I'm a big fan of the TV series "Narcos". In one episode, Pacho Herrera of the Cali cartel (that guy in the photo) explains to his Mexican counterpart the problem with the business. "Cocaine is fast. Cash is slow" (Bear with me, there's an announcement coming. 🧐) His problem was the logistics. A kilo of cocaine was easy to move. But for every kilo, there was a mountain of heavy banknotes to move back to Colombia. For the Mexican intermediary, this caused a delay in getting paid and a cash-flow squeeze. Freight brokers have a similar problem. No, not one that will put them behind bars for the rest of their lives 🤪 Carriers will pick up your shipper's load tomorrow. They'll move it fast. But they then expect to be paid in maybe 7 or 14 days. If your authority is brand new, they might even want cash up front. Your shipper, on the other hand, will take their time and pay you in 30, 45 or even 60 days. This is a hard, hard fact about brokering. It's immovable and unchangeable, and one of the reasons brokers charge the margins they do. Over-simplified calculation: 20 loads a week at $2300 per load to the shipper and $2000 to the carrier means a profit margin of $300 per load and $ 6,000 per week, or $24,000 per month. All good? Not quite. I pay carriers net 7 and my average shipper pays in net 30. I have a 23-day gap during which I have to carry the receivables. In week1 , no cash moves, but in week 2, I have to start paying the carriers. $40,000. In week 3, another $40,000 and another $40k. Only in week 4 does cash finally start coming in from the shippers. By this stage there is a hole in my bank account of over $130,000! Because I've got to keep paying carriers, it only comes down slowly. Missed payments to shippers will get you a bad reputation faster than cockroaches in your kitchen. **Brokers without a float can go out of business as a result of their own success.** This is why most brokers use factoring. Factors pay you an advance on your invoices, so you can pay your shippers on time.

Hey everyone! My name is Shandra from eastern North Carolina. I currently work in the medical field, 😷 but I am so ready to transition from medical to Freight Brokering. 🚚 I have not pets, but my brother's family has a Boston Terrier mixed with Pitt Bull name "Blueberry" aka "Blue" 🐕‍🦺🫐💙who I love!

Where you from? What you do? Tell us about your pets? What's the worst thing you've ever done? (There's some free stuff in the Classroom, but you have to get to level 1. To get to level 1, just say "hello"!)