Brokers are the authorized entities, people or companies- who are the middlemen of the freight industry—-Let’s be frank—-Brokers are the middlemen in any industry—-they are the arbitrage traders-They may have the trucks, and need fast freight to keep going- brokers can get freight—–may need a shipment moved with a shipper—getting the shipper a truck—–
Good ol boys controlled the market that way- Brokers knew or had a shipper on the dole—on the hook; broker had long term contracts—good writing—solid terms- brokers would control the freight 10-20 years—-long term contract—–they were the gate keeper’s you had to go through them so they can take a cut of the who business leaving the small towns.
Just so happens their cousins nephew had a few trucks — Brokers kept the arrangement both sides happy and paying the middleman—-everyone made money. Thats the American way—–
The Broker– took a 10% off the shipper– the carrier paid the man 15%–first option to finance the new truck needs–to shipper and broker—–paying another 10% to them for the fleet money they borrowed —10% of course was the interest…..
Now the Carrier owner wants out–sell the business–Broker takes the wheel—after the phone call. Carrier is moving $50k per week gross- just through shipper- has another $35k per week backhaul, $85k gross per week—taking the Brokers cut of 15% off the top of Gross—If they keep the Broker and hire a new President- they can take a short term transfer slow down- make the fleet efficient and —earn the $35k on top of the brokers 25% cut he still takes………
Remember—-this is way back before computers—-This is how it worked, from the start…….negotiation to negotiation. Many times these Brokers were known to take a buy out early because they were almost forced to own the truck fleets and maintain them——
Shipper does that- buys the Carrier- Builds it stronger-Gets its investment back within 3 years- even with early buyout from Broker. Everyone is paid- because each one ment what they said- and did what they said…..
Brokers as seen from the prior—arranges the transportation or movement of cargo—between shipper and motor carrier. For purposes including but not limited to- manufacturing processing, storage, distribution, shipping, sale, refining—-The facilities are built for efficiency production and no longer cover —–sq miles for production–they are sq ft– and 2000 miles apart.
Brokering is the collection of known variables, statistics of known events, securing service needs of Carriers and Shippers, while connecting both to a single movement for profit and delivery of goods. They sell both sides- Shippers and Carriers.
Broker Agents are, as the name imply’s, Agents- the contractual agreement between parties to act on the “exclusive” right as agent to the contracting broker. They act on the behalf of the Broker. For this they are paid, typically commission, for each completed Sale that is paid. They are Acting as the Agent for the Broker… They are contracted to represent the Broker- or Brokerage – by completing shipments for customers-
How this works-
Contractual Agreement– just like any other- The Freight Broker- contracts with the Agent- Agreeing to represent the Brokerage, on their exclusive behalf–and While the brokerage is allowing them to bring customer base on from their current source. Typically the Agents and Brokerage will split all the Agents profits 60/40 seems to be the going rate. Brokerage gets 40% for the rights to use the Brokers Authority, and Contingency Cargo Policy (if they have one)–Brokerage now has 75,000 Cash bond- backing the Authority and business against losses—Carrier covers the first 100k in cargo losses, broker can protect against losses over the 100k minimum—with their contingency cargo- protecting the cargo loss for net 350k in value declared. Each Shipment—-Agent moves customer base to new brokerage- who gets all rights to customers as well–also gets truck list from agent- The truck used to move the freight–have to be approved by brokerage anyway–New insurance notifications placed for additional insured notification.
Now until someone stops the contract—the brokerage is locked in for all the profits of the shipments- Agent takes the losses, immediate increase to broker, with no limiting privileges. The brokerage contracts with Another group of agents, while growing-
Each one producing their 75,000 worth of freight commissions- covers their position risk.
The main thing that these guys want to do is make more than 10% profit margin. 10% will produce 5% pre-net on factored freight bills. Anything over the 25% mark and its solid—-however, these guys turn money–the more volume- the more money earned. 5% of 1 Million net—–still 50k before the agent pays their staff of 10k per week-and 40k for the office phones location—get the number higher and it just moves up faster.
Solid 10 people on these agency lines- pumping out 200 calls per day–maybe 300 per day each—is a fast builder if they know what they are doing and are properly backed. Booking loads and trucks- Truck needs a load for 10% of gross outbound from Nashville- 3 outbound utah and NE deadheading out to get another Watermelon load –cause you know the farmer- and the buyer —plus buyer says your watermelons are better than the other one that lost the contract with the farmer. I cannot help he was not paying his guys- I will declare I had nothing to do with his business closing—-NOTHING.
