Brokers and owner-operators: A view from the other side

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Even if all my fingers were amputated, I could count on one hand the number of positive remarks I’ve heard from owner-operators about brokers. I don’t doubt your horror stories of lies. Late payments. Ridiculously low payments. No payments.

“Some drivers think us making $50 a load is too much,” says broker Jennifer Nolan. As a relationship between the broker and an owner-operator develops, rate negotiations go more smoothly.“Some drivers think us making $50 a load is too much,” says broker Jennifer Nolan. As a relationship between the broker and an owner-operator develops, rate negotiations go more smoothly.

Nevertheless, I was curious about brokers’ side of the story, and Transportation & Logistical Services owner Jason King was open to letting me hang out at his office in suburban Birmingham, Alabama. TLS has eight brokers, dealing mostly with fleets of 10 or fewer trucks. Thirty percent of their revenue comes from the U.S. Department of Defense. Eighty percent of the loads are open-deck.

Some of these brokers, having worked at far bigger operations, were quick to tell me the advantages of a smaller shop, including rates. King admits TLS may get a higher rate for providing a higher level of service, but in turn pays their carrier partners better rates than some other brokers. So TLS might not be your typical brokerage. (In a Birmingham Business Journal contest, TLS came in second as the best place to work, perhaps a good indicator of how they treat owner-operators and others, too.)

Good communication requires paying attention to details, and when that fails it can hurt everyone involved. Broker Jake Sullivan recalled sending someone into a military base in Corpus Christi, Texas. Sullivan reminded the driver that no gun is allowed on the truck, which was also stated in the contract. Nevertheless, the driver showed up with a gun and didn’t reveal it before his truck was searched. Not only was the load refused, but “I ended up getting suspended from the account for 30 days,” Sullivan said.Good communication requires paying attention to details, and when that fails it can hurt everyone involved. Broker Jake Sullivan recalled sending someone into a military base in Corpus Christi, Texas. Sullivan reminded the driver that no gun is allowed on the truck, which was also stated in the contract. Nevertheless, the driver showed up with a gun and didn’t reveal it before his truck was searched. Not only was the load refused, but “I ended up getting suspended from the account for 30 days,” Sullivan said.

Here are some observations about TLS, as well as brokers’ accounts of what they do. Comment below as to how this compares to your experience with brokers:

BROKERS ARE SALESPEOPLE FIRST, LOGISTICS TECHNICIANS SECOND. When hiring, King looks not so much for transportation experience but for someone with “personality, drive, ambition” and “who can talk to a brick wall,” he says. Some big brokerages, he adds, use individuals with the strongest people skills for getting new business and let others handle the dispatching and trouble-shooting.

On the day I visited TLS, broker Jeremy Hines was out during normal morning business hours. On the way home the day before, a good customer called with an emergency load. Working from home, Hines found a truck by 10:30 p.m. He later learned that the customer had provided bad information about the truck’s existing freight, which meant it couldn’t handle the emergency load. “Finally at 3:30 I took a shower and came in,” Hines recalled that afternoon. By 6:30 a.m., he secured another truck. “My philosophy is: If I don’t answer the phone, another broker will.”On the day I visited TLS, broker Jeremy Hines was out during normal morning business hours. On the way home the day before, a good customer called with an emergency load. Working from home, Hines found a truck by 10:30 p.m. He later learned that the customer had provided bad information about the truck’s existing freight, which meant it couldn’t handle the emergency load. “Finally at 3:30 I took a shower and came in,” Hines recalled that afternoon. By 6:30 a.m., he secured another truck. “My philosophy is: If I don’t answer the phone, another broker will.”

BROKERS DO NOT HOARD PROFITS ON EVERY LOAD. Negotiating rates is standard. Like its competitors, TLS expects most loads to yield about a 15 percent profit margin, or less on high-mileage runs. TLS gets the rare large margin on some loads, but that’s offset by other loads where, to keep a large customer happy, they fulfill an order with little or no profit. Sometimes they take a loss of a few hundred dollars because truck capacity isn’t there or because they made a bad estimate of what the load should pay. TLS pays its haulers in 30 days, but except for the DOD business, TLS gets paid in a 60-day window. “I’m having to cover that spread,” King says.

In his seven months with TLS, Braxton Maske says he’s learned a lot about building relationships and now has 60 to 70 owner-operators he works with regularly. “There’s a couple of guys, they might as well have TLS on the side of the truck because we keep their truck loaded 95 percent of the time,” he says.In his seven months with TLS, Braxton Maske says he’s learned a lot about building relationships and now has 60 to 70 owner-operators he works with regularly. “There’s a couple of guys, they might as well have TLS on the side of the truck because we keep their truck loaded 95 percent of the time,” he says.

THE HIGHEST DEMAND FOR TRUCKS COMES AT THE END OF EACH MONTH. Because some shippers move aggressively to boost monthly sales figures, the most freight is available late in the month and the first weekdays in the new month. At TLS, truck demand is often high on Tuesdays and Thursdays, low after lunch time on Fridays until Monday morning.

RELATIONSHIP IS KEY. It’s in brokers’ self-interest to treat you right, not screw you. “We don’t have the luxury of burning all these carriers like the bigger brokerages can,” says broker Jake Sullivan. Like a good carrier, a broker looks to build trust so that each party’s reliability smooths the way for a long, mutually profitable relationship. It’s a lot easier for a broker to make a quick match with a trusted owner-operator or fleet, which is how TLS places the vast majority of its loads, than to have to post the load and start from scratch, with all the accompanying risk.

COMMUNICATION HELPS BUILD RELATIONSHIPS. Staying in touch from pickup to delivery annoys some owner-operators, but it’s crucial to the other involved parties. Once an owner-operator is known to be dependable and truthful, the intense monitoring lightens up. It goes without saying that honesty is essential, too, and it takes time for each side to trust the other. At first, “They always assume that we’re lying,” says broker Jennifer Nolan. “We always assume they’re lying.”

A BROKER CAN HELP WITH DETENTION. TLS will warn drivers if they know a load has a chance of unpaid detention, and is willing to help drivers get detention pay. Again, communication helps: If TLS gets a call as soon as two hours at the dock have passed, they’ll make calls about getting detention. But, notes King, “a lot of these guys won’t call till they’ve been there six hours.” Nolan says in her prior job with a large brokerage, the company would not even request detention pay unless it was already in the contract.

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