Be forewarned, this could turn into a bit of a rant if I’m not careful. And I’m in a real frisky mood, so I probably won’t be.
Careful, I mean. In fact, I’m going to advocate breaking just about every conventional rule for finding freight, and do it with a slightly deranged looking grin on my face as I madly type this missive…
Yes, I’m just that disgusted with the “leech system” as I’ve come to describe it to myself inside my head.
So here’s what I’ve decided about load brokers, load boards, and other ‘conventional’ methods of finding freight… it’s a big pocketful of cash for the above listed fellows, and a shamefully crappy deal for the carrier / owner operator.
In my humble opinion, the only way to make decent money and maintain some sense of sanity in this business (unless you just happen to actually enjoy enriching others while you starve, as well as the urge to beat your own head on a rock in frustration) is to get direct customers. And more specifically, preferably good direct customers who pay on time.
And on the subject of customers paying, let’s just throw factoring companies into the mix of things to avoid in this business. I’ll get back to those fine fellers a little later…
The bottom line is you’re probably considerably better off without any of the above.
Why do I say this, you might well ask.
You know how I am if you have been keeping up with my blogging here, and you probably have already correctly guessed that I’m about to tell you exactly why it is that I say this. That’s historically been my M/O at any rate and I don’t see any reason to change my wicked ways now…
Anyway… the reasons I’m soured on brokers and load boards for finding work are multiple, but the two biggest reasons are the lack of decent pay, and the lack of autonomy. Oh yeah, and the lack of respect. I almost forgot that one.
In my pursuit toward the goal of getting a load on my truck, I’ve tried just about everything and have settled firmly on the idea of getting more direct customers. I’ve come to the conclusion that every good direct customer is worth a gaggle of any of the above listed folks. Use any number you wish to define a gaggle. It still adds up the same.
I talked to a friend today at another trucking company who is having the same issues. She said that their load broker is generously giving them just over 2 bucks per mile. And that is for big trucks with full loads, mind you, which actually do cost quite a bit more to operate than my little one.
That sounds like a lot per mile you say. Well, it is. But it takes a lot per mile to run. Not just in diesel fuel either, which is just one of a multitude of expenses involved in running a trucking company.
More to the point though, this stinks to high heaven when you know for a fact that the broker is charging the customer at least $4 per mile, which I do happen to know for a fact regarding this particular broker. Don’t ask me how I know that as I’d have to kill you if I told you and I’m not feeling homicidal in the least. Just frisky.
Now, you tell me, who’s paying all of the expenses involved in moving that freight? It ain’t the broker, that’s for sure. And I’d just about bet it costs a whole hell of a lot less to pay bills for a cubicle with a laptop, fax machine, and a telephone in it than it does to run a truck. I’d guess you could throw in a fancy coffee machine with a personal barista and masseuse combo, and the cost would still pale in comparison to the expense of running that one truck.
Now to me, if a broker wants to play nice and be fair to their carriers, they shouldn’t exactly hog all of the profit. Considering that a carrier with one or two trucks can only run so much, but a broker can have a stable full of carriers, and cutting 40 or 50% on every load every one of the trucks that belong to those carriers hauls… well, it just doesn’t sit right with me at all that the broker is sucking up so much of the money generated by the multitude of people it takes to make their little greedy broker world go round. Hence the leech analogy.
If the shoe was on the other foot the broker wouldn’t like it either. But evidently that’s the way the broker game is played… so guess what, I refuse to play. Call me stubborn, that’s probably accurate… but I digress…
The other thing that really stinks is brokers who call repeatedly once they give you a load, call your dispatch and yell and carry on, call your driver and nag them to hurry, simultaneously whine and babysit and hold your hand until the load is delivered.
And give you, the carrier / owner no choice, mind you, on where you get sent, or what you haul, or give you any breaks on bad weather or crummy rush hour traffic, or any other consideration toward you as a human or responsible business person. Just cracking that whip and driving everybody nuts with super-micro-management. Now this doesn’t apply to all brokers, but those out there who are guilty of this should stop it already.
I’ll say that again to those obsessively controlling sorts of brokers… Stop it already! Sheesh, the company you broker to wants to deliver your stuff on time! Trust me when I tell you they want your freight off their truck as soon as humanly possible.
It doesn’t pay for them to drag their heels any more than it does to have to stop what they’re doing three or more times a day to answer your manic, frantic calls. And all to keep a grip on the short leash you’ve got on them when everything is going fine anyway. Loosen that grip just a little and have that masseuse give you a little working over. Relax and show a little confidence in the people who generate your income. Everyone involved will feel better for it.
And just as annoying are brokers who book loads but don’t get it quite right. I mean, if you tell me “Be at Widgetsgidgets at 7 am sharp and get that load,” and I show up only to be told, “Darn, we were expecting a big truck. We can’t load this on that little thing!”… that broker has just wasted my time and fuel, not to mention tried my patience, as I was probably counting on that load to cover one bill or another, and now I get sent home with no compensation at all and get to sit for 2 or 3 more days until another job comes up.
