The standard MO for many brokers is to get a customer’s load at low–and unsustainable–rates, and then try to cover the load at that rate by haggling with carriers. If it can’t be done, broker can give back the load or take a loss on it. The hope is to hook that customer for future–and profitable–loads. Big brokers with the financial power can do that in a big scale, by taking on long-term contracts, get the market share, and somehow work back into more profitable contracts in the future or make it back somewhere else.
This is not surprising since this is the nature of the beast. What we want to point out is that other companies in the digital load matching space which purportedly are using technology to eliminate brokers are doing nothing of the sort. In reality, they are just another broker with a veneer of technology doing the same bait and switch dance. For example, from multiple reliable sources (ex-employees, carriers and shippers) of one such startup, it goes to a large shipper and gets a contract with a rate that’s too good to be true. When it tries to increase that rate later, surprise!, load volume drops sharply. In one case, 7 to 1. But it goes to new accounts and can show top-line growth. On that strategy, it just received $40 million in venture capital.
This is like credit card company offering you 0% interest rate without telling you it’s a special intro rate for 12 months. Then you get 17% interest on the 13th month, and cancels. So basically brokers play the customer churn game, and I am guessing many savvy shippers are playing the same game, keep on getting special 0% deals with as many vendors as possible.
We at LoadExpress is expressly against this industry practice. We want to bring total price and process transparency to the market, where carriers and shippers deal directly without a broker in the middle controlling the action for this benefit. Our auction model is the most efficient and fair–in the sense that the market is fair. And we have the technology to back it up. Visit our site, request a demo or whitepaper, or just sign up. Takes only a few minutes.