Quoting, margin and when to walk

Buy, sell, and whose margin

Your buy rate is what you pay for the freight. Your sell rate is what you charge for it. The gap is your margin.

The important subtlety: buy and sell are per party, not per shipment. Rates resell down a chain — a carrier sells to whoever holds the contract, who sells to whoever resells it, who sells to the shipper. One party's sell is the next party's buy, so a single load can carry several buy/sell pairs.

That is why "what is the margin on this load" is an incomplete question. Whose margin?

Pricing methods, and their failure modes

Percentage markup is the default: buy at $400, add 20%, sell at $480. Simple, scales with the shipment, and falls apart at the extremes — 20% on a $2,000 move is a lot to ask, and 20% on an $80 minimum charge does not pay for the phone call.

Flat markup adds a fixed dollar amount. Predictable, protects small shipments, and leaves money behind on large ones.

Most brokers land on both, with a floor and a ceiling: a flat amount plus a percentage, never less than $X, never more than $Y. That is exactly the shape of a well-built markup rule, and it is worth spending time on rather than picking a number and hoping.

What healthy looks like

LTL margins vary enormously by market, but as a rough orientation: high single digits is thin, mid-teens is normal, and anything above about 25% needs a reason — a service you actually provide, a lane nobody else covers, or a customer who values something other than price.

Margin percentage on its own is a poor target. A 30% margin on a $90 shipment is $27, which does not cover the time to quote it, book it, track it, chase the POD and audit the invoice. Some brokers set a minimum dollar margin per shipment for exactly this reason.

Freight worth losing

Not all revenue is good revenue. Some patterns are reliably unprofitable, and recognising them early is a skill worth more than a rate table.

Customers who quote every shipment against four brokers and always take the lowest number are buying a commodity, and someone will always be hungrier than you. Freight that is chronically misdescribed generates a stream of reclass corrections and awkward conversations. Receivers who cannot be delivered to without three attempts eat your margin in redelivery charges. And a customer who does not pay is not a customer, whatever the margin says on paper.

Walking away from freight is a legitimate answer. Saying so plainly — "we are not the cheapest on this lane, and I would rather tell you that than quote you a number I cannot hold" — earns more respect than a race to the bottom.