Which all adds up to a complete lack of respect and total disregard for the carriers that put the money in the brokers’ pockets in the first place.
So, thanks, but no thanks. I don’t need to pay for the privilege of being disrespected and abused, I can get that pretty much anywhere these days for free…
So what else has soured me on these dudes? Well, stupid questions from cheapskate brokers don’t help. I posted my truck on a couple of the load boards, and sure enough, got some calls.
That was the good part.
The bad part is that the cheapness of some of these people is just beyond me. Today, a nice sounding guy phoned me up and wanted to know how much I’d charge him to haul his plastic pipe 700 miles and advised me he’s never used a hot shot before.
When I told him my rate he coughed and sputtered, and puffed out with a slightly hurt tone, (and I quote) “Well that’s almost as much as a big truck costs me!”
So, says I, “Well, I cost almost as much to run as a big truck!”
“So, do all hot shots charge that much?” he gasped out. “No sir,” says I. Most of them charge quite a little bit more. We’re hot shots, we charge to move time sensitive freight real fast. ” About then his cell phone went dead. I don’t know if he hung up on me, or if it was the hand of God sparing me from saying anything insulting to a complete stranger.
Now, mind you, the rate I quoted him was not excessive, it wasn’t even a hot shot rate. It was just a simple normal freight rate. The same rate, actually, as my friend in the other trucking company was getting from her broker. And he acted like I’d stabbed him in the eye with something hot and cursed his offspring for 3 generations. Wow.
Either way, I got everything I needed to know about him from that little exchange. In short, he’s not willing to pay enough for a big truck to move his freight, so he’s looking at hot shots as a cheaper source of transport. Huh. Good luck there fella.
Then there was the broker who wanted someone to move his freight 600 miles for 400 bucks. Of course I had to waste time calling him to find out his pay rate since none of these jerks can manage to even bother listing a price on the load boards in the first place. And now I know why, they’re embarrassed to show anyone how truly cheap they are.
In effect, he wanted me to move his freight and pay 2 cents a mile out of my pocket to do it. Yeah, like that was going to happen…
There has to be a little incentive if you want me to foot the bill for the fuel and time to move your stuff. Something these brokers don’t seem to understand, I don’t know, like compensation or something maybe. Maybe it’s just me, but it seems like these brokers are cutting their own throats. How do they ever get anything moved operating like that? Darned if I know…
Then there’s the load board game itself, aside from above mentioned silly brokers who lurk there in load board land. And what a racket that is. Now, if you have a big truck, maybe things look brighter from where you sit relating to load boards. But each and every one I’ve found that advertises ‘hot shot loads’ is doing nothing but lying to get you to pony up hard-earned cash for nothing, and they know it.
To start with, hot shot loads are loads that have a short window for delivery. The ‘gotta be there asap’ type of cargo. Hot shot loads are not, I repeat, not, generic LTL loads of junk that pay less than a buck a mile.
Let me say that again in another way… if you have a listing to haul a beat to heck, second-hand fork lift from say, Bumfizzle to Kissmebet and those two fine fictitious burgs are 500 very real miles apart, and you generously offer $350 big ones for the privilege of delivering said junk, you do not have a hot shot load just because you think it’s cheaper to put it on my gooseneck than it is to put it on a big flatbed.
You have a LTL (less than truckload for the uninitiated) load and should not try to make it sound like it’s anything more than that. It’s just another low paying LTL load. It is not a hot shot load no matter how you want to try to dress it up. It’s kinda the silk purse/sow’s ear sort of thing but not exactly if you get my drift.
So the problem for the hot shot carrier and load boards is that they all seem to classify these extremely low paying loads (some as cheap as $0.50 per mile I might add) as hot shot loads. Non. Nope. Negatory, nyet, no. These are not hot shot loads and the boards that list them as such should be ashamed of themselves, and should be socked a good one for false advertising as well.
Now, remember, these boards charge anywhere north of about $45 bucks per month for ‘subscriptions’ to browse their listings and actually get to see things like telephone numbers and brokerage names. And when you call to tell them that their listings are not hot shot loads, even though they advertise them as such, they commiserate with you and try to get you to fall for the 2nd line of bull, that they’re working on getting better loads, just hang on and be patient.
Yeah, well, being patient on two or three of these boards gets you nothing, and costs you time, money, and aggravation. Oh yeah, frustration is the bonus payoff… but they don’t tell you that. So my advice is use your noggin regarding this dubious method of looking for freight.
Ok, now as promised, here’s my take on factoring companies when you actually manage to get your own direct customers. Go ahead and sign up with them, and you’ll get taken for a little ride.
On the surface it sounds like a reasonable deal. Especially non-recourse factoring where you actually sell your invoices to the factor for a fee, and they send you out a check, or do a direct deposit, or money wire to your account. Wonderful! Delightful! Yeah!
Well, maybe not so much. Just wait until you read the fine print, my friend.
Let’s see, now, that non-recourse fee for a hot shot will run you from about 5 to 10 % off the top of your invoiced amount. Not bad, you think. Particularly when you need operating cash, and they do get it to you fast.
