channel 19

Todd Dills

Talk of broker transaction transparency continues

| May 22, 2014

I wrote about DOTAuthority.com’s James Lamb’s new 12PL brokerage following its initial reveal in a session at the Mid-America Trucking Show two months ago. Lamb, also the primary party behind the AIPBA small-brokers business league, talked a lot about the notion of necessary transparency in broker-carrier transactions and how his new effort would explicitly advertise the percentage rate the broker would be taking on any load, and how doing so might have ripple effects throughout the industry if enough people mimick such practices. 

While there’s certainly more to it than all that, I thought I’d point you today to a discussion happening via Allen and Donna Smith’s Truth About Trucking Live tonight, where Lamb will be a guest. It starts up at 5 p.m. Central, and their shows typically run from an hour and a half or so — and are archived for replay following.

More details about the new brokerage will be on offer, Lamb says.

After my prior piece following his MATS session, readers’ voices expressing skepticism on the issue outweighed those seeing a need for transparency. “I really don’t understand why brokers need to be transparent,” wrote one reader. “I’m an owner-operator with my own authority and I really don’t care what the customer is paying the broker. I do care what the broker is paying me. If the broker wants to, he can charge double what he’s paying me, as long as I’m happy with what I’m getting. I look at my own plate, not someone else’s.”

Del Ray Johnson had similar thoughts: “I really doubt that big trucking companies need this so-called ‘transparency’ from brokers,” he wrote, noting their leverage over most in dictating what “we are going to charge to transport their freight. The unknowing owner-operator allows other people tell them what is the number,” with plenty being willing, he added, to run on very, very thin margins. ”That, my friends, is the problem, and the solution is an educated owner-operator who runs his/her big rig like a big business.” 

An independent dispatcher, Teirre McDonald also expressed some skepticism over whether transparency would make much of a difference in the end — or that it would be truly transparent. “Hard to believe from this side of it,” McDonald noted. “I work for my owner-operators to get them the best rates and deal with the brokers so they can concentrate on driving. Brokers do try to get over, and you shouldn’t have to continue to fight with them over rates … and most definitely getting paid! I would say beware, just because I don’t see a broker ever revealing what the load really pays.” 

Related

Transparent ‘new deal’ for independents using brokers?

How might more rate transparency in broker/owner-operator negotiations help drivers all throughout the industry? DOTAuthority.com/AIPBA's James Lamb believes quite a lot...

Lamb himself counters that his intentions are genuine and that he believes that “transparency in freight rates is coming.” As I wrote in previous coverage, Lamb would not be the only entity moving in such directions.

“Some will resist but it’s a matter of time. And it will make both shippers see they are paying reasonable rates… and truckers see they are being paid fairly. They will both want to do business with transparent brokers. Like 12PL. And it will catch on quick.”

Further, he hoped truckers and brokers would “change their bad attitudes and animosity toward one another” and truly work together toward a more fair industry. 

  • Pingback: Talk of transparency in broker-carrier transactions continues | iTruckTV

  • Better Call Saul

    A person who makes a living by trying to pass himself off as an Enforcement Agency and/or the IRS is hardly the person you want to drive our bus to “transparancy”

  • cw

    when you deal with load boards for a long period Of time you will soon be aware of how two different brokers will have completely different prices on the same exact load often as much as 40 percent

  • Clint Seals

    I would say its about time any way I know that I have been a victim of rate gouging from some Brokers . So I find myself always having to negotiate my rate in order to make it fair. I welcome this transparency concept , Let the good Brokers start stomping on those shaky ones. and eliminate them.

  • Big R Phillips

    I pull containers and i know we’re getting screwed on the rates! So hell yeah i would love for there to be transparency in the intermodal industry. A few of us have been privy to see the original invoice from the shipper. And there is a huge difference in what that invoice says and what our true percentage should be. The fuel surcharge is usually not 100% and out dated as well. So yeah i’m all for it. There’s a huge increase of shipping containers coming and it takes a special breed to haul these things on a daily. Plus they will ruin the best of trucks
    So we need to get paid to maintain our trucks because the DOT and all these other “DiKheads” with a badge just wanna generate revenue for thier towns!

