $1,000 per month in insurance. That isn't including equipment payments of over $3,000 per month. I never said that it was easy getting customers. It is complicated by brokers and third party logistics companies who are beating down prices. If it were only carriers whom we were competing prices would likely be higher than when brokers are involved. After all, they make their percentage no matter what the load moves for. A broker can make money when a load moves for $0.50/mile. Any carrier who would haul for that rate is losing money.

I'm going to go out on a limb here and assume you have the only tools needed(phone,fax and computer) to get customers the same as a broker. If so why do you continue to use brokers? You just make a phone call and you have a new customer.
A broker factoring is just as ignorant as a carrier that factors. Borrow the same money over and over again.
Even if the broker factors they have to come up with the operating money for the carriers before they factor the load. Hard to factor a load that hasn't delivered yet.
I guess every other business is far easier than owning a truck.

s.


I don't have a problem using brokers. As long as I get the rate that I want I don't really care who pays me. There are pros and cons to both. I never said that I only use brokers. It does take time to get most direct shippers. It is difficult for anyone who drives their own truck to get out and knock on doors with direct shippers. Most carriers use brokers. Some of the largest carriers in this country use brokers for at least some of their freight. I don't know of anyone who only uses their own direct shippers. It isn't necessarily difficult to get your own shippers, but does take time. You may make dozens of calls before you find a good shipper. And if you think that all brokers finance their own paper you need to check around. CH Robinson uses US Bank. This is one of the largest factoring banks in the nation. It is also the same bank used by the U.S. government. There is nothing wrong with factoring your paper. Some of the largest corporations in the world use factors. It is a good way to finance your business without debt. As long as you are making money it really doesn't make any difference whether you finance your own paper or not, although it is more profitable if you can handle your own receivables. On the other hand, you can grow your business much easier when you factor unless you have a boat load of money starting out. And for the record, I don't necessarily think that trucking is the most difficult business, but it is one of the most challenging. It is very capital intensive and has low profit margins. Many people get into business thinking that they are going to make a killing. Often times they under estimate the costs and over estimate their profits. I understand that there are drawbacks and challenges to brokering. Trucks disappear after taking a load or simply don't show up. I am not anti broker. I think that brokers can serve a useful purpose in this business. Brokers can be helpful for those who don't have the inclination or desire to get out and knock on doors. But most of the liability falls on the shoulders of the carrier.

Pretty big difference in cost between factoring and LOC on receivables. Maybe you should not use the generic term factoring when it doesn't apply to what you're talking about.

As long as you get the rate you want why do you concern yourself with someone else's operating cost? Why complain about it?

As you said it takes many calls to get a customer,is there no cost involved in that? Maybe you should hire someone to do that for you. You expect to be paid for your work the same as anyone else.

So why would anyone expect rates to go up when the loads are being moved "no matter what the rate"?

:smokin:

For the most part I don't worry about what someone else makes. You either make sales calls yourself, hire a salesman or use a broker. There is a cost involved in making sales costs. It is often more a cost of labor rather than out of pocket expenses. The real costs to the broker is minimal compared to the owner of a truck. The owner of the truck can spend thousands of dollars before he makes a nickel. As I believe that I stated earlier, I don't have a problem using brokers as long as I can get my price for the freight I haul. There are those who think that a broker should not make any money. I think it would be good if brokers operated like realtors with a fixed percentage for the entire industry. If nothing else, it would take some of the fire out of the detractors of brokers.

There will always be those who place a low value on their services.