Insider Secrets to Successful Freight Brokering

Brokers and Truckers: How Do Each Figure Their Costs, etc.?

Brokers get paid by shippers to move loads. The broker, of course, has to find a truck to move the loads. In the final analysis, the broker pays out most of their income to carriers - as much as 80% to 90% typically. Yes, I know many truckers think the broker is paying out only 40% or 50%, keeping 50% to 60% for themselves. This is not the norm no matter what you hear.

Now, when it comes to carriers, they get their income from brokers and - very similar to brokers making payouts to carriers - these carriers need to pay for equipment, personnel, repairs, insurance, fuel, etc., etc., etc.

The question is: should brokers be concerned about the motor carrier's expenses? The short answer is, No. Why? Brokering and trucking are two related but completely separate businesses.

Brokers work on "margins", carriers work on "costs".

More importantly, the carrier's business smarts is the carrier's responsibility, not the broker's. Further, there is no way for the broker to know if the carrier is exercising smart business procedures or not.

When I go into a store and buy a donut, I don't ask myself, "Is 59 cents enough for the baker to pay for his electricity, dough, equipment, etc.?" No, that would be weird.

If a carrier is NOT working smart, that's the carrier's problem, not the brokers. If the carrier IS working smart that's good for everyone, especially for the carrier. His bottom line increases.

Keep this in mind - smart carriers who know their costs know how to bid competitively on loads. Not-so-smart carriers, without knowing their costs, may bid too high and lose loads.

The broker should tend to his margin while the carrier should tend to his costs.

 

 

Inflation is low .... but are you factoring this into your business?

Right now, inflation is low, it has been low for some time and, although it may increase in the intermediate future, it should not get out of control.

Inflation is the percentage that costs rise over a period of time. Some inflation is good, if not necessary.

But here is the thing, if you are creating your price structure (for example, in trucking), you need to factor in some inflation for less obvious costs such as wages (if you are self-employed), medical and retirement - especially medical costs which you really need to take into consideration as you prepare your bids.

What I'm saying is that if you determine you need $1.30 per mile to cover your costs and provide a decent profit today, you may need $1,45 sometime in the future to cover your costs, including, as I mentioned, those less obvious costs that some individuals don't factor in.

Now, brokers only need to get their 10-15% (or more) margin. Let's say that today a shipper is offering to pay $3K to move a load and if the broker gets 12% on this load, the broker is getting $360. But over time, let's say, the shipper is paying $3,600 to move the same load, the broker at a 12% margin is now getting $432.

The the pricing, cost structures and margins are very different for both the trucker and the broker. But many of my clients are doing both and it's important for then to know how to deal with bids, margins and inflation, etc. in which ever case they are dealing with.

Freight Broker Tools and Techniques .....

You will learn and apply new tools for doing business when you become a freight broker. You will want to master these new tools.

Take, for example, the skill of "analysis" and using it as a tool to monitor and evaluate your progress. You will monitor and evaluate your shipper customers, your carriers and your lane activity.

In our training, we go into depth on these skills and tools.

For shippers, you will record, monitor and evaluate profit margins, accounts receivable collections and the number of loads you are getting, etc.

For carriers, you will record, monitor and evaluate on-time pick-ups and deliveries, how well the driver follows instructions and driver communications, etc.

For your lanes, you will record, monitor and evaluate how many trucks are available when and where you want them, what kinds of rates are you getting and what is the truck to load ratio, etc.

You are doing more than moving cargo, you are a lean, mean analytic machine - we will show you how.

Go here: http://www.atexfreightbrokertraining.com

Silver Bullets

Many Brokers and Agents are always looking for the silver bullet. They are seeking some fast and easy way to either find loads or find trucks. There may not be a silver bullet. And if there was, who ever had it would not be likely to share it.

When it comes to your searches you DO want to try new avenues. You want to be open and creative.

But more often than not, you just need to find something that works just a little bit and then keep pounding. Many individuals give up too soon.

You want to outlast your competition and sometimes it is not all that difficult because so many are just giving up too soon.

Freight Broker Benchmarks

Years ago, I spent a lot of time analyzing stocks. At one time, I had over 40 specific items that I looked at to try and identify a stock that was on its way up. Out of the 40 or so items, I narrowed my focus to probably about fifteen.

