PPRuNe Forums - View Single Post - Charter Brokers - When living without them????
Old 29th Sep 2009, 04:44
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asdf1234
 
Join Date: Jun 2009
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We have a charter broker operation and I can't agree with all you say about brokers because we do add value to the business by providing an operator with routes to market thay may not have thought about and an increasing awareness of their product within certain niche markets.

That said I do feel that 20% is an outrageously high margin for the local broker. For the operator/broker relationship to work both must accept that they need the other in order to exist and that as a result both must earn a reward for the service they offer. If one is taking all the reward to the detriment of the other then the market will eventaully fail.

So what to do? (I assume that is the question behind your post). I suggest fighting back by finding your own broker with knowledge of your local market. Agree with them a set rate per hour that gives you a reasonable return on your investment. To incentivise them agree that any hours sold in excess of a pre-determined monthly rate will lead to the excess hours being charged at a slightly lower rate. Agree that the broker cannot over-price your product. It would be sensible that during this economic downturn that the profit margin for the broker reflects the level of demand. Agree what this profit will be beforehand and agree open book accounting. Finally agree that the broker will have first call upon your fleet. And agree this over the medium term - do not see it as a short term measure to get you out of the recession. If you commit to your broker they will commit to you, good times and bad. This is what we offer our operators and they see sense in it.

Hope this helps.
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