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TRUCK CARGO BROKERING A Presentation by: Katrina R. Deloach 6/6/22 MGT 309-Introduction to Logistics Saint Leo University Fort Lee Center

Truck Cargo Brokering

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Page 1: Truck Cargo Brokering

TRUCK CARGO BROKERING

A Presentation by:

Katrina R. DeloachApril 7, 2023

MGT 309-Introduction to Logistics

Saint Leo UniversityFort Lee Center

Page 2: Truck Cargo Brokering

ELEMENTS OF TRUCK CARGO BROKERING?

Involves the use of a licensed company who ships goods belonging to someone else that are arranged by a broker

Hired by outside carriers for the actual transportation of goods

Broker does not assume responsibility or take possession of cargo

Certain fees are collected from both the shippers and the truckers

Page 3: Truck Cargo Brokering

ADVANTAGES / DISADVANTAGES OF TRUCK CARGO BROKERING

Advantages: Help optimize fleet usage/profits Increase revenue per mile-through reduction of empty backhaul milesDisadvantages: Brokers reap most of the benefits Reinforces directional imbalances

Page 4: Truck Cargo Brokering

DIRECTIONAL IMBALANCES… Directional Imbalance is a divergence between

inbound and outbound traffic, which usually results in different freight rates

Directional imbalance in trade between countries implies that many carriers are forced to haul empty containers back, which will make the costs of shipping in one direction higher

Page 5: Truck Cargo Brokering

DIRECTIONAL IMBALANCES CON’T

The effect of carriers' transport costs on freight prices depends on the directional imbalance in transport flows

Directional imbalance occurs in truck cargo brokering when there is a mismatch that happens along the same corridor causing large numbers of empty containers to be shipped back to the source…basically, this means “large surplus of containers at one side and a deficit of containers on another”

Page 6: Truck Cargo Brokering

SHIPPER AND TRUCKER FEES Brokers TL average 10-

20%...LTL over 20% Heavy haul flatbed

ranges between $6,000 - $15,000

Iowa reported IB/OB rates $1.30 - $3.00

Arkansas reported IB/OB rates $2.00 - $3.00

Page 7: Truck Cargo Brokering

DOUBLE BROKERING

Practice of having two agents involved on brokering a shipment.  The first one gives it to the second one, and the second to an end carrier….Is this legal

Double brokering is legal and ethical ONLY if all parties involved are in the “know”

Becomes a problem when trucker has no authority or insurance in the company for which he/she loads

Double brokering of freight has become an all-too-frequent practice, probably due to the truck and driver shortages

Big problem if broker goes out of business…leaving the potential for double-billing

Page 8: Truck Cargo Brokering

BROKERING HIGH VALUE High value loads that are

stolen are usually organized

To avoid such loss…brokering of high value loads must be defined in advance

Shippers of high-value loads should never allow brokerage, or should be certain that the brokering entity is included in the security protocol

Page 9: Truck Cargo Brokering

CHALLENGES BROKERS FACE

Page 10: Truck Cargo Brokering

SUMMARY Truck Cargo Brokering can benefit all parties involved as

long as expectations are communicated Beware of double-brokering, especially where the risk of

the broker going out of business is concerned Brokering high-value loads are a high risk to theft and are

usually organized Directional imbalance occurs when there are a large

surplus of containers at one side and a deficit of containers on another

Shipper/Trucker fees varies depending on the market, type of freight, time of year and other economic factors