  • sodakpilotcars

    The way I see it as a retired trucker and now a broker and dispatcher if you were happy with what you are getting paid whats the problem?

  • mike

    I am. happy with the rates i get /I do not haul it cheap nowI dont win all the loads but i get what i need/ do not load cheap freight on your trailer .what get cut off the top does not matter get yours. A lot of the problem is brokers leting the shippers dictate to them what the rat is then broker take it and try to move it afraid to ask the shipper for more let that load sit. CARRIER AND BROKERS NEED TO SET RATE if not just lease your truck back and be happy with what you earn. THE MEGA FLEETS DID NOT GET BIG BUY LETING PEAPLE WALK ON THEM GET SOME BALLS and your rates will go up provide the best service and demand a good rate Im done.

  • Richard

    I never have pressed the you have to tell me as the carrier what you as a broker are getting paid issue. With that said I would really like to know. Yes I’m sure if I saw that real number I would feal cheated. However what happens if a broker has a carrier that develops an issue IE a medical emergency, major breakdown? That broker might have to repower, reload, or do something else with that load to keep their customer happy. That money paid to do that could exceed their billing. So I’ve always gone by the standard if I’m happy with what the load pays I take it if I’m not I negotiate and if we can’t come to terms I move on.
    What I believe this Mr. Lamb should choose to champion as his cause is the decrease in Days To Pay Why in this country is it I owe somebody money they set the terms but as a business man performing work for someone (they owe me money) again they set the terms. I believe that’s the larger problem for small businesses

  • LGC

    I have both a trucking company and a freight brokerage. The issue isn’t only with the brokers being transparent because the company that the O/O is leased onto isn’t so how will it benefit them unless they’re an independent? I do forward rate sheets from the broker to the drivers in my trucking company because almost all of our loads come from outside brokers, so as a trucking company I am 100% transparent and always have been. As for the brokerage side, we make 5-10% or less. Most owner ops have no idea what the costs are of doing business as a broker or the time and money spent with sales calls, follow ups, etc. To get loads to offer. Further, I don’t see O/O’s offering up as transparency what their profit is to the broker, so why should the broker? Truth is I would love to always make 10% and give the rest to the truck, I would be happy with 5% but reality is its usually lower and that some loads I lose money because a delivery is screwed up by the carrier, or the shipper doesn’t pay the detention, or a truck breaks dkwn and I have to get another carrier to finish the load, or the thousands of other things that can go wrong including a shipper not paying their bill! So saying a broker should be transparent is opening pandoras box to a plethora of other requests for transparencies by the broker back to those asking. Additionally it opens up the ability for other brokerages who also have trucks to know what deal another broker has with a shipper so they can under bid their price to get the contract and that only leads to rates declining to the truck! It’s best not to ask and just manage your own business. If you are getting a fair rate for a load take it, if not don’t. We can’t make the freight business into socialism and wouldn’t want to.

  • mikehaul cheap

    You start regulating everything and some jackhole that has no real idea what it takes to stay in in this game will say and regulate a rate for you trust me we dont want this. saying truck o awaydont need this much its causing goods to go up in stores. Just like all the regulations we are dealing with now, bite the bullit get your rates the cheap trucks hauling cheap will not last dont be this guy.

  • mikehaul cheap

    lgc is right

  • mike

    Lgc told us about the outher side of things//you as a o/o have to know your cost to run then proffit numbers to stay in this its a fine nan line between gougeing broker and shipper and makeing money with a fair rate. If the loads a looser dont run it just for fuel sit for a better one get better at negotiating.

  • mike

    THIS I will say even a lease is up for dickering back and forth if they want your truck try it>.

