The battle between 3PLs & LTL carriers fascinates me.. One of my burning questions to God when I get to the gates- “Did the LTL carriers secretly hate us brokers?” 👉3PL company does a lot of business negotiating competitive LTL tariffs with the FedEx’s & Saia’s of the world.. (I’m not targeting them specifically. Just using them as LTL carrier examples.) They give those carriers massive volume through their customers. 👉Me (The 3PL sales rep): Busts my butt & lands a bunch of LTL shipping customers.. Gives them great rates & service. 👉LTL sales rep (Working directly for the LTL carrier): Walks into my customer’s facility.. Tries to schmooze them & says, “Why don’t you just stop using your broker? Come to me & I will give you even BETTER pricing shipping direct.” 😳🧐 👉Now if I as the broker coldcalled a shipper & they said, “Sorry, we already have an account with (insert whatever LTL carrier name)” - If I knew our 3PL had a direct contract with that carrier too, I immediately backed off. Because we have a contract with that carrier. 👉Customer calls me wanting an ETA. I call into dispatch & I am put on hold for 30+ minutes or given a vague answer or flat out lie. “Driver was already there. Told no freight. There’ll be a charge for that.” *Click* hangs up on me. 👉I call & tell the customer what dispatch said. 👉20 minutes later customer calls me back, “Driver just showed up. I talked to him & he said dispatch never called him to request an update.” 🤨 Now I know not ALL direct carrier national sales reps behave this way… but I can count at least 6 times this happened with various carriers when I was a broker… Put me out of my misery folks! I need to know… Do the sales reps & dispatchers working directly for the LTL carriers lowkey despise the 3PL brokers they partner with? 😅 #LTL #Carrier #3PL #Sales #Contracts #Logistics
It’s not that the carriers hate the brokers. It is more often that not that brokers do not dig deeper into what the carriers have to offer in particular service areas past rates. I head up the 3PL vertical now for a Regional LTL carrier after spending 15 years in brokerage, and one common theme I am hearing is “you have to have competitive rates” without specifics around it. Or…”our customers control their carriers”. Do they not do analysis on your carrier base for your clients and advise them where carrier strengths are? You may save $2 on each order using X carrier over Y carrier…but are you considering things like ease of communication? Service levels? Claim percentages? Technology offering? Etc. Etc. I dealt directly with carriers my entire career and there are points where you can save money but I would rather have ease of mind for a few more dollars if I know a carrier is strong in that area (Regional Carrier over National Carrier in a Regional lane). We, as LTL carriers, want to create density in our pickup and delivery areas so we can be as efficient as possible. So help carriers do that. Don’t just show up in an email when a carrier misses a pickup…be a partner and advocate for carriers to your clients.✌🏼
Problem is, the local LTL Account Reps/Executives are not the ones that the 3 pl partnered with. There is no partnership with any of them. It's all about pricing. The 3PL most likely works with a Corporate Account Rep or an Enterprise Account rep. The local account rep working for the LTL carrier most likely had nothing to do with setting up any of the brokers. The last two LTL Carriers I worked for catered to all of the brokers and the Account Reps were left to go after scraps. The 3 PLs and brokers constantly call customer service , tie up the phones and the CSR's time, so when my own customers would call for customer service, many times they weren't able to get through. I couldn't get as good of pricing as the brokers had, so when I did land an LTL account and a broker came in after me, the customer would always call me and ask why I couldn't give them the same pricing the broker was giving them....talk about frustrating. I gave up and hope to the highest power on earth I am never forced to go back. Now you know why I'm an Agent...I got tired of fighting the losing battle.
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This happens with neither salesperson knows how to sell. The 3PL reps sells "Rates" and the LTL reps says "you can get them better from me," If the 3PL rep really wraps their arms around the business, implements automation, integrates with their systems and processes, and ultimately provides the same level of value across multiple carriers - the LTL rep can't compete in that since they only represent the one carrier. But when the 3PL rep sells their 3PL service as if they are the LTL provider, they aren't providing any value and any rep can take that business.
The LTL carrier don't hate brokers but they prefer going direct to the customer obviously. However, when shipping managers do go direct to some of the LTL carriers, these LTL carriers do not offer rates worthwhile to ship direct, "you don't have enough volume for my manager to approve me to give you the rates you need" so some companies choose to give their LTL shipments to a broker. If I ran an LTL company, I'd focus on certain lanes, create pallet rates, wouldn't add a reweight fee of $100 for a pallet 100 lbs over, and help businesses ship their products direct with us to help them with their business.
That is rough, sounds like a ltl provider you would not use again.There are, however, ways to make it harder for your compition to do something this in the future. Check out our website for some ideas
As someone that has been on both sides, the relationships have gotten much better. In my LTL days as a TM, we had a sales team. Their job was to grow revenue. Most carrier reluctantly did business with 3PLs. Things loosened up as carriers recognized that 3Pls offered their clients more than rates. You always take a chance when you bring a vendor into your clients unless you have a good relationship with both and there is trust.
Freight Scientist 👨🏻🔬| Daily Grinder💪🏼😤 | Your Favorite Chicago Service Provider Turned Shipper 🤔
3moThe main problem is Brokers think they own the Customer… I’m a Chicago native, I’ve worked with more than half the reefer community OTR since I started. Brokered for over a decade before becoming a shipper in the Chicagoland area… Do you know I have freight that moves with family friends but I CANT back door the broker and get the bro discount from a 13 year relationship… ^^ I would hate a broker too (I do broker in-house for my company but I would never tell a my customer who they can and cannot use because I had em first). If my service is better ( I’m confident in my work ethic and service to the customer), they’ll be back wanting me to take the operation again. 😎