Question:
I'm sure that we have all heard horror stories about how a load starts at $3 per mile and ends up at $1.10 by the time it gets to the car. Obviously this is a pretty big injustice to the people who actually do the work. I have a solution, and I'd like a little feedback on it.
Any given load MUST pay the company or individual who is purchasing the fuel at least 90% of the total revenue that is paid in any connection to the movement of said load.
In my opinion, this will eliminate pencil pushers and slave labor companies from taking the lion's share of any load.
They can still double and triple broker the load but, they would have to split the remaining 10% between them.
The best example that I can think of for this is real estate agents. If you agree to pay them 7% to sell your house, you don't pay EACH agent 7%, you pay one and they have to split it.
Seems like this would take care of the unscrupulous brokers AND make them have a vested interest in a higher paying load.

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The brokers would simply charge the shippers more, to offset the lost revenue from only being able to charge 10%, and the shippers would raise the price of goods, and the consumers would stop buying the goods, and then there wouldn't be anything to ship in the first place. The brokers would get their cut, one way or another, just as the caring companies charge a "fuel surcharge" instead of raising the rates.
Didn't they stop this kind of thing with deregulation?

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Holy doom and gloom...
...and the then nobody would have anything to buy and the United States would degrade into a third world country and no one would be afraid of us and we'd get nuked and the world would go black and mankind would cease to exsist all because brokers would get a FAIR share...
You can't actually believe this, can you? Part of the problem with this industry is that we are our own worst enemies. So what's the answer? We should all just continue to be screwed out of the revenue so that your mythical economy survives?

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I wouldn't go THAT far. What will happen is the shipper will pack up their business, take it overseas to reduce their costs, and then you can complain about that.


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I believe it as much as I believe that there will be some schmoe who will take that $1.10 load, and think he's got a good rate.


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I wasn't aware that capitalism, and supply and demand, were "mythical economies".
But hey - if you want the guberment to tell you how much you can make on a load, more power to you. If everyone refuses to haul that load that Mr. Broker cut down from $3.00 to $1.10, then he wouldn't be a broker long. But that ain't gonna happen, so your best bet is to just refuse his load, and find something else to haul.
Or get out of the biz altogether.

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The carer that took it for $1.10 should be the one that should be shot and is the problem in the industry, but the good news he/she will not be in the industry long, the bad news is there are 3 more like him/her ready to take his/her place as soon as the loan paperwork at Freightliner goes through!

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Dice pretty much hit the nail on the head. There is no such thing as a Backhaul. That car costs the same to haul out as it does back. Too many carriers/O/O's are justifying taking a cheap load just to cover fuel costs. It's the "I got mine, sucks to be you" mentality. Right up until they realize they "don't got." In the mean time they are the rate cutters (along with the 4-5+ brokers with their fingers in the pie offering that $1.10 reat).


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THAT is the problem. A workable solution which can be implemented and cost effectively enforced. Those within the industry wishing to weed out those who practice business in the manner described do not have the authority to do so. How do we go about getting those that do have the authority to take any action?

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Oh, believe me, I don't want the government telling me how much money I can make. Supply and demand will continue to exist without the input of brokers. The mythical economy that I am referring to is the one you mentiones where everything hinges on what brokers do. I am saying that brokers only matter because WE let it matter.
Costs to shippers would actually go DOWN. If they didn't have to pay the huge slice of the pie that brokers receive, they could actually get their rates subjected to the law of supply and demand instead of greed.
The function of a broker in reference to the caring industry is to connect shippers with carriers. In my opinion, that function could easily be handled by that wonderful invention that we all love so much, called the internet.
Imagine a direct connection between the shipper and carrier with no middleman or one that only gets 10%.

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Oh yeah, I don't think that this is the ultimate solution to low rates. But with this line of thinking, we could eliminate one of our problems. We would still have to educate the $1.10/mi crowd, but we wouldn't be fighting as much of a multi-front battle.

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There is no economy where everything hinges on the brokers - but in your original scenario, you still included the brokers in the equation, and trust me, if you limited them to 10%, they would raise the rates to the point that they would still make theirs.


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So what is stopping you from going directly to the shippers NOW? There's no rule that says you HAVE to go through a broker.


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And the internet-based brokers are charging that same $3.00, and paying that same $1.10. If you aren't dealing with the shipper directly, there will always be someone who will attempt to take as big a piece of the pie as possible. Whoever is running that internet website that you think will solve all the problems will take as big of a cut as they can - maybe not at first, but once you are hooked on them, or the shippers are comfortable with them, their cut of the pie will get bigger and bigger.


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No middleman? That can be done now, without government intervention. 10%? That would take regulation, and frankly, wouldn't work; which brings us full circle back to your first post.

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Unless you lease to someone like Jones, the "agent" gets 8% of 96.5% ... Jones keeps 3.5% for Insurance ...
=I= get 74.3% of the 96% ..............
And I get 100% of the fuel surcharge ....

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Actually, I don't have a huge problem with the rates that I get because the company that I will be leasing with deals directly with shippers.
I don't take freight that pays low. I know quite a lot of drivers who don't take low paying loads. I also know that no middleman is possible. The problem is that 90% of O/Os don't. And every time that someone gets a large percentage of their revenue skimmed by a broker, it puts the rest of us in danger. It means that an unethical broker is in competition for the freight that I (and you) haul.
Why is a bit of regulation bad? In case you haven't noticed, we are regulated now. Just look in your wallet for your health card or on your CDL for your hazmat endorsement for some examples. We don't (edited) about those ones nearly as much as we do about cheap rates yet we are not willing to accept any regulation that will help in the matter?
There are some huge factors in the way that rates are set. One of these factors is that we let someone who's biggest strain is to lift a telephone skim off of our labor. One other is that a large portion of us are willing to let them do it by hauling their (now) crap loads. We are probably never going to get everyone to "say no to cheap freight", but we can damn sure cut out the other problem.

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I disagree. These brokers are usually taking the "bottom of the barrel" loads, from shippers who could care less. They certainly aren't competing with me.


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The HHG industry IS regulated. The government sets the rates, and the carriers have to quote those set rates. What then happens is that the carrier comes in and discounts the heck out of the load. This has resulted in 60%-70% discounts, in some cases. When the carriers can't compete on the rate, they compete on the discount - it all ends up the same in the end. Partial regulation of the rates does not work.


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You forget about all the liability the broker has with the shipper, and the resources it takes to obtain the loads in the first place. If all a broker does is "pick up a phone", then why would anyone use a broker?