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HOW BROKERS MAKE MONEY?
You may ask them about this
The broker fee is a fixed amount deducted from the per-unit quote, with the remainder going to the carrier handling the transport. For instance, if the quote is $500 and the broker’s fee is $100, the carrier receives $400. If the quote is $5,000 with the same $100 fee, the carrier gets $4,900. This setup encourages brokers to set fair prices. However, because carrier prices can fluctuate with market conditions and timing, accurate quoting can be challenging, which is why fewer brokers use this method.
Broker fee is collected from the total quote or cost. Example, if you get quoted $1500 or $3000 for the transport, and broker sets a standard 20% fee, then which the broker earns $300 or $600 respectively. Either tacked on to cost of transport or deduced from the quote.
This brokerage fee method is the most common practice and operates on a discretionary basis. The broker or agent provides a quote based on the information gathered from the customer to gauge their ability to pay more or less. This approach, often considered price discrimination, aims to maximize profits. Additionally, brokers may seek out carriers willing to accept the lowest payment for transporting the vehicle, further increasing their profit margins. However, this profit-driven method may not always result in the best carrier services, as it prioritizes profits over customer service.
The broker can offer a smaller deposit as a flat fee and use a percentage or variable system to supplement their revenues. For example, the broker might collect a $100 deposit from the customer to secure the dispatch. In addition, they could earn a percentage of the total shipment cost or request a fixed amount from the carrier. This approach allows the broker to manage their costs while maximizing their earnings based on the overall value of the transaction.
Beware Of Low-Ball Quotes
Possible sign of a "Bait & Switch" tactic. Companies lure you in with significantly lower or unrealistic prices, collect their deposits, all while knowing carriers won't transport your vehicle for that unreasonably low amount. They then dispatch it out to carriers at a higher rate without your authorization, only for you to later realize that the carrier is holding your vehicle hostage asking for more money to release the car at delivery. Ensure the quote includes all services and costs, and remember to verify both the company's and carrier's insurance & licensing. Remember, if a quote seems too good to be true, it likely is. Prioritize transparency & quality service over rock-bottom prices.
Illegal Carrier re-brokering
Rampant! Carriers may deceptively accept shipments and then subcontract them to other carriers without shipper’s knowledge. Such practices are illegal without proper brokerage authority. You risk denial of insurance coverages for stolen or damage in transit, and you wouldn’t even realize it while creating accountability issues & delays. The shipper may face significant frustration and uncertainty due to these covert operations.
ghost trucks
Sadly, this one is very common. Brokers who falsely claim availability of trucks and promise specific pickup dates. Be cautious of brokers promising they have trucks in the area when they do not own any trucks. When the truck fails to show up, customers face significant delays. The brokers may then scramble to find an actual truck, often at a higher cost to a desperate customer.
hidden fees
Companies can add undisclosed fees to the final bill. These hidden charges can include additional costs for insurance, extra fuel surcharges, charge you for leaving your own personal items in your vehicle, or surprise expedited services. Customers are often surprised by the inflated final cost after the service is completed. Please Inquire about their fee structure.
fake Reviews & booking counters
You see a lot of reviews and activity on the bottom of their webpage? There are widgets that do that and it is likely fake. They are there to increase social proof and herd conformity to boost interaction with the agents. Companies use fake reviews to create a false impression of reliability. Positive reviews are fabricated or paid for, misleading customers into trusting unreliable companies. This practice can result in customers experiencing poor service or falling victim to scams. The companies may be real, but the reviews can be fake. For awareness, this statement can be implied to all industries in general.
damage, stolen, lost
Vehicles are damaged or lost during transport, and carriers deny responsibility. Carriers may lack sufficient insurance coverage or refuse to compensate for damages, leaving customers to handle the loss. This can be particularly problematic if the carrier is unlicensed or uninsured. We have knowledge of carriers damaging vehicles, getting them repaired discreetly without the shippers’ or brokerages’ knowledge, and then returning it to customers late and full of excuses, hiding or denying all wrong doing. Carriers and drivers may also attempt to deliver the vehicles late or in the dark, to hide minor damages, an obtain a clean delivery sign off. We have had numerous customers attempted to self-dispatch their vehicle to a popular (unmentioned) load board, and a had unlicensed carriers steal their vehicles.
false guarentees
Brokers and carriers promise guaranteed pickup and delivery dates. Due to the unpredictable nature of transport logistics, these guarantees are often unmet, leading to customer dissatisfaction when deadlines are missed. ALL GUARENTEES are misleading, read the fine print, terms and conditions. Guarentees are whitty phrasing "we show up on time or we owe you a small fee." No one can predict the future, it is wiser to utilize probability of outcome to make our best judgment.
unlicensed operators
Certain brokers and carriers operate without necessary licenses and insurance. Customers are at risk because they have little to no legal recourse if something goes wrong. Unlicensed operators can disappear without fulfilling their commitments. How do they do that? They create Transport companies, obtain official certifications, but operate using multiple under licensed operators and utilizing smaller equipments to hide under the radar.
asking for money upfront
If you do not know the transport company or have not done business with them before, we cannot recommend paying them any deposit without first being offered an available carrier and pickup schedule. Please be cautious. Some brokers demand deposits upfront, both large and small, but fail to deliver the promised service. Some brokers collect these deposits and either fail to secure a carrier or disappear entirely, leaving customers without transportation and out of pocket.
misleading company names
Brokers who use names similar to well-known carriers or transport companies to gain trust engage in deception that leads to confusion and misplaced trust. Customers may believe they are dealing with a reputable company, only to discover they have been scammed or that the service was disappointing.