Many businesses think that they have to handle shipping all on their own. But what if they didn’t have to? Freight brokers offer a suitable solution to shipping issues that are plaguing businesses in a particularly challenging time in the freight industry.
But don’t just take our word for it — here are five benefits of using a freight broker and how you can take advantage of these benefits with the best broker partner for your business and shipping needs:
What Is a Freight Broker?
A freight broker works with both shippers and carriers to arrange shipments. Effectively, they act as a middleman between two sides — on one side, shippers who need products shipped and on the other side, carriers who need shipments to haul.
Shippers often need a wide variety of different products shipped and choose to work with freight brokers to gain access to a diverse network of carriers who can meet their shipping needs.
Carriers often need access to many different loads in order to earn money and establish a successful career as a driver, so they choose to work with freight brokers to gain access to load boards where they can quickly and easily book loads that work with their schedules.
What Does a Freight Broker Do?
While being a middleman may seem simple, there’s actually more to the operation than meets the eye. For example, freight brokers don’t just provide loads to carriers and then leave them hanging.
Instead, they have to support them throughout their journey from origin to destination. If there’s a problem on the road, the freight broker needs to be there to answer that call.
Freight brokers also provide drivers with the technology and tools they need to complete loads safely and in a timely manner. For example, freight brokers might provide drivers with electronic logging devices or ELDs required for reporting service hours.
Freight brokers might also provide drivers with a dedicated app or tool that they can use to communicate with the broker, manage documents, and book shipments.
At the same time, it’s important to note that all brokers are different, offer different services, and have different capabilities.
For example, some freight brokers specialize in specific types of freight, whereas others can handle a wide variety of different categories, including:
- Automotive inbound,
- Food and beverage,
- Consumer packaged goods (CPG),
- Retail and ecommerce,
- Steel and industrial materials,
- Manufacturing and machinery,
- Building materials,
- Chemicals,
- Drayage,
- Energy and utilities,
- Paper and packaging,
- High value and electronics,
- Agriculture.
As you can see, some of these categories are highly specialized and require experienced brokers with specialized carriers.
Take chemicals, for example. Drivers who transport hazardous materials like chemicals on the road need to be registered and trained to do so according to the Hazardous Materials Transportation Act (HMTA).
From there, these specialized drivers are required to follow federal regulations related to packaging, marking, shipping papers, placarding, incident reporting, and more.
Agricultural products have a whole different set of regulations under the Food Safety Modernization Act (FSMA). They need to be followed to prevent things like cross-contamination and spoilage that risk the value of the shipment in question and the health of consumers.
Drivers who transport agricultural products need to be educated and trained on cleaning requirements, temperature requirements, and cross-contamination precautions.
Who Should Use a Freight Broker?
Based on what you’ve learned so far about freight brokers, you’re probably wondering if you should use one yourself. Here are some situations in which you may want to consider using a freight broker:
- You need items shipped quickly and are suffering from the driver shortage
- You have a tight bottom line and need to save money on shipments with competitive rates
- You need specialty items shipped and are having trouble finding carriers to meet your unique shipping needs
- You need a wide variety of items shipped and are having trouble finding carriers to meet your diverse shipping needs
- You are having trouble understanding and working within the freight industry on your own
- You are spending too many resources — both temporal and financial — on handling your freight shipments on your own
What Are the Benefits of Using a Freight Broker?
There are so many benefits of using a freight broker, here are just five of them to consider:
1. Increased Capacity, Adaptability, and Scalability
Using a freight broker offers increased capacity, adaptability, and scalability. Freight brokers usually have extensive networks of carriers that they work with, so by using a freight broker, you now have access to thousands of carriers who are able to quickly and safely handle your loads.
This is incredibly valuable in an industry that’s struggling greatly with a driver shortage. So while it can be nearly impossible to find a driver on your own, a broker makes it incredibly easy. They simply post your load to their load board, and it quickly gets picked up by a qualified driver.
With these capabilities, you no longer have to worry about changing schedules and shipments because there will always be drivers available to work with these changes. You also don’t have to worry about the driver shortage negatively affecting your ability to scale. You simply get your work done and allow your freight brokers to do theirs as well.
