The reliable transportation of your freight essential is important. But with so many options available for moving a shipment from A to B, finding the best solution for your business can be difficult.
Should you use an asset-based provider that owns the trucks and trailers used to move freight? There are certainly advantages to this (you have direct access to the driver and know exactly who will be picking up your load).
That said, there are also several downsides to working with asset carriers exclusively.
As such, you might also want to consider using a freight brokerage for your next shipment.
Here at Anderson Trucking Service (ATS), our sister brokerage ATS Logistics knows that deciding how to move your freight can be intimidating. With over 30 years' experience as a freight broker, ATS Logistics helps businesses find the best shipping solutions for their needs (even if it's not us!) every day.
In this article, we’ll explain four key elements of freight brokerage so you can decide where a great one fits your supply chain. Let's get started!
What Is a Freight Brokerage?
A freight brokerage serves as the intermediary between the shipper, who needs to move their cargo, and the carrier (trucking company) that has the means to do so. Using a network of these regional, national and international trucking companies, a freight broker is capable of providing the truck and trailer capacity each shipper needs to get their freight out the door and to its destination.
The business of brokering freight is all about relationships. Because of this, the shipper relies on the brokerage’s network of carriers to move their shipment. This process provides convenience for each shipper, saving them the time they’d spend coordinating with and selecting a carrier directly. Instead, any shipment that is routed through a freight brokerage is overseen by that broker from start to finish.
Related: The Ultimate Guide to Freight Brokerage
What Does a Freight Brokerage Do?
Although there are an array of things freight brokerage employees must accomplish each day, the core duties of this transportation service provider are relatively consistent.
The two main duties freight brokerage companies must perform in order to offer this service at the highest level possible are:
- Vet and select reliable carrier partners
- Managing the logistics of each shipment
1. Vetting and Selecting Reliable Carriers
Your freight broker's job starts long before your freight ever leaves your loading dock. This begins with the thorough vetting of their carrier base.
A good freight brokerage understands the value of partnering with high-quality carriers. Integrity and reliability should be on the top of their priority list.
It should be noted that not all freight brokerages (or carriers, for that matter) are consistently high quality and dependable. The careful vetting of carriers is an important piece in the creation of a quality supply chain. That said, some brokers don't make this a priority and fall through on their commitments as a result.
2. Managing The Logistics Of Each Shipment
Once a broker is comfortable with the quality and reliability of the carriers in its network, the work of moving your freight can begin. Planning your shipment's journey from start to finish, no matter the resources needed, is the key function of a brokerage. Responsibilities can include:
- Arranging pickup appointments
- Relaying in-transit updates
- Arranging recovery options if/when something goes wrong
- Working with consignees to arrange deliveries
- Helping customers manage costs and optimize supply chain procedures
Whether you need to get your freight overseas, across the nation or simply to a nearby town, a freight broker's job is to find and oversee the best possible solution to reach your destination.
How to Choose a Freight Brokerage
Choosing to work with a freight brokerage is a big decision. To ensure the best possible experience and fit, here are four things to consider as you vet a possible addition to your transportation network:
1. Brokerage Size
Freight brokerages vary in size. Some of the nation’s largest freight brokerages leverage massive networks of carriers, giving them a large variety of options for each situation. With size comes varying levels of capacity and capability. When it comes to picking which brokerage to partner with, you should always take stock of your own needs and search accordingly.
Larger freight brokerages are useful in times of uncertainty where special actions, such as re-routing a shipment or re-powering a load, are necessary. While it isn’t always the case, you may sacrifice service at larger brokerages.
Smaller freight brokerages are also an option. Although many times smaller brokers provide excellent customer service and attentive salespeople, they are not without their faults. As the size of a broker's network decreases, so does their ability to efficiently respond to a quick change of plans. This is due mostly to the fact that they simply don’t have the resources of a larger firm.
Some smaller brokers have been known to leave the freight brokerage industry with a bad reputation.
Given the name “basement brokerages,” the small brokerages ran out of people’s homes tend to come with limited resources. As challenges come up surrounding a customer's shipment, it’s often these smaller operations that are unable to deal with them cost-effectively as they try to maintain their bottom line.
Larger freight brokers tend to avoid these issues because of their ability to absorb a loss now and then, leaving them with the ability to stick to their originally quoted price more easily.
2. Communication Practices
Communication is key in all relationships. Your relationship with your freight brokerage is no exception. From the beginning, it’s important that you feel that your concerns are heard and your goals shared.
A good way to measure this is to ask your potential freight partner for references. By reaching out to some of their current customers, you will be able to further determine whether they are your right fit.
3. Capacity
With over 700,000 trucking companies to select from, the brokerage of your choosing must have the resources you need.
97 percent of trucking companies currently operating in the U.S. have less than 20 trucks in their fleet. If your shipping needs are not met because of the size and capabilities of a certain brokerage, this can send ripples of disruption along your supply chain.
As such, ensuring the brokerage you choose has the capabilities you need is an essential factor in making the right decision.
4. Reliability
When it comes to the shipment of your goods, reliability goes well beyond receiving an on-time delivery. Although your brokerage must be able to meet deadlines, there is more to consider when it comes to selecting a reliable brokerage.
When a freight brokerage says that it can ship your load for a certain price it should always do so. A quality brokerage will not come back to you following your initial transaction asking for more money. It is practices like this that give freight brokers a bad name.
Pick a freight brokerage that will quote you a price and stick to it. If this means that they have to take a loss because of an unforeseen circumstance, so be it. This is a business of relationships and, as their customer, you come first.
The Next Step in Your Shipping Journey
Moving your freight doesn’t have to be intimidating. Consider what’s important to you, ask your transportation provider the right questions and find someone that fits your needs, not the other way around.
Now that you know what a freight brokerage is, what their primary duties are and what to look for when choosing one, you’re ready to continue your search.
Download The Freight Brokerage Selection Checklist, a comprehensive guide for vetting your current and future freight brokers, today. Doing so will ensure that, when the time comes, you've done everything in your power to select the right partner for your needs.
If you’d like to do some more research check out the rest of our articles. At the end of the day, we just want you to be happy with whatever decision you make. That said, if you have any further questions please don’t hesitate to reach out and ask.
