Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EDT. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.
In this edition: Comparing freight broker commission rates; Stopping corn at the border; and some C-suite shuffling.
Not every commission is created equal. College graduation season is over and that brings a new flock of freight brokers — those who have graduated, might not know anything about the freight market but know they need a job. Supply chain will claim those who “weren’t interested” or were “just doing it for a little bit till I figure out what I want to do.” Eventually it gets us all.
New brokers might be wondering if their commission split is fair or if they’re getting the short end of the stick. Even as a rookie, you gotta make sure you’re getting the league minimum. Most of the new brokers will fall into a W-2 freight broker. The kinds that live at C.H. Robinson, TQL, etc. The average W-2 freight broker can expect a commission of 10%-16% depending on the region, per the FreightWaves Freight Broker Compensation Survey. The highest are in Oklahoma, Arkansas, Texas and Louisiana. In Arkansas, home of Walmart and literally all freight offices, brokers are earning an average 17% commission on top of a yearly salary of $44,000.
While the earning potential for new brokers is substantially better than that of most other entry-level jobs, it’s important to know what good commission rates are and when you need to know your worth. That’s especially vital because if you search “average freight broker commission” on Google, the internet seems to think it’s 50%-70%, which is more the agent pay scale than a more common W-2 employee.
It’s corn! The big lump with knobs is causing a little bit of chaos at the border. Harvest season is in full swing in the South, meaning there will be millions of pounds of fresh fruit and vegetables traversing the U.S.-Mexico border. However, it appears corn this year will stay stateside.
Mexico has decided that all genetically modified corn from the U.S. shall not pass into Mexico. Mexican President Andres Manuel Lopez Obrador has decided to not allow any genetically modified food into the country and to eliminate the use of the herbicide glyphosate (Roundup). This decision is anticipated to have severe effects on farmers in the Midwest. Poor Iowa. So much corn, so few places to take it.
(SONAR Tickers: ITRI.PHL, OTRI.PHL)
Market Check. The big news from Sunday came out of Philadelphia. A section of Interstate 95 collapsed, bringing traffic heading directly into the heart of the city to a standstill. A tanker truck caught fire and the fire caused the interstate to collapse. Traffic is still closed in both directions as the damage is assessed on other roadways. As for now traffic can still flow through the area, but allow for extra delays as drivers have to take alternate routes, especially heading into the city of Philadelphia.
All that said, inbound and outbound tender rejections in the City of Brotherly Love haven’t seen a spike as a result of the accident — yet. While the market might not be dramatically affected so far, advise drivers to take alternate routes early to avoid the delays and work with them on any delays to receivers or shippers. As of now there is no timeline as to when the interstate will be operational again.
Who’s with whom? Ford has done some talent swapping. With a former exec hopping over to C.H. Robinson, Ford Motor Co. has appointed former General Motors and Whirlpool exec Liz Door as chief supply chain officer. Starting June 12, Door will be taking duties that John Lawler, Ford’s CFO, is currently handling.
According to Ford’s press release, “Door’s appointment comes as the automaker focuses on improving quality and reducing costs through its supply chain as part of a transformation plan known as Ford+. The strategy’s core initiatives will offer revamped products and services, including software, EVs and commercial vehicles.”
Leaving the lakes of Michigan to head south, 3PL RK Logistics announced there is a new office coming to Scottsdale, Arizona. No doubt the increase in businesses looking to set up manufacturing in Arizona and the increased cross-border volume were driving forces behind this decision. With LG opening a multibillion-dollar facility outside Phoenix, it’s only the beginning of growth coming to Arizona. There is no doubt this will become a more common thing among 3PLs.
Double broker red flags
Double broker red flag No. 4: Not every truck is created equal
I mean, intentionally trying to get an inspection is a bold strategy. It is a solid workaround to bypass some brokers’ guidelines and rules to not give freight to carriers with no inspections. If you do come across something like this, don’t listen to the double broker. Please report them. But most importantly, use the resources at your disposal if anything seems too good to be true when onboarding a potential carrier.
Got any favorite tips? Let me know or post on LinkedIn. I’d love to share them with everyone.
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