Freight Broker Questions

Jesse's Girl 12

New Member
Hi, everyone! I am finishing up my internship at a chemical plant that uses freight brokers to cover 90% of their shipments and I am working on writing a paper that details my experience and new found knowledge in the manufacturing industry :)

Part of my research is the transportation aspect of the business. I have a few questions I thought this would be the perfect forum for! Pun intended!

1. How do freight brokers calculate their rates? Is this a set percentage, per mile, or does it vary?
2. What percentage would it be? I know it can vary, but even a range would be something I could start with. If it's a per mile rate, how is this calculated?
3. How effective is cold calling? The company I interned for received at least 3 calls/week asking if they needed any freight rates. This particular company already uses 5 brokerages and did not want to "muddy the waters" by involving too many brokers.

Thanks!
 

mndriver

curmudgeon extraordinare
Supporter
We are all driver's or owner operator's here. Not sure we even have a broker on the forum to answer your questions.
 

Brian Junior

Well-Known Member
Hi, everyone! I am finishing up my internship at a chemical plant that uses freight brokers to cover 90% of their shipments and I am working on writing a paper that details my experience and new found knowledge in the manufacturing industry :)

Part of my research is the transportation aspect of the business. I have a few questions I thought this would be the perfect forum for! Pun intended!

1. How do freight brokers calculate their rates? Is this a set percentage, per mile, or does it vary?
2. What percentage would it be? I know it can vary, but even a range would be something I could start with. If it's a per mile rate, how is this calculated?
3. How effective is cold calling? The company I interned for received at least 3 calls/week asking if they needed any freight rates. This particular company already uses 5 brokerages and did not want to "muddy the waters" by involving too many brokers.

Thanks!
1 It all depends on the rates on the market. But usually the rate is about 15-20%. On some loads you can do even more.
2 The rate depends on the situation on the market and the truck availability. The commodity matters too, because for example nobody wants to deal with lumber, and if you load a flatbed for i.e. $3 per mile, you have to pay $4 for the lumber load.
3 Cold calling is pretty effective, but it is 21st century - it is much better to use internet instruments. maybe the apps like doft.com - they give an access to their bases of carriers. Or maybe try to gain testimonies from your satisfied clients...
 

Victory312

New Member
Rates will depend on the type of freight being moved (steel coils vs mac n cheese), frequency of the freight (daily/weekly...how many loads per), and geographic location of the freight (what kind of lane). A good broker will know his markets before hand and can spot quote without even looking at his laptop. Freight from say Houston is quite a bit different then from Sioux Falls. Supply and Demand. Cheers.
 

amandacbirch

New Member
Calculating ground freight rates includes calculating the distance, the loading and unloading time, taxes availability of trucks and many other factors. In fact, you need specific software to accurately calculate the rate of any mode of freight.
 

ironpony

Professional Pot-Stirrer
Supporter
Calculating ground freight rates includes calculating the distance, the loading and unloading time, taxes availability of trucks and many other factors. In fact, you need specific software to accurately calculate the rate of any mode of freight.
Our problem is that many loads are so under-priced that its impossible for us to remain as an economically viable transportation business.
 

Injun

Rabid Squaw
Staff member
Supporter
You can use all the algorithms and computer programs you want to for rate calculation.

The bottom line is, regardless of what your computer tells you, somebody has to agree to your rate offering. If the load isn't getting moved, it's priced too low and you need to increase your rate.
 

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