  • FoxStar

    Don’t get why there is so much cynicism. A lot goes into that shipping office giving you your load again and again.

    It’s not free to have someone else create these loads. There’s also the balance between how much they pay the truck that moves the load, the shipper who needs to move it and how much they keep to stay in business.

    You’re not always getting screwed and if you know your stuff, you won haul stuff for too cheap.

  • Just Me

    Hmmm, seems like a lot of brokers are here posting. If you are an owner operator and don’t care what the broker makes you are simply a fool with no desire to grow your business. There is a need for brokers in this business and they need to make money. But they do not buy one single drop of fuel to run their business. Many seem to think they should make as much as the truck for a load and you would be very surprised how many do because you have no idea what the load really pays. A broker that cries “you don’t know how much it cost to run my business”, knows nothing about the business. They don’t pay $1,000.00 plus a month insurance. They don’t have a $1.500.00 a month truck payment and they sure as hell don’t spend $400.00 every single day on fuel to run their business and have to deal with DOT everyday. There are way too many fingers in the pie when it comes to trucking. The entire country depends on trucking for everything, yet the turn over rate for drivers is 100% because you can make the same money working at Home Depot for half the hours and sleep in your bed every night. Trucks are over regulated in every way. It would do brokers good to share in that.

  • Just Me

    I find it very sad that it upsets you so much to have to work for a living. You haven’t stopped to consider that when that truck breaks down, that driver has now lost his income for the load and also has a huge repair bill for his broken truck. But that isn’t as big a deal as it is for you to have to pick up the phone and book another to go get that load. I mean that could take you at least ten minutes and you still are getting paid your cut without a broken down truck to repair. I bet your finger gets so sore having to dial that phone and put in all that extra work. Yes you do deserve to make as much as the truck. I see it now!!! You poor feller…

  • Barefoote

    If you are running a hussell

  • jim stewart

    Knowing what customers I deal with regularly are willing to pay and then finding some of these same loads posted on the freight-boards is sometimes scary but gives one a good inside to who it is playing games with the trucking rates! I consider on a rate scale from one through ten, ten being the high end, I may be around an eight on pricing my loads. Funny I have no problem whatsoever staying busy today selling service rather than discounts. Actually my problem is not being able to handle more work than what I’m able to do now. Yes like many others I find some unbelievable distance between rate figures within individual companies looking for others to move their overflow or some of the internet brokers. I believe that transparancy should start with the port intermodal companies who hire those owner-op’s that move the ocean cans.Those guys are being ripped worse than anyone else in the industry. I cannot believe intermodal carriers can continue to find truckers that will work for one half what port work should be paying. I stopped the other day at a fuel stop in our port city to eat and had four leaflets on my windshield when I returned an hour later. The general theme of these flyers it seemed to be centered around a $1,000 sign on bonus and the highest pay was at a few pennies over a buck per mile. One was $.90 per mile (I’m sure that was miles determined by them too)!! I really was temped to call and ask what they paid if I brought my damn truck with me to work? Very sad situation indeed and it only drags other freight rates into the toilet with these ludicrous leasing offers!

  • Barefoote

    Brokers have their hussell and doesn’t want anybody to mess with it. Transparency only hurt the bad brokers not the good ones. those brokers against transparency want to keep the hussell alive.
    Look, David Dwinell’s “www.loadtraining.com” get the free DVD” tells you that O/O leased to carriers is modern day slavery. So brokers and Carriers are in the slave trade business. Why you may ask. David Broker school understands where the money is and it is not with the trucks and trailers, Rex Evilzior compliance and freight brokerage company said that ” money in trucking is not in owning trucks and trailers. So from the elite professional brokers brokers make all the money with little or no liability. They brag about not ever having purchased insurance, because they are not liable. So you brokers can talk all you want but the truth is out there.

  • Allan

    If you’re paying $1000+ per month for insurance you are the fool.