These important items were benchmarks against which I analyzed the stock in its historic framework and I also compared a company's benchmarks with other companies in the same industry. The time and effort paid off.

Nearly every successful business owner has his or her focal points or benchmarks that are used to determine how they are progressing. The gross profit margin is one of the four benchmarks that, in my opinion, is important.

The gross profit margin is a percentage of what profit you have after you pay the truck divided by what the shipper is paying. Thus, if the shipper is paying you $1,500 for a load and if you have a $225 profit after paying the truck, your profit margin is 15% ($225/$1,500).

We go into detail on these and other benchmarks in our training. Further, we have benchmarks to evaluate truckers as well.

If you don't have benchmarks to monitor your progress, you are just winging it. To learn more about the various training programs, click here to see some of the topics that are covered: http://www.atexfreightbrokertraining.com/programtopics0905.shtml

Lin Me Your Ear for a Second

I don't normally follow professional basketball (but I am an avid NCAA fan). Nevertheless, can anyone ignore what is going on with the Jeremy Lin thing and the New York Knicks?

This guy is a modern day sensation in the extreme.

Here is my take on it - Jeremy is probably a foot and a half (or more) shorter than his co-players. Other than that, the most striking impression is his shear, undaunted boldness in his performance.

He knows how to execute! He is definitely "in a zone". But he has been in a zone for seven games and there seems to be no end in sight. Many players get into their zone for a few minutes or maybe during a particular game.

But Jeremy goes on and on.

I sometimes like to compare business with war and sports.

All of these need to be conducted with decisiveness, agressive action and, above all, perfected execution.

If you haven't experienced these, get into a business and find out what it's all about. Go here to learn more: www.atexfreightbrokertraining.com

Are You Easily Influenced?

You will hear some negative comments from time to time while working with shippers and carriers. If you are like me, you might be influenced at times.

For example, when I hear someone make a negative comment about a restaurant, I tend to avoid that particular restaurant. Is this wise? Not really.

Another example, when I was brokering, I'd get negative comments about "rip-off" brokers or bad destinations with no back hauls. And so on and so on.

What do you do and how do you overcome this?

You don't just ignore these. And you don't blindly believe these.

In my training, we go into more detail on these issue moreso that what can be revealed in this blog post.

But, just ask yourself - are you easily influenced? Or, do you respone in better ways?

Which Freight Broker Skills Do You Possess?

Freight brokering does NOT require a lot of formal education. However, a broker does need to develop and hone several skills.

Order my free eBook, "7 Skills of Highly Effective Freight Brokers" by going here: http://www.atexfreightbrokerhomestudy.com

Just enter your name and email address. Immediate download available.

Freight Brokers and Truckers

There are several important points that need to be made concerning freight brokers and truckers.

First, many truckers think that just because they are in trucking, they can easily become a freight broker. While this may be true for some, it is not industry-wide. Trucking and freight brokering are related in some ways; but in others, trucking and freight brokering are completely different.

Every so often a trucker will call me and say, "John, I have been in trucking for 15 years and deal with freight brokers. But I really don't know what they do or how they go about their business".

The smart truckers who want to supplement their trucking business by becoming a freight broker realize that they will have to learn some new stuff.

Second, as a freight broker, getting customers is one thing; finding trucks is another. Truck capacity is low. It is sometimes hard to find a truck when you want them and where you want them.

Smart freight brokers will put as much time and effort in locating available trucks as they do in finding customers. The best way to attract trucks, of course, is to offer loads that pay well. Many, if not most, truckers will go anywhere if they are getting good rates.

So, find good paying loads, yes. But strike out in other ways to get set up with as many truckers as you can.

Check out the follow article to learn how freight brokers work proactively. Go to: http://atexfrei.ipower.com/proactive.shtml

 

Who Asks The Questions?

Generally when you approach a potential customer for work, you would expect them to ask a lot of questions. Afterall, why would they want to do business with you if they don't know you.

For example, when you go shopping for a big item, you may have many questions to ask the seller or vendor. You want to make sure you are getting what you want.

But is it the same in freight brokering?

Actually, No. You, as a freight broker will be asking the shipper a lot of questions. Here is what is important about this. If you do not ask good questions, you will come across as being a wanna be at best or a dunce at worse. Shippers will have you fingered in just a few seconds if you start out wrong.

Asking intelligent questions of your shipper will mark you as a professional. We go into considerable detail on these questions in our training.