Question:
From what information I could find, brokers commission is usually 10% or less of freight brokered. Also payment to carriers should be made within 5 days after receipt of all required billing paperwork. Would this be a true representation of an honest opertaion? Or should the payments be made sooner if possible?

Answer:

Ha Ha - - you are kidding aren't you???? You're lucky if you get paid in 30 days from a reputable broker. A broker's commission is what's left after getting the load hauled by the CHEAPEST carrier. They will let carriers bid against each other, lie on the rates, tell you the load cancelled when they really got somebody else to haul it for $20 or so less than you agreed to, and on and on and on.
Collecting from some brokers is another story. I'm sure there are those here with some real stories.
HJ
Has dealt with over 500 brokers!!!

Answer:

No I'm not kidding, what I've learned from this site is that a good honest broker operation starts out with at least 3 to 4 months cash reserve to pay the carriers upon proof of delivery. I honestly don't think they should have to wait 30 days to be paid. If there is a problem with collection from a shipper then that is the problem of the broker not the carrier. Out of 500 brokers you can honestly tell me Honestt John not one has paid within 5 or even 10 days?

Answer:

I have heard and read that some take 45 days and some don't even want to pay.
You have to trust those with whom you work with, ie. brokers. Yes it would be nice if brokers paid 5-10 days after receipt of bills but that is not the way it works.
You as the driver will have to wait until they get good and ready to pay, and hope they don't have some airhead in their accounting dept. to mess up the calculations.
Kathy (Alkat)

Answer:

Mr O,
I can count on ONE HAND, the number of brokers (out of 500) that have paid us within 7 days!!! Same with direct shippers.
You also must remember that when they say 30 days, that means 30 days from the time they say they RECEIVE the proper paperwork. The time the driver takes to get it to you plus your invoice time plus mail time to the broker doesn't count. Oh yeah, the mail time back to you with a check is extra, too.
Most of these new brokers start on a shoe string, and wait to get paid by the customer, take their expenses out, and then pay the carrier.
This $10,000 bond is a joke, too. A hustler can book up to $20,000 worth of freight a day. Now, how much in reserve did you say they should have?
There are a lot of slime buckets out there just waiting to take you. All you have to offer is service; and once that service is rendered you are at the mercy of those who hired you. Choose who you pull for wisely.
HJ
Always keeps looking over his shoulder!!!!

Answer:

Now, how much in reserve did you say they should have?
I though that 3 to 4 months cash reserve(30 to 50,000 I guess) was the rule of thumb. To cut down on mail time overnite paperwork back to broker on their account.I think there are many ways to cut the mail time between payment & shippers. My opinion of course.

Answer:

Big O,
Do some math here. If a broker does, say 10,000 a day, how much would he do in 3 months. Now, if he has some staff and they book even 1/2 of what he does, add that to the pie.
That measley 30-50K doesn't go very far, does it?
Now, also remember that most shippers don't pay in the required 15 days. GM is somewhere in the 120 day range, Ford is 90 days plus, etc etc.
And what makes you think a broker will pay to overnite the paperwork to them?
Now, some brokers (and shippers) offer a "quick pay" system.......for a fee, of course. Anywhere from 2 to 10% to get what's coming to you early.
You better learn the difference between theory and real world.
Just how much experience in this business do you actually have, anyway???
HJ
Me thinks there's a rookie out there!!!

Answer:

I have no experience in this industry, the only knowledge I have gained is from you and others on this board, I read it every evening. I like your honesty no matter. I have asked questions and gotten answers. I am very interest in the broker operation side of things.I've purchased information from CIE, and know a couple who has a caring operation who have been in my corner. You are correct I am less than a rookie. However, I think I can do a good job as a broker

Answer:

Brokerage is like Accounting. There's the way it should be done, the way to make it look like it was done the way it should be, and finally--the way it is actually done. Big difference in all three!!!!!
I know you're heart is in the right place, but you aren't any where near ready to start out on your own, unless you got a lot of money laying around doing nothing but waiting to exit your possession. It's a dirty dirty cut-throat business.
HJ
Married to an accountant - have to explain real life quite frequently!!!!

Answer:

You are correct in what you say, That is why I will go to work for my friends to get my feet wet. I will work as an agent for them. I have a few contacts in the shipping world that will help me as well. So I'll see what gives, while I continue compling data for my own someday In the future. Rookie out!

Answer:

My husband and a partner are agents for a broker who just started out. They have $50,000 up front cash and a line of credit for $100,000 additional. They plan to pay the carriers upon receipt of proper paperwork. There are honest / reliable brokers out there. They know that they can take all the loads they want, but they don't get paid if they can't find a carrier. The loyal carriers they have from employment with a previous brokerage understood they were new with limited capital and agreed to be paid net 30 from receipt of paperwork / invoice for the first few months. They knew they could count on steady loads from some of my husbands customers. If the carrier is a big company they stick to the 30 days, if the carrier is a small line, they will pay upon receipt. As far as a percentage, they range from 7% to 34% with the average being 10%. The key to higher percentages is not taking from the car, but getting customers who realize you are performing a valuable service and pay so that both the broker and the car get a fair deal. Integrity and honesty are still alive, and do pay off in the long run.

Answer:

Thank you. I wish you well. I do not have my own authority, and one reason is because all I hear is " all brokers will screw you" Any brokers out there care to explain why this is such an everyday saying?

Answer:

Because this industry has become too easy to enter. Therefore, you have people coming and going all the time, some getting screwed, some doing the screwing. Some entering blindly, some with s few bits of knowledge, there are no standards.
In addition, there are no checks and balances in the system. If Tom Bad Guy starts a business today, goes out of business tomorrow owing lots of people dough, he/she can easily start up again the next day, down the street with a new name, and a new number.
There are far fewer regulations than once were, this is a good thing, but it allows for cheating in the sytem, so some people do. This upsets the apple cart and all others pay for it in the end.
I would love to see this a bit harder industry to enter for the carer and a MUCH harder industry to enter for the broker. Above it says the $10,000 bond is a joke, it is worse than a joke, it is practically non-existent in the big picture.
Also, a bit of rate regulation is in order. There should be some standard by which all freight moves. One of my clients made a comment to me the other day, he said that caring is the only industry to which a minimum wage does not apply. He is right in a way. Heck, even farmers have to follow the minimum wage laws. So, the nest time you hear of a guy hauling a load for $1.05/mile just think to yourself, how can he pay his bills?
Well, those are my two cents for the day. Good luck and keep the faith.
Mel