  • 4b

    We take the risk, the insurance, the delays, the hassle of traffic, shippers and receivers. We should get the cut we deserve ..the threats of 500 buck fines of we are late god forbid a mechanical problem..you are idiots to say of you are happy with what you get is enough then you should not be in this business…time to cap brokers at a percentage …the truck does the work…period….

  • SemperFi

    This topic is pointless. If you operate the truck you already have the right to see what the broker gets paid. you just need to ask. 49 C.F.R. 371.3, requires all brokers to keep records of each transaction, who, how much, etc.- ALL PARTIES to the transaction has the right to review this record. If the broker refuses, there is an enforcement provision where you can get a Court order requiring they produce it and broker gets to pay all legal fees.

  • jan johnson

    You right there paper chace has turned into brokers getting worthy. We fileing bankruptcy. And there no one to stop them until the last truck gone. That want happen. So how do you plan to get rid of the brokers?

  • TrOpAzR

    Brokers don’t make as much money as you think we do. I’ve been with a large brokerage for years and 90% of us are making less than 40k a year. Yes there are big brokers in my company making a lot of money but they aren’t making that money on giant margins. They are making their money on moving volume with smaller margins in the 5-7% range. I wish owner ops and smaller carriers would realize the majority of brokers are on your side. We don’t care what we pay you to do the job well as long as the customer will pay it…not all customers will pay it and that hurts our bottom line as well.

    TLDR; Brokers aren’t always out to get you.

  • Jim

    We never charge more than 10% on any shipment we move and most of the time we are in the 3%-5% range. We do NOT however, pay detention or any other incidentals on any shippers load. We negotiate these extras before we agree to move any load. Paying anything out of pocket to move a load for any customer will put you out of business. Moving a load from time to time and not making any commission is acceptable but I wouldn’t make it habit. We believe in getting a competitive cost for our shippers and getting a good rate for our carriers and we do this by keeping commissions low and service high.

  • kwintpan

    if you don’t make that much then you won’t mind us seeing what the load pays but I worked for a company who had a broker side to it and they were takin 50% just to make a few phone calls that’s fair to right that’s why you don’t whant us to see

  • TrOpAzR

    I don’t understand. Without you agreeing to the rate I can’t load your truck. Therefore, any carrier who provides me with a driver/truck/trailer for a brokered load has agreed to perform a service at a price that is acceptable to them. As much as any broker would like – we can’t just load your equipment without you agreeing to it.

    If anything, there should be transparency in detention fees and that’s it. In my opinion, it is absolutely unacceptable for a broker to make any extra money on detention – that should be given directly to the driver/carrier for their time and I’d say the vast majority of brokers do this. There are bad apples – but the bad apples exist on both sides. Detention is good for everyone…it forces the shippers to do their job and is often the only recourse brokers and carriers have against them.

    The unspoken truth is a lot of owner operators & smaller carriers don’t have the necessary skills/resources to be able to get the business from the shippers in the first place which is why they use brokers.

    If you are unhappy with the rates don’t use brokers. Go out and get the clients yourself and set your own rates. If you think you can do the job better than the broker can – do it! There is a reason shippers use brokers and it’s not because we treat our carriers as slaves. It’s the customer service, the technology, the billing, the responsibility, the accountability, and all the other stuff that goes on behind the scenes.

  • Cary Davis

    That’s not true. I have been on both sides as a driver, a brokering agent, and a fleet manager.

    When discussing the “fee” that my trucks would haul for, you could rarely if ever “negotiate” a fair rate. The brokers would say the load doesn’t have that much money in it. But at the same time due to a lack of transparency we don’t know one way or the other if that is indeed true.

    As a broker we were instructed to move the freight in the cheapest manner possible regardless of the quality of the company we are brokering to. Brokers always look for the bottom feeders, who in turn are forcing the rest of the trucking companies out there to accept these rates as well. If we were spending beyond the margin the brokering company wanted to pay to maintain their lush profits, we were repremanded, or even released from employment.