But keep reading. Now you see that it costs you anywhere from $7 – $22 for each trip envelope you send in to the company. Hmmmm…. well, once a week I can live with that. Woah, slow down, those $7 envelopes can contain only 1, I repeat, 1 invoice. Each trip needs a separate envelope at some of these joints. Yep. So if you run 3 times a week, there’s a total of at least $21 on sending in your paperwork. At least, and probably as much as $60. And no, you cannot just drop them in the regular mail, and if you defy them and do so, and said invoices do not reach said factoring company in x number of days, they then charge you another fee.
SURPRISE! Yep, they hit you for another $5 a day per invoice for every day it’s late getting to them. Gotcha!
That’s not quite everything though… oh no, they actually charge you, yes, you, another $5 for each and every direct deposit they make to your checking account. Add that up three times a week and your up to another $15.
Oh, yeah, I almost forgot… they want you to use their fuel card too. It’s so convenient for you and you can get a percentage off the pump price. Great deal! Right? Yeah, until you get the bill for every transaction you used that card on. If I remember right, the charge for that was $3 a pop. Now fuel up about 4-5 times a week or so and you can add another $15 bucks to the tab.
And if you let them pay you on your fuel card so as not to have to pay for direct deposit or money transfers, they’ll charge that 3 bucks every time you use that card for a soda, or lunch, or to load up your ice chest or wash your truck. It adds up, believe me. Not such a great deal now, is it?
And all of those fees are taken out of your settlement before you ever see a cent from the factoring company. Kinda like paycheck deductions, but not really if you get my drift. Since it’s not a paycheck, but a settlement, and remember, taxes aren’t taken out. The factoring company will send you a 10-99 at the end of the year. Hold that thought…
If you’ve been keeping track, now you’re paying out your percentage for the factoring, plus a fee for bank deposits, plus a fee for envelopes, plus a fee for using the fuel card, and guess what… they take it all out of your weekly settlement.
But wait, there’s also another catch… they only factor ‘certain’ customers. You’re on your own collecting payment from those that aren’t ‘approved.’
Now, guess which of your customers they’ll factor. You got it! Only those who have great credit references! It doesn’t take a rocket scientist to realize that they’re skimming the cream off of your crop of customers and leaving the dogs for you to carry all of the risk on.
Let me repeat that, the factoring company will only buy invoices off of your customers that they know will, in all probability, pay them quickly. The ones they feel aren’t going to pay are the same ones you’ll be wishing they had factored, as they’re the ones who will fail to pay you.
Nice scam, huh? Yeah.
By the end of the year if you work your poor butt off and turn in $3500 a week in invoices, you will have forked over quite a bit over $13,000 to your factoring company, and that’s only if you got all of your invoices in on time, and didn’t use the fuel card.
And $13,000 for what. For the reduced risk of not getting paid by only a select few of your own customers but still being exposed to the risk of your other customers paying slow or not at all. And remember that thought I told you to hold? The one about the 10-99 at the end of the year? That $13,000 plus would be a little better spent paying the taxes you’ll owe, don’t ya think? Yeah, I thought so.
Oh my gosh, I almost forgot the best parts! Here, listen as this is really good stuff… Not only do they get you on all of this other stuff, but they will also nail you on the front side with an application fee somewhere around $500, and the contract you sign with them will obligate you to pay them another fee at the backside if you want to get out of the deal when you see how much of your cream they’re skimming, and that one is a biggie, around $1500.
I told you it was really good stuff… Not to say they all do all of these things, but they all do some of them, and none of them are your friend.
I repeat, none of these people are your friend. Not the load brokers, not the people who run the load boards, not the factoring folks, none. Remember that above all else.
Skipping the factoring company and giving a 10 day discount of 2% on your invoices directly to your customers is probably just as effective. If you want to dole out a percentage of your hard-earned money for a reward, then reward your good customers!
Not a single one of those ‘other people’ we already discussed who are not your friends.
And if a customer doesn’t pay up on time, damn it, don’t take any more loads from them until they’re caught up completely.
Either they’ll pony up because they’re a good customer and want to stay your customer, or they’ll not pay at all and tell you to pound sand if they’re crooked. Common sense says don’t give them the chance to hit you for a lot if they’re not paying anyway!
Now call me crazy, but unless there’s something I’m missing, I strongly suspect there’s a whole industry of scam artists in sheeps’ clothing out there doing their dead level best to shake loose every cent you generate in this business. The only tricky part to avoiding this big old shake down is not falling for it in the first place.
Go out and get some good customers on your own, suck up the slow period when you’re starting and tough it out until the money starts coming in, do a good job for the customers you do get so they’ll stay with you, and give these trucking industry brokers, load boards, and factoring leeches the brush off.
There, I think I’m finished. And just for the record, I didn’t write this to you necessarily, but I wrote it as a huge reminder to myself of the lessons I’m still learning as I stumble around trying to get a really good grasp on what it takes to get along in this business.
If it happens to help shine a little light on the whole enchilada for you too, then that’s a bonus for me. I know, I did rant a little. I told ya I was feeling frisky. Now didn’t I?