Brokering freight, is done by two different types of brokers. They essentially act on their own behalf, by providing service to the customer shipping or receiving the cargo. When they book the load with the Transporting Carrier, they typically, add a fee, deduct a percentage, or a combination–from both sides of the transaction.
These guys are freight brokers, they act on behalf of the customer, shipping in the name of the Cosignee and Cosigner of the Bill of Laden—They do not take anything under their name as ownership, by being listed as parties to the WayBill……
Most brokers make in the 15%- to as high as 65% on each load delivered. This is why most Carriers, eventually become Carrier Brokers. The potential profit, which is typically split in various percentages of profits, on just one agent working for the brokerage at $50k gross per month should see in the $6850 minimum split between the brokerage and the agent. Just one—-and that is only $50k per month
Now this guy is a bit different. They can actually take possession of the cargo in their name. Typically, you find these guys working as NVOCC’s and Air Freight—however, these guys are a multiple revenue stream licensee, that capitalizes on potential services to the customers they serve. Based on what I have experienced over the years, I would be more inclined to choose the “FF” designation instead of the Brokerage. Giving the Carrier a better way to be operated and allowing additional profit potential just by providing a “blind service” , and providing a larger allowable control spectrum, via warehousing—ect.
These guys both broker or “middlemen” the transaction. They sell both sides, the trucks or carriers moving the load, and the Shippers or Receivers of the cargo. This causes these guys to push to get the freight moved, expeditiously. The fast they book a fresh load the more likely they profit…..CHRobinson has a call center set up, and very well the largest of brokers. One team gets the loads, while the carrier side books the loads available—
This Call Center style of operation is best for this type of authority. However, with technology being in place–and moving full steam ahead—-we may see a better technology for the operandi of the transportation industry. My decision is still open……depending on the new technology brokerages standards they start or try to impose upon the industry………..
These authorities are not typically limited in scope of operation—-they actually can operate in every sector of logistics by booking any load. So at 1030 am broker may get a call from shipper needing 50 cars picked and scheduled across the country—then may book a reefer going to NW, with a CAT 330 shipping to Houston Port for export……….meanwhile in transit stuff will get updates and reports through scheduled call ins.
These guys typically make 200-300 calls per day when they start—working 20 plus loads per day—to book 2/3…..some guys are beast on the phone–while others have a contact or a annual contract for say 50 loads per week…..for just one customer. Guarantees are the way to go when you push for contracts to shippers. Guarantees mean they pay for a minimum freight load weekly, monthly, annually—whatever terms the two parties come to agree. Remember Contractual obligations are not one sided. They cannot be, or it invalidates the contract-signing without reading each one is ignorance.—–
Ignorance is bliss, but not a defense……..why do you think Brokers want you to sign their agreements? Most know you will blindly sign them without review to keep your guys busy…….—–Once you sign, it is on you to understand what the agreement is………REDACT!!
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