    That’s the truth of the matter whether you want to admit it openly in this forum or not!

  • Cary Davis

    You are absolutely correct. And any broker that comes here claiming otherwise is a liar!

  • Cary Davis

    Everything is too cheap!

    You don’t have to worry about losing all your profit if a wheel falls off your swivel chair while sitting at the desk.

    DOT is not randomly hitting you day in and day out at your desk, fining you for having a chafed phone cord.

    You don’t spend $400 a day to turn your computer on. etc.etc.

    You are out of touch with the cost variances between the broker and the trucker. Get with the program please!

    Stop accepting chaep freight from the shippers, stealing your 40-50% and passing the carcass on to the drivers to try to make a living off of.

  • Cary Davis

    Their have been other spouting this same slogan for the last 27 years I have been in the business, and nothing has changed except more taxation and a drop in rates.

  • Cary Davis

    Because when you look at the broader picture there are always exceptions to the rule, but for the most part drivers are starving and the owner operators are a dying breed which are being replaced by conglomerates who dictate through lobbyists what direction the industry will head. FYI they don’t have YOU the driver at the forefront of that process. It is a self serving interest for their shareholders.

  • Cary Davis

    So sit for a week in the middle of nowhere spending money day in and day out to survive on the off chance a better load comes along? Yeah that makes more sense that having transparency and seeing what the load pays. That’s the entire point here. The load may actually have the money you would need to take it, but the broker stealing their 40-50% off the top just tells you there isn’t enough money to cover what you are asking. They know eventually you will have to take the load to move to a better location for freight.

  • Cary Davis

    So you get loads from a broker and then broker that load to an o/o. So the pie has two clices out of it prior to even being booked with a carrier. Hmmmm interesting.

  • Cary Davis

    So you are going to do all that while waiting on a load? You have the money to spend and time to waste following this train of thought? for the lawyers? Get your nose out of the book and take a look at the reality of trucking. Up front transparency is easier than trying to force a broker to follow some regulation. Typical o/o don’t have the resources to follow the path you suggest!

  • Kevin J. Rea

    So you are saying you would prefer to deal directly with the shipper?

  • jjg614

    most are trying to make money on our hard work

  • jjg614

    try living in the northeast and trying to get out when they want to pay you 1.00 a mile when it cost .80 cents a mile JUST for fuel not to mention insurance, repair’s, truck payment, tolls,etc. so i welcome the transparency so i can REALLY see what their get from the shipper, and if the shipper rate’s are low then they will have to be raised.

  • TrOpAzR

    And this is why all “brokers” get a bad rap. The company you just described DOES exist….there is no denying that fact. For every good company there are three others operating poorly. For management to do that to their employees & customers is simply bad business and eventually it will catch up to them. The free market has a way of working itself out with issues like this.

    As a broker at my company, the choice is mine whether I load a “bottom feeder” or not. The directive has never come from management to load “bottom feeders”. Why would I as a broker risk future business with a well paying customer by putting a carrier/driver with a bad track record on their loads? Do you not think there is an evaluation of every carrier we work with? We know who the bottom feeders are and we know who the good carriers are.

    There is a reason these “bottom feeder” carriers are cheap – they run illegal, they don’t maintain their equipment, they don’t follow the rules at shippers/receivers and that affects MY business negatively when I choose to use them. When a cheap carrier breaks down because they don’t maintain their equipment or a driver gets popped by the DOT for running illegal..who takes the rap for loading them? I do. Most brokers would rather not jeopardize future business by making a quick buck off a cheap carrier.

    However…some customers simply can’t afford to pay anyone OTHER THAN the cheaper carrier. Brokers don’t like these types of clients either but the freight has to move somehow – if you or I don’t move it someone else will. Herein lies the problem.

    Quite frankly, if you aren’t happy with the rate – don’t haul the load.

    That will put the cheap carriers, shippers, & receivers out of business and you’ll be doing the “good brokers” a service as well.

