Freight Broker Yes or No (remeber the 3 golden rules)

[Jack and Sharon Martin]

Starting a new freight brokerage business automatically brings skepticism. When you start cold calling, don’t be surprised if you get 50 “no” answers before you get 1 “yes” answer. Why? Freight Brokers have not had a very good reputation for quite a few years now. Thus, making it even harder for a new freight broker to get started or become well established. Can it be done? Yes. Is it going to be easy? No. By now you are probably wondering why a freight broker will get 50 “no’s” before getting 1 “yes.” Bad business practices. How? There were and are a lot of freight brokers out there that will take the money and run. Meaning? The freight broker decides to take a load from the shipper, then he contracts it to a carrier, collects the monies in due time but then he never pays the carrier. This can become quite profitable in the 30-120 days it takes for the circle to be completed. By then, the freight brokerage office has closed down, taken the profits, paid another surety bond, and opened a new freight brokerage in another name. Thereby starting the process all over again. Is it legal? No. But anybody can go out of business, and any company can close down, so most of the time they get away with it. While this is a scary thought, new freight broker companies should be aware of why they get more "no's" than "yes's" And how they can help overcome a lot of the skepticism. Yes, you can be honest. Yes, you can have integrity. Yes, you can provide excellent customer service. Yes, you can keep up with the FMCSA. And as it stands now, every freight brokerage must have a Surety Bond in place. But hopefully in the near future, the cost of the Surety Bond will be raised in order to help weed out a lot of those who make a habit of doing this type of business. And this is not all that they have done to tarnish a freight brokers' reputation. A lot of freight brokers out there still make a living by ripping off the truck. What does this mean? They keep monies that should go to the truck but does not because the freight broker lies. The freight broker lies? Yes. Should you lie? No. How do they lie? When they tell the truck the extra fees that are sometimes required aren’t payable, when in fact they were paid to the freight broker. Only the freight broker did not pass them on to the truck, he pocketed them. Do things like this really happen? Yes. Should they happen? No. Sad but true, these are some of the obstacles a new freight broker has to overcome. But now you know some of the reasons why a new freight broker might get 50 "no" answers before he gets 1 "yes."
http://www.a1freighttraining.com

[Joette Mateer]

Is there such a thing as a flat rate brokerage? Has anyone tried this? Or, does everyone use a percentage?

Joette

[JR]

It's sad that there are people out there that have done this. That have made there living by ripping people off. I never dreamed that someone could do it this way. Hopefully all the newcomers to this profession live by the golden rules and we can make this end of the business even more noble. Have the carriers looking to us to complete the cycle. And letting the trucking industry realize we broker/agents are trying to make a living just as they are. Lets all have a clear conscious every time we lay our heads down to sleep.
Dale Jr.

[Stephen J Rebro Sr]

I've managed a freight broker division at our trucking company for a few years now. Originally we took on broker agents across the country and Canada. After a year and a half we realized that we were spending too much money training people and getting them into our system. Also, we took on a couple of experienced broker agents that we thought would really help us get to the next level. Both were from different parts of the country and both of them cost us a lot of money. They were involved with criminal activity using our name and information. One of them moved about 20 loads, changed the address for receivables to his residents for the shipper and ran off leaving us to pay the carriers. He ended up in jail but it cost us about $25,000 to negotiate a settlement with each carrier to protect our reputation and credit rating. The other guy used false carrier info to get comchecks for carriers needing a fuel advance before taking the load. He ran off with about $35,000. I know that sounds like a lot but we also had an internal problem with our system in the office that made it possible for him to take advantage of us. Needless to say we learned the hard way about being prudent. We no longer work with agents outside our local area, but if I would do it again I wouldn't work with anyone I didn't meet face to face. Even then there are risk you can't always avoid. I never thought that anyone would do something like that. We're still trying to recover from it.