Go in and Buy the produce from the farmer- Give him cash money- Pay his team- their salaries, and pay the light bill at the office—-see how much money you can make…….He instructs the team to say they sold out and that the new produce will be ready in 7 days- while the other half are hitting the customers with preorders cause you and a few guys locked the market in by buying the sale side for the producers in area. I do not like watermelons—ate too many growing up out the field. When I found out my buyer in a town-bought watermelons—and paid stupid rates to deliver them–I paid attention—-$5 watermelons are bought for 50cents a melon on the farm- They ship them out to the buyer at around 44k lbs in cargo weight–average melon is 10lbs give or take—- Those $5 per melons–go quick— Had a guy order some from me cause he knew if he wanted those melons he was gonna pay me per melon- Cause I had pre-bought 4-5 truck loads for my trucks to run them north–So When I sold my melons- the farmer and I got our guarantee- plus he took some extra off the per melon sale price after transport cost were ran. $1200 shipping will get you a good ways.
I do not mind showing the money- being the opportunity seeker to guide you to find your way. Profit margin—small deals 10-15% –million dollar contracts get less but benefit from volume. Exclusives—shit and I get guarantee on the factoring rights, freight, and trucks–Insurance admin so he dont do shit but collect his check- boss only wanting his guys moving- and him in and out when he is ready—bill cut for my percentage—and his guarantees –nonrecourse—-Yes please!! give me 5 guys in a office with a following of 10 trucks each and I will show you how they build a Large Carrier conglomerate—that ends up merging and getting paid—-
Like I told my Ol’ buddy Joe–from UP-Michigan—Who called me and I had my hands full on a project, My bad Joe–I need this rate, I do not give a fuck if they want to pay it—Expedited Baby–Give me 1000 and I will do it over night—–collect by afternoon! Damn Joe—-I wanted to see how many more trucks–5 more? Told you they were gonna enforce it—had to slow that michigan rubber melted down southern Alabama….
Trucks Move Freight, Not Quotes!
Call me for a quote- I will tell you with a quickness—don’t waste my time—-get me someone who needs a truck–quote this—these contract guys dont mind quoting cause they lie to everyone that works for them, about what they actual get for the service they provide—-30% off the top JB Hunt makes on the brokerage arm—-Still paying $2.10 a mile-to the Carrier—Shit me——I heard the salesman tell one guy on the phone–1.75 cause he aint been moving for them for a week—then come tell me $2.10 cause I knew what they made-on just the freight of contract—not the load count guarantee either, we were in the same office when I called their bluff—no the load location during transit times. They been upcharging for the Qualcomm since it started —–
Trucks move the freight people…You want a quote—I only quote guaranteed trucks ready to move. Why this works for me—I don’t know—-Its from years of sitting in the seat talking no two cellphones- booking trucks for people who demanded I give my freight without a commission—–just cause I work for them: when I knew another carrier would take my load and pay me 8%—From me learning to book myself with the loads before dispatch gave me some bullshit with less pay—-cause I was not nor am I bashful about being higher priced. You want cheap and I don’t want the bullshit of someone willing to haul your shit for $1 a mile—luck sucks sometimes……..let us have at least one night of peace and issue free…….You can call everyone else—worry about them and stick this one in the office draw until i call you at noon for my next truck at the same higher rate!!
There is only one person who I freely give—I take that back–two people I freely give freight to ………..One is a ol road hard tow truck driver I know- the other is just say a high ranker at a large fleet. Yes, I freely send to them- They have always had honorable keepings with our agreements. I never said, I was easy to get along.
I am quick on it—-seen it too much my first 3 months on the phone at 250 calls per day average………before I finally closed a sale—and have done that more than 2 times. Rebuilding the networks of customers, and knowledge just off the information I knew from my head and my knowledge—-later through continuous learning from other people letting me pay my way to train with them………
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The key to the brokerage- and their earnings are more volume, less stress, with clear understanding- they are the brokerage of trucks and freight, however whoever pays the bills, is the customer—-if they can lock in trucks on a dedicated route they can control a market—–good trucks are hard to find, but the ones you do find you keep them moving—they in turn earn you your money—cause the shipper will look for you everytime—–
Brokers typically are getting paid to be the match maker——and through contractual growth of their agents working the phones and network—booking freight movements- all modes any type—Broker becomes the Brokerage- Still the same 75k cash bond- originally filed, on the growth of volume—taking 20% on both sides-10-10- even—The broker moving $100k per week per agent ($5k average per truck)—–volume—-still earns on a 10 agent Brokerage—$200k on a million- split on the agents- and broker——not including detention time that is charged over the rate of the carrier mandate—-and other incidentals not on the list of charges the brokers can and do charge for.
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Want to Learn How to be a broker or broker agent from the Pro’s? Ever want to earn additional income with the trucking industry but not sure how? Click here to learn from a leading broker the in’s, out’s, and secrets to one of the oldest professions in the industry TODAY!by