Why Do Big Trucking Companies Broker Out Some Loads?

Years ago, I was dispatched a load that my employer booked through a large carrier. I was 350 miles from home on a Friday morning. That load was my ticket to dinner with the family. BUT NO! That load of scrap-paper bales was already on a trailer. Somehow, the weight of the scrap and the forklift collapsed through the trailer floor in the loading process.

I sat hours waiting for those bales to be painstakingly unloaded, then reloaded onto my trailer. Why would a trucking company with hundreds, or thousands of trucks, post freight on load boards? There must be something wrong with that load. Right? Think again.

There are several very good reasons a trucking company would broker a portion of their contract freight, and why you just might want it. Whether it’s live-load or power only, it’s a smart move on the company’s part. But what do I know?

I decided to search for an expert on the subject, but it had to be someone with experience, and someone I knew I could trust. I was fortunate to spend some time with Nick Skeen, the man in charge of pretty much all things broker-related for Paper Transport Inc. He has a long track record of doing what he does and doing it well.

I also have more trust in Paper Transport than any other company. After all, I’ve been there as a driver for over 5 years. To be absolutely clear, there’s no sponsorship or money changing hands for this post. I’m just doing my best to bring you the most accurate information I can find on the topic from someone I can trust. I think you’ll enjoy our conversation in the podcast.

Keep More Of The Customer’s Business

If you can’t move more of the freight offered by your customer, at least you can have some control of it. One of the greatest reasons is simply to be able to take more offered truckloads from an existing customer. Should the shipper have an expanding need, the trucking company can help immediately. The shortest path to expanded capacity could be to broker a percentage of the loads. Buying new trucks and trailers could take months, even a year or more. By using brokered contractors, the capacity fits the need.

Hedging Bets On A Market Downturn

The economy is cyclical. It goes up and down, often taking the availability of freight with it. Having a percentage of your freight brokered could prevent a company from laying off drivers and parking trucks. Rather than parking assets like trucks and trailers, just broker out less freight.

The company also has less exposure to unemployment costs.

Cover Lanes They Usually Don’t Service

I was on the trucking side of this example several years ago. The 25-truck company served the Midwest and the southern states. This assured that all drivers were home every weekend. When a long-time customer needed regular truckload shipments to California, the company handled the loads by brokering them out. This gave the company several advantages.

  •  Maintain a higher level of control with the customer.
  • Evaluate the lanes involved to decide if they wanted to expand.
  • Once they did start taking the runs in-house, the company was able to purchase trailers with unique options that served the customer more efficiently.
  • Offer a few west-coast runs to the drivers who wanted them.

Seriously, the loads had a few unique challenges due to California Bridge-Scale regulations. They also required some hands-on help in the unloading process. The company found a solution that allowed them to ship more goods per truckload and offered them to drivers who actually wanted them.

Readjusting Assets

If a large carrier has 1,500 trucks, they probably also have well over 4,000 trailers. Multiply that by 10 if they have 15,000 trucks. There are times when several trailers need to be relocated to serve other accounts or lanes. These power-only moves have certain advantages. There are several ways a carrier can handle this.

  • A preloaded trailer, or scheduled load/unload.
  • An empty trailer needs to be delivered empty, but you can book your own load.
  • An empty trailer to deadhead to a new location.

Each of these scenarios has its advantages and drawbacks, mostly depending on the shipping lane, length of haul, and how bad they need the trailer.

The thing to remember in this example is the goal for the trucking company is to relocate assets. You could be able to take advantage of that.

Should Owner Operators Take Brokered Loads From Large Carriers?

The bottom line is always the math, but it certainly has the possibility of a win/win since the middleman is cut out of the equation.

Like the big brokers, the carrier brokerage wants to serve the customer and turn a profit. But the carrier is looking at a much bigger picture than just turning a buck on that single load. Again, use this to your advantage.

You might also find you can build better long-term relationships with the carrier agent than you could with a lot of traditional brokers.

Are Large Trucking Company Load boards A Good Source For Truckloads?

Several large trucking companies do have their own load boards, and they are free to use. Like I mentioned earlier, it all boils down to the rate, but these load boards can also be a good resource for freight. Landstar, JB Hunt and several others offer loads this way. All the above will still hold for these company boards, but since they’re such large companies, they will have a larger scale.

How To Know If These Loads Are Competitive Compared To Other Loads?

Quick Disclosure Here. I have an affiliate relationship with DAT. This means The Trucking Podcast receives a commission should you become a paid subscriber through these links. It helps us produce more content, and it doesn’t cost you anything extra.

Whether you’re a mega-carrier or a one truck sole-proprietor, data is king. Any company offering loads will have access to the latest in lane rates, fuel prices, load to truck ratios, and everything else they need. You should have access to the same. You’ll also want a good load board service to find the rest of your freight.

This is why you still need a quality load board like DAT Power or Trucker’s Edge. With 4 plans to choose from, you decide how much data you need. You’ll find the same loads on each offering, but the additional information like lane averages, tri-haul services, broker reviews and credit scores, even broker days to pay, are all designed to help you make the most educated choice on every truckload.

You can sign up for a 30-day trial of any of these plans by following these links.

I do want to thank Nick for taking time out of his day to shed some light on the subject. I have to say, Paper Transport has been a class act as far as an employer goes. I have no doubt they show the same integrity in everything else they do. Just follow the link for more information.

*Featured Image by Photo by Elevate on Unsplash

 

 

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