  • jjg614

    i see the SAME loads on the internet from different broker’s and iv’e seen more than 500.00 dollars difference in the rate,so someone is getting rich.

  • jjg614

    choptank are you listening?

  • http://www.AskTheTrucker.com Allen Smith

    Dealing With Freight Brokers: Your Right To Know

    “,,,,know what rate the shipper agreed to pay the broker and what percentage
    of the shipper rate the broker kept. Was it 15%? Maybe 25%? How about
    45%! Well, guess what… under Federal Regulations, you have a right to
    know! All you need to do is ask.,,,”

    49 C.F.R. Section 371.3 states:

    “A broker must keep a record of each of its transactions, and keep
    the records for three years. Each party to a brokered transaction has
    the right to review the record of the transaction applicable to them.
    For example, motor carriers accepting transportation shipments from
    brokers have the right to review any of the required documents retained
    by brokers…

    http://news.careersingear.com/road-blog/dealing-freight-brokers/

  • TrOpAzR

    You work hard as a truck driver. But manual laborers work hard too and oftentimes for much less money. It’s a thankless job. No one gets it more than I do but don’t just blame it on the broker.

    In fact, why don’t you start with getting rid of the shady dispatcher/carrier who are really the ones forcing you to take these runs for pennies on the dollar.

    There is a reason the industry is facing a driver shortage. No one wants to work a thankless job but I respect the hardworking owner op who treats his business as an actual BUSINESS. That means being good at the things that make a business successful. Just because you drive a truck as a career doesn’t mean you should run your business poorly.

  • g

    Broker means Lying Cheating Thieving Ripoff Artist…dont belive any of this total BS about them EVER being transparent.

  • FoxStar

    I’m not a broker, I’m a company driver who wants to be an O/O sometime soon, so I’ve been doing some homework.

    Who are you to say how much they get paid? That’s none of our business!

    The market will correct the bad apples out when shippers aren’t getting value, drivers don’t haul at cheap rates.

    And people seem to forget that brokers are a CONVENIENCE!!!!

    There’s nothing stopping O/O from establishing their own relationships with the shippers!

    But since no one wants to do that, brokers is a viable business.

    Shippers pay more to get their stuff moved, and driver get paid less to move it.

  • Jon McLaughlin

    As a driver, leased to a company where I searched for my own loads, I have been cussed out by a shipper for the cost that “I” charged to haul their freight. I asked what was so bad about me getting $1.50 a mile? He told me that I was lying. He showed me the contract with the “Broker”. I, in turn showed him my Rate Confirmation sheet. That broker was charging him $3.33 a mile and FSG of $.49. That was $3.82 a mile that the broker charged and I had to beg just to get an extra $.10 a mile to get the $1.50 to haul a heavy load east out of Salt Lake City. The Honest Broker pocketed the FSG and also made $1.83 a mile on the line haul. In turn I had a reduction in my MPG from 6MPG to 4.8MPG until I hit Cheyenne, WY, there after it was 5.6 MPG. Who made money on that load, the lying Broker!!! You as an Agent within the brokerage may only be making 5-7%, but what is the owner actually making, do you “actually see” his contract with the shipper.

  • Roger Xavier Jackson

    Most big truck carrier’s are brokers to and all double broker load.If you listen closely they tell on themselves about double and triple brokerage.O/O deserve 95% broker 5 or share the transportation expense, tickets, miles driving, truck repairs, dot headache, truck purchase,irs bill, insurance, 2290 bill, Fuel tax,1750 plates, tolls and everything else they require. Truck drivers will help you answer phone and computer to lie cheat and steal

  • guest

    Exactly. Broker means CROOK.

  • Roger Xavier Jackson

    What is there to hide transparency is to keep both parties honest hmm

  • Roger Xavier Jackson

    Brokers and dispatcher is the big problem

OverdriveOnline.com strives to maintain an open forum for reader opinions. Click here to read our comment policy.