Final answer:
New brokers or agents generally need to take the going rate for shipping services due to the perfect competition nature of the industry. They may offer competitive rates to enter the market and could eventually specialize to compete on factors other than price. Large carriers often have lower rates due to economies of scale and volume discounts.
Step-by-step explanation:
When starting out as a broker or agent, your rates compared to those of a large motor carrier that is working directly with a shipper might be different based on several factors. Initially, given the economics of scale and established reputation, a large carrier may often provide lower rates due to efficiencies in its operations and volume discounts. As a new entrant into the market, you will likely need to take the going rate for shipping services, as the industry has characteristics of perfect competition, where many small operators cannot set prices above the market rate without losing customers. These rates are decided based on the cost inputs such as the price of gasoline, maintenance of vehicles, and insurance rates, which vary depending on factors like the vehicle's safety rating, driving history, age of the driver, and more.
Moreover, as you're building your brand and client base, offering competitive rates can be essential to breaking into the market. Over time, as you optimize your operations and perhaps specialize in certain types of loads or routes, you might be able to offer more competitive rates or even premium services at higher rates. Independent truckers and smaller brokers typically compete on service quality, flexibility, and specialization rather than on price alone against large carriers.