Supply Chain Optimization

Shippers Hate ’Em But We Need ’Em (Now)

 

Most shippers really do hate brokers.  They are the supplier of last resort. The trucks vary in quality, and the performance is perceived as being of lesser quality.  (Is this perception or reality?)  But we need brokers as they are the information conduit from the 97% of all over-the-road fleets that have 20 trucks or less.  Brokers hold all the information about who needs equipment and who has it and hence, hold all the power. This enables their margins to be quite healthy.

 
In the airline business, more than 90% of passenger revenue comes from just five major airlines.  In the brokerage business, the top 20% of brokers represent about 4% of the total volume.  But long-term they need to worry.  While information is power, the Uber-ization of trucking can grab that data, and the advantage is lost.