Ghost loads. Bait-and-switch posts with inaccurate origin and destination information. Double brokers. Carriers of last resort with questionable credentials and safety records.
These are just a few of the structural issues that introduce friction into trucking load boards and undermine the integrity of the data derived from them.
Load boards for the trucking spot market were an important innovation decades ago when the trucking industry was changing rapidly in the wake of deregulation. Capacity was fragmenting and there were more small carriers and owner-operators than ever before, creating a need for new marketplaces that allowed many carriers to connect with reaggregated spot volume.
As the freight brokerage industry grew during the first two decades of the 2000s, spot markets became even more important in indicating the direction of the broader market. Spot rates ultimately derived from load board activity and self-reporting began to drive the equity valuations of publicly traded trucking carriers. Yet at the same time, the brokers and carriers transacting in the load boards were developing sophisticated techniques to game the marketplace for their own purposes.
Not only is it not uncommon, but it’s become standard operating procedure at many large brokerages to post loads to multiple load boards to ensure the maximum number of carriers sees it. But brokers rarely take down the postings after the load is covered through one of those boards, leading to “ghost loads” that are posted but unavailable, skewing volume statistics in the board and wasting carriers’ time.
On the other hand, carriers are often not what they seem. The minimal amount of information that most load boards require from their carriers allows deceptive brokers to pose as carriers, who then secretly farm out the freight to yet another — even cheaper — carrier. The double-broker problem has mushroomed into a systemic issue that saps broker productivity, degrades the service shippers experience and helps put unqualified and arguably dangerous carriers on the highway.
But the largest load boards, which charge a fee per posted load, are disincentivized from cleaning up their marketplaces. The load boards are chasing subscriptions and need constant volume growth — or at least the appearance of volume — to keep the carriers engaged in the marketplace.
“The technology hasn’t caught up to the sophistication of the marketplace participants,” said John Tozer, co-founder and COO at Newtrul, a Chicago-based digital freight marketplace. “One of the best examples is Craigslist. It comes in and it’s incredibly convenient, a great way to get information out. People start using it and gaming it, leveraging it to rob people and move stolen goods. The issues are very similar, I think, to some of these digitized marketplaces.”
There are a couple of approaches to tackling load boards. The one that’s probably seen the widest adoption so far is the private freight marketplaces launched by brokerages and 3PLs. In that model, a freight brokerage builds a load board that only carriers it has already onboarded can use — and there might even be a volume or service threshold required to gain access. But private freight marketplaces sacrifice convenience for trust. In each marketplace, carriers are dealing with one broker at a time, and many have to log in to multiple apps or web portals in order to see the volume offered by all the brokers they typically work with.
Newtrul, founded in 2018 by Ed Stockman, who serves as CEO, and Tozer, is taking the other approach: a centralized, reaggregated capacity marketplace that’s nonetheless optimized for integrity and carrier quality by multiple compliance layers. Rather than error- and deceit-ridden manual load postings, Newtrul integrates directly with broker and carrier transportation management systems, pulling not just loads but also important information about carriers, like their active/inactive status and whether they’re on a do-not-use list. Live integrations with compliance partners allow Newtrul to automatically deny access to carriers with lapses in their operating authority or insurance.
“We only invite carriers that have seven customers they’ve passed compliance with,” Tozer said. “A couple of marketplace studies brought us to that number seven. Once you have that type of overlap, while you can’t guarantee anything, there’s a very high confidence that it’s a good carrier. It has the number of assets it says it has [and] they do move freight.”
Tozer explained that while private freight marketplaces appear to be a good deal for brokerages — because they create a captive audience of carriers and streamline the process of connecting to capacity compared to multiple load boards — they don’t work as well as they’re purported to. Sixty-percent of freight brokers’ loads, according to Tozer, are covered with newly set up carriers. It can cost a freight brokerage $100 to set up a new carrier, which decimates net revenue dollars per load, especially in a soft market.
“What we sell to brokers is reutilization of their current network,” Tozer said. “We offer them the trust and convenience they’re looking for in a market place, and that allows them to drive down their own cost to procure capacity.”
Tozer hinted that Newtrul has a plan in the works for an even larger consortium of enterprise shippers, brokers and carriers to help power a platform with higher integrity and credibility than anything else currently available in the trucking industry.
