The mystery of load brokering
There are currently over 17,000 registered freight brokers according to the FMCSA. By definition, a Freight Broker, is a person or entity that arranges the transportation of cargo on behalf of a shipping customer. Shippers are used to getting lanes quoted before hand, and in order for the quote to be financially beneficial for the broker certain margins must be included to ensure that loads are arranged with profit.
The Freight industry fluctuates based on supply and demand, brokers play the "average game" to ensure that they continue to make profit regardless of the weather conditions, spot pricing fluctuations, seasonal demand and other outside factors. Also, In order for brokers to maximize revenue, they will aggressively negotiate rates with carriers. This will result in lower pay for carriers and a higher commission percentage for brokers.
As a result, when shippers are invoiced for freight, they do not actually know the actual commission charged by brokers, and how much carriers actually got paid in order to move their freight. I have yet to see a single detailed invoice demonstrating a breakdown of charges issues by any broker/3PL company.
EVERYONE HATES BROKER It is not a secret that brokers are not liked by the carrier community. Visit any online trucking forum and you will find numerous posts touching on this very subject. It is simply not fair that the person or entity that actually perform the job (The carrier) should be paid lower than the fair going rate for a lane, only for brokers to make higher margins.
FreightOn is now working with shippers and carriers alike to demonstrate full pricing transparency. Instead of charging a flat rate for lanes, we now work together with both parties (shippers and carriers) to reach the best spot pricing for moving freight, and charging a flat commission ensuring that carriers are well compensated for the job, and shippers enjoy lower pricing with the guaranteed quality that FreightOn is reputable for.
See how FreightOn can help you today save on shipments, and for once know that your money is being spent in the right place.