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Do You Know When to Hold’em and When to Fold’em?
Rate computations and negotiations entail a lot of mystery in the freight broker business. But you don’t really have to be a gambler – just learn what to expect in negotiations – it’s not all that mysterious.
There are no “set” rates when you are dealing with “spot” rates that are negotiated individually, one at a time. So of course, I’m not talking about “contract” rates that ARE set at least annually.
To succeed in the long term, brokers need to offer rates to trucks that are competitive and that end up being a win-win-win for the broker, the shipper and the carrier.
Supply and demand as well as “urgency” are big factors in rate negotiations.
For the broker, the ideal situation is to have a shipper who is urgent to move their cargo and then find a truck that is urgent to move his truck. This scenario might find the shipper willing to pay more and the carrier to take less.
But many loads are not that urgent for either the shipper or the carrier. That means there may be some serious negotiations going on.
As a freight broker, you are in the middle and it’s up to you to make the deal work. Most of the time you should be able to; other times you won’t.
In my training, we get into rates and what to expect from everyone involved. Brokers need to know what a “good” rate is; they need to know what a “lousy” rate is where they just walk away. So the broker needs to know when to hold’em and when to fold’em when it comes to negotiations.
Check out this short video on rates –