How to Contract with Brokers
In this blog post you will learn what's needed as a truck driver to contract a load through a broker.
You find the "perfect" load on a load board. You call the number and reach the broker and the information starts to flow.
When discussing the rate, try to get the broker to tell you the offer rate. In many cases you will be ready to accept $1.74 or whatever the spot rate is, but the broker will quote something higher, which you should jump on. I was once pleasantly surprised with a $2.80 per mile load that was offered.
You negotiate the load rate and settle on a rate. So what happens next?
Once you and the broker agree that you will haul a load for a certain rate, the broker becomes your customer and a Broker-Carrier contract will need to be signed if you have never hauled for that broker. The broker will email the contract to you to fill in and sign.
In addition to signing the contract, you will need to request that your insurance provider add the broker as a certificate holder as a loss payee for any loads you haul for that broker.
You will also complete a Carrier Profile that includes information about your business, such as your address, Employer ID Number (EIN), Motor Carrier number, and equipment information.
You will also be required to provide an IRS Form W-9, which the broker uses to report to the IRS income paid to you.
To save time, I maintain a signed PDF copy of the W-9 in a computer file labeled "Broker Requirements" that I can attach to an email whenever this is requested. In this folder I also maintain a copy of a voided bank check, a copy of an insurance certificate, and my MC Authority letter. I will discuss more about this in a Getting Organized blog.
Once you have emailed all this information to the broker, they will enter you into their system and you can haul loads for them. This is a one-time process for each broker you haul loads for.
The broker will then send a Rate Confirmation sheet that has the agreed upon rate for the load, which you will review, sign, and return.
I currently have about 25 brokers that I haul loads for. Many brokers have their own load board which is the first place their loads are posted. If none of their approved carriers request the load, then the load gets posted to comprehensive load boards, such as Truckers Edge, for any truck driver to bid on.
When I go to a broker's internal load board I also have Truckers Edge open in another tab. I do this because brokers typically do not post an offer rate for their loads. So if I find a load to a destination that I am interested in, I will use the Market Rate tool in Truckers Edge to plug in the origin and destination of the broker's load to get the spot rate for that lane.
Again, if the average spot rate is $1.74 per mile or better, then I will call the broker and try to get the load for $1.74 or better.
Don't leave money on the table. Unless the offer is really juicy, if the broker offers $1.74 or the spot rate, always ask for $50 higher on loads under $2,000 or $100 higher on loads more than $2,000. 80% of the time the broker will agree.
If you haven't read my post on how to determine a good load rate, click this link: What's A Good Load Rate.
-May the wind be at your six and weigh stations closed.