A well-rounded transportation provider network includes many types of carriers, from asset-based companies to specialized providers to freight brokerages.
Freight brokerages are unique in the carrier space as they do not own or operate their own trucks. Instead, they manage relationships with their own network of trusted carriers and match customer freight to those carriers' capabilities and strengths.
Of course, any time you're handing off your company's freight to a new carrier or provider, it can be a nerve-wracking experience — especially if you're not familiar with the ins and outs of how a provider operates.
ATS Logistics, a subsidiary of Anderson Trucking Service (ATS) and a licensed freight brokerage of over 30 years, has helped many shippers understand what freight brokers do and how to incorporate them into a shipping strategy successfully.
In this article, we'll answer all your questions about how freight brokers work, why shippers use freight brokers, and how to select the right brokerage for your network.
Key Takeaways for Shippers
- Freight brokers act as intermediaries between shippers and carriers.
- Freight brokers do not own or operate their own trucks, nor do they employ drivers.
- Instead, freight brokers vet and manage carriers for capacity, reliability, compliance, and other factors and broker customer freight to them.
- Benefits of working with freight brokerages can include access to a wider carrier network, flexibility, and savings of cost and time.
What Is a Freight Brokerage?
A freight brokerage is a type of transportation solutions provider that serves as the bridge between companies that need to move freight (shippers) and companies that have the equipment and drivers to do it (carriers).
Instead of contacting multiple carriers individually for quotes when they need to move a load, a shipper can rely on a broker to find the best option based on capacity, price, timing, and service level.
To be successful, freight brokerages must maintain strong relationships with regional, national, and international carriers to ensure consistent capacity and dependable delivery.
How Does a Freight Brokerage Work?
A freight brokerage works by connecting a shipment with the right carrier based on the shipment's specifications and the carrier's capacity, capabilities, driver pool, and other factors.
That means a freight broker's job starts long before any shipment leaves a loading dock.
When a shipper contacts a broker with a load that needs moving, the brokerage will review the details of the load, like size, mode, pickup and delivery points, and special handling needs.
From there, the broker will match the shipment to the best-fit carrier in its network. Throughout the shipment's transportation, the freight broker will be responsible for managing communication both with the shipper and the carrier.
Other responsibilities of a quality brokerage include:
- Negotiating rates and securing capacity within the shipper’s timeline
- Working with customers to balance costs and optimize supply chain procedures
- Coordinating pickups, deliveries, and all necessary documentation
- Monitoring the load’s progress with real-time visibility tools and relaying in-transit updates to shippers as needed
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Providing proactive communication and recovery solutions if any issues arise
Why Shippers Use Freight Brokerages
In general, it's good sense to build your freight network to include a variety of provider types, not just asset-based providers or just brokerages.
This strategy can help businesses maintain a more dependable, smoother supply chain, as it allows for greater flexibility and provides shippers with the power of choice — even when the market is unpredictable.
Freight brokerages in and of themselves can offer shippers a much wider range of capacity, pricing, and equipment options than they might have access to via asset providers alone. That's just one of several reasons why businesses choose to ship with freight brokerages like ATS Logistics:
1. Access to a Wider Carrier Network
Freight brokers maintain partnerships with hundreds (or even thousands!) of carriers. This gives shippers access to a broad range of equipment types — from dry vans and flatbeds to intermodal options — and levels of driver experience and endorsements without having to manage those relationships directly.
2. Cost & Time Savings
A wider pool of carriers can also allow shippers to be choosier about the rate they pay. Brokers can also use their carrier relationships and volume leverage to secure better rates for shippers than they might find on the spot market.
There's also savings of time and effort to consider. Instead of spending hours working with carriers to secure capacity, shippers can rely on brokers to handle negotiations and scheduling on their behalf. This allows shippers to spend less time on logistics and more time on the important operational needs of their business.
3. Risk Management & Compliance
Freight brokerages take the work of vetting carriers off shippers' plates. A reliable broker has vetted (and, ideally, continually vets) every carrier in their network for safety ratings, performance history and reliability, insurance coverage, driver experience and training, and a variety of other factors that all inform your experience.
This oversight protects shippers from exposure to unqualified or non-compliant carriers, and saves them the time, energy, and potential risk exposure of vetting carriers themselves.