Garfield fisher
simple fix owner apperator need to form a union shutdown all engine for a week if trucks dont move broker don’t get paid too munch under cutting on rates
Robert
Years ago I drove for a small (30 trucks) outfit owned by a guy who paid me about a third. We got a back load that wasn’t paying much and he said it covered my wages and fuel. I volunteered for no pay if he didn’t care about the fuel. I came back empty. The next time I showed up I hauled the same thing for a fair rate. He told me a fairly funny story about that broker, and I was paid as much as hauling TWO cheap loads from the same shipper. We all had a good laugh (except the broker).
C.S.
As long as people keep hauling loads for pennies per mile nothing will change. If you haul for cheap, that’s on you. Eventually it will catch up with you when you don’t have money to pay for maintenance or even your mortgage. Constantly chasing your tail is no way to live. Work smart, not hard. Enjoy life and the fruits of your labor.
Paden Ramey
These comments underscore the problem with the trucking industry as a whole. A fundamental distrust and disdain between all parties. Carriers dislike brokers because they take too much money and often get frustrated with brokers lashing out. Brokers dislike carriers because of the inaccuracy of the information received and often outright lies told to them dying the shipping process. We have a chicken and egg situation. The only way there is going to be any sort of “equitable” solution to the broker carrier relationship is if both parties; A) change their behaviour, acting in good faith and not getting upset and unfortunate situations like breakdowns. Understand people are human B) Start viewing the other party as necessary. Brokers don’t drive trucks, they need carriers. Carriers don’t have the business because it’s not their local market. Untl human beings decide to start trusting strangers who they just met to do a good job then it really doesn’t matter what load board solution you come up with. People will scam, people will lie.
Only work with people you respect and respect you. Once you get outside of that circle, it’s the wild west. This isn’t just trucking, it’s anything you do in life. Plumbers making house calls are a roll of the dice. The same way a carrier might be double brokering a load. The same way a broker might have 4 ghost loads posted.
Jim
I am a small carrier as well, this system is so broke I don’t know if there is any fixing it. All the large brokerage houses are going into the customers and undercutting rates so bad. So what does a broker have to pay for … phone , laptop, office, and some insurances… As a carrier we have substantial costs that not everyone wants, truck costs , insurances , trailer costs, breakdown costs , tire costs , EZpass costs , fuel costs , and we can keep it going. Average operating costs at 2.80 to 3.25 per mile… Everyone is going to to see reality shortly.. And they want to drive down our rates.
Zeb Fullmer
Brokers are crooks and liars plain and simple. Need to get rid of brokers. They make their money buy robbing carriers and taking advantage of shippers plain and simple. They are the culprit in small carriers going out of business in a bad market. Their profit margins increase in a bad location and poor market. They take advantage of places like Arizona where spot rates are usually never good. Charging the shipper 1500$ to go to Southern CA. They pocket 1000$ and pay the carrier 500$ because the carrier has no options because of not much freight and needs to get out of the state. Yes, there are fewer loads out there in this market but brokers’ profit margins increase per load because they are taking advantage of the environment. They are killing off the small carriers and also killing themselves off at the same time.
Bianca hinson
I’m not a truck driver but my husband is and what he go thru is horrible when it comes to these brokers low balling on the load board. An broker suppose to get no more than 10% of a load total invoice. I don’t understand why they taking so much from the drivers when they are not doing the work. It’s hard out here driving with the loads, trying to make good timing to shut down and start up and empty and find another load. The brokers don’t seems to care. They all for themselves and be taking hundreds of dollars and the drivers are stuck with the short end. I don’t think ppl understand truck drivers are the bread and butter of everything we have. The agents are bitting the hand that feed them. I think it over due it time to book loads call for invoice from shipper before going to get the load an to have your own authority you have right to know that much and you make your decisions from there. Truck drivers don’t need the middle man. Make these brokers/agents go out of business. They causing truckers to go out of business.
Chris Robinson
I’ve been a small Carrier for the last seven years.
I’ve ridden this Rollercoaster trucking economy
through more up and down cycles than I care to
remember in only seven years!I’ve worked Direct deals and with alot of brokers.All these next great ideas seem to rain down when freight rates are in the trash.The true cause in my opinion is simple supply and demand economics.There is always a large influx of
truck drivers thinking their business men and women and they fail in the first two years or less,when the market is hot.The same can be said about brokerages.FMCSA and DOT has made it so very easy to obtain an operating authority or a broker authority that anyone can get in the transportation industry,which creates an over capacity problem for carriers and when brokers are fighting among themselves for loads,Freight rates are going to keep falling and the carriers get caught in the middle.
The bottom line is everybody wants to make money and there is not enough to go around.
There is no easy fix to this problem.This is just my opinion.I’m interested in what other small carriers has to say.Thanks