Trucking industry is going trough a lot of changes and despite there is a lot of them some of them are really good and needed to wake up this sleeping giant. Unfortunately some changes are not that good and most of the trucking companies don’t like them.
This is especially a case with the newly services introduced by brokers where they would just (in some cases) 30 minutes before pick up cancel your load without any explanation. This is not how good partnerships are developed and I truly believe that brokers and carriers should be partners but lately we are witnesses of this one way partnerships.
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Load canceling present a huge problem in the US trucking industry and over the last few months the problem just seem to explode and that bad practice that a lot of brokers are doing every day seems to start become a normal way of doing business.
In most of my articles I used to say that brokers present a huge problem for the trucking industry and present the real threat to the trucking industry profits and they seem to jeopardize the trucking companies. Simply the role as middle man they have now is making no one happy and they seem to take money from both sides – the ones that carry the load and other that need load to be carried.
And now the brokers introduced us with the newest product and service they were able to come up on the market – Load Canceling.
What would they usually do is that they would arrange the load with you, provide you all the required papers, give you all pick up and deliver information and they would send you the confirmation papers. You plan your trucks and dispatch departments plans their trips and you send them for the pickup but once of a sudden you receive a call from broker that your load has been canceled.
You are in a light state of shock because you planned your activities according to that load, you have sent the truck there and drove out of route miles, driver drove those miles, you lose time plus fuel and a lot of other things but hey, they don’t care your load just get canceled.
Now you are in a big problem because you need to cover that truck again to avoid loosing even more money and if it is afternoon your chances to cover the truck and to find a good load are close to zero. So you basically have few hundred $ direct cost plus up to few thousands of $ indirect cost depending the load price you lost.
Load Canceling happens in most cases because of the money. Brokers simply want to make more money and that is the reason your load gets canceled. They found someone who will do it for less money than they agreed with you.
It is very bad practice from the brokers side especially if you know that over the last 6 months a lot of trucking companies went out of the business and that trucking went trough a rough winter and occurred a small crisis.
Usually when they get you a load they would quit asking other companies to get a quote from them. But not now anymore, despite covering that load with you they continue to ask other companies for a quote and they want to get better price. Since the market is going trough the rough time there is always near to bankrupt trucking company that will take the load for ridiculously low price.
This way brokers make a bit more money and they are happy. I know for a fact that this happens in some cases up to 50% per day. Literally every second load gets canceled in some days making trucking companies, dispatchers and drivers really frustrated.
Also I need to say that in some cases it is not only brokers to blame there is some situations where trucking companies cancel the load to them and that is also a situation where they loose a lot of money but this articles is not about that.
Usually the broker will pay the cancelation fee to you but I’d also like to warn you that there is still a lot of brokers on the market that will not do that so please be aware and maybe it would be good for you to focus on the good and trusted brokers that have been in business for a long period of time. The fee you can expect to get from broker is usually $150 which is not even close enough to cover the costs.
If the broker pays you the cancelation fee there is a great chance that this wont be enough for you to cover even the direct costs related to the loss of load. Direct cost would just be the ones that include the following:
More important and much bigger cost that this are the cost that are not very visible directly. We can call them the money you missed to earn and we can also measure those amounts in thousands of dollars. Those indirect costs would be:
This is a good question and the answer is very hard to find. It is simply very hard to predict which load will be canceled especially since I know personally that some trucking companies haven’t made any change it the way they run business and still in the last 6 months load cancelation rate jumped from 10% to 50% per day.
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