4. Flexible Capacity During Market Shifts
The freight market can be unpredictable, and shippers' needs can change. When capacity tightens or demand spikes, freight brokers provide flexibility by leaning on their network to source available trucks quickly.
This flexibility can be critical for shippers that experience seasonal surges, have dynamic needs, or simply want the peace of mind of knowing they'll be able to find a truck in almost any circumstance.
When building out shipping strategies in challenging markets, many shippers therefore find that freight brokers offer the capacity options and fast response time they need to keep their supply chains nimble and shipments moving.
How to Choose the Right Freight Brokerage
Not all brokerages offer the same level of reliability, depth of carrier pool, or transparent, fair pricing. When evaluating partners, consider these factors:
- Communication: A good freight broker will practice clear, consistent communication throughout every stage of your shipment. They should provide proactive updates, offer accessible support (whether that's via phone, email, or a digital customer portal), and respond to questions promptly.
Pro tip: If you have a hard time getting ahold of a brokerage during your provider vetting process, that's a red flag and a sign to proceed with caution. - Network size: When considering broker size, the story of Goldilocks and the Three Bears comes to mind. You're looking for a brokerage that's not too small (so they may not have the resources necessary to support your shipment and maintain a balance of cost and service quality) and not too large (so they may not be able to provide attentive, personalized customer service) — it's just right.
"Just right" will look different to every shipper, but in general, a mid-sized broker with the carrier spread to meet all your needs and a proven history of customer satisfaction is more likely to hit the mark than a small "basement brokerage" or a huge international conglomerate.
- Reputation: As you're vetting brokers to add to your network, be sure to do your due diligence on their reputation in the industry and with customers. Ask about their on-time delivery (OTD) performance and safety scores. Browse their online reviews from customers (you can even ask to be connected with a current customer whose needs are similar to yours so you can hear about their experience firsthand!) A transparent brokerage that welcomes these types of questions and vetting is a brokerage with integrity.
Pro tip: Unfortunately, not every brokerage is trustworthy. Be aware of the warning signs of double brokering and stay alert to protect your freight and your business. - Technology: Visibility is always important, but especially when introducing another party into your supply chain. Look for brokers that utilize up-to-date technologies both in-house (such as EDI capabilities, market monitoring tools, and network management systems) and with customers (think real-time load tracking, self-service customer portals, etc.).
An investment in these types of tools shows that the brokerage is serious about improving their customers' experience, and about providing as much information as accurately, clearly, and quickly as possible.
Find Your Best-Fit Brokerages Faster
Freight brokerages are another tool in a successful shipper's toolbox, allowing them to access a greater pool of capacity without having to managing relationships with each of those carriers themselves.
Having brokerages in your freight carrier network can help make your supply chain stronger and more efficient through the power of flexibility. Whether you regularly rely on the brokers in your network or use them as a solid Plan B when asset-based coverage falls through, we recommend having at least one broker you trust in your network.
If you're looking to add a freight broker to your network for the first time, consider grabbing a free download of our Freight Broker Selection Checklist. We developed this rubric to help shippers navigate the brokerage vetting process in a simple, straightforward manner.
Use it to grade the brokers you're considering for your network and compare scores to determine which is the best fit for your business's needs.
Frequently Asked Questions About Freight Brokerages
What’s the difference between a freight broker and a freight carrier?
A freight carrier owns and operates the trucks that move freight and hires the drivers that operate them. A freight broker does not own equipment or hire drivers, but connects shippers with qualified carriers to arrange transportation.
Do freight brokers handle all shipment types?
It depends on the specific brokerage, but in general, many brokers, including ATS Logistics, do work with cross-border, heavy haul, specialized, and less-than-truckload (LTL) freight in addition to standard truckload shipments.
Is using a freight brokerage more expensive?
Not necessarily. Brokers often save shippers money by negotiating better rates through established carrier relationships, optimized route efficiency, volume leverage, and competition in the marketplace.
Is using a freight brokerage riskier than using an asset carrier?
Not inherently. In some ways, using a freight brokerage may actually present less risk than an asset carrier, as asset carriers have a finite amount of trucks they are able to commit. If your asset carrier can't cover your load, they can't cover your load — full stop. In contrast, a freight brokerage can source capacity from any number of carriers to ensure your load is covered. Regardless of the type of provider you choose, it is important to thoroughly vet them for capacity, reliability, and reputation before giving them your business.