2. Reduced Costs
Using a freight broker can actually help you reduce costs. Instead of handling all freight operations within your own company — spending all sorts of time and money in the process — a freight brokerage takes all of this work off your hands.
Specifically, freight brokers can help you save time and money on things like invoices, audits, staff training, computer systems, and equipment.
Furthermore, freight brokers have the experience and resources necessary to minimize costs. For example, they’re working with countless different carriers who are all competing for your business.
So instead of being at the mercy of a few dedicated carriers, you have a whole host of them willing to haul your products for a better price.
3. Improved Quality and Efficiency
Using a freight broker can also help you improve the quality and efficiency of your shipping. Freight brokers have extensive experience in the industry, an experience that they use to run a flawless operation.
For example, brokers only work with drivers who already have experience and are proven to be safe and high-quality drivers who take good care of their cargo.
Freight brokers can also boost shipping efficiency thanks to their extensive networks. This means that loads can be quickly picked up and hit the road instead of sitting around just waiting for a carrier.
Increased efficiency on the part of freight brokers helps you meet your timelines and the expectations of your customers.
4. Access to a Broad Network
Using a freight broker provides you access to a broad network of carriers that are able to meet your diverse shipping needs.
For example, the best freight brokers work with carriers who drive a wide variety of different vehicles, including dry vans, flatbed trucks, refrigerated (reefer) trucks, dump trucks, and more.
The best freight brokers are also equipped to handle less than truckloads (LTL), full truckloads (FTL), intermodal, cross-border, and drayage shipping.
They are able to work with companies from a number of different industries, including agriculture, chemical, manufacturing, retail, food and beverage, paper, building materials, automotive inbound, and consumer packaged goods (CPG).
5. Faster Transportation
Finally, using a freight broker can help you achieve a faster level of transportation that would be impossible to achieve on your own. The carriers that work with freight brokers are experienced and efficient drivers — reaching their destinations safely but in a timely manner.
RPM, for example, boasts an on-time delivery rate of 98%. So if you want your shipments to reach their destination in record time, then you should consider working with a freight brokerage like RPM.
How Can I Evaluate a Freight Brokerage?
Even though using a freight broker can be incredibly beneficial, not all freight brokers are created equal. It’s important to evaluate a freight brokerage beforehand to ensure that you reap all the benefits.
Here are some of the different factors you should consider when evaluating a freight brokerage:
1. Experience
The first thing you need to consider when evaluating a freight brokerage is experience. The freight industry is complicated and cannot be learned overnight. Instead, the industry can only be learned through years of experience.
RPM, for example, has nearly ten years of experience in the freight industry after being founded in 2012.
In addition to general industry experience, it’s important to look for a freight brokerage that has specific experience in your area. This is because shipping agricultural products differ greatly from shipping chemicals.
Not all brokers are equipped to ship all products, so make sure that the brokers you’re considering are actually equipped to ship your products.
2. Reputation
When evaluating a freight brokerage, the second thing you need to consider is reputation. Reputation is everything in the business world, and the freight industry is no exception.
In fact, it’s perhaps even more important in the freight industry as brokers are entrusted with the shipping and safety of hundreds of thousands of dollars in products.
When researching potential freight brokerages, be sure to check online reviews from clients. Consider asking them for a list of references that you can contact yourself to verify.
Another indicator of a good reputation comes in the form of awards. RPM has received more than 25 awards since its founding in 2012.
We earned a spot on Inc.’s 5000 lists for seven consecutive years, Inc.’s Best Workplaces in 2018, and Crain’s Detroit Business Private 200. These awards truly speak volumes about our reputation.
3. Partnerships
When evaluating a freight brokerage, the third thing you need to consider relates to partnerships. After all, a freight brokerage is only as good as its carrier network.
These days, an extensive carrier network is hard to come by, thanks to driver shortages that have greatly impacted the industry.
RPM, however, hasn’t let the driver shortage negatively affect our service or operations. We have been able to maintain an extensive network of over 30,000 monitored and vetted carriers.
We are able to maintain such an extensive network of carriers by consistently going above and beyond for our drivers.
For example, we developed a dedicated driver app to help our carriers on the road. This app provides our drivers with one-to-one support that’s always available 24 hours a day, seven days a week, and 365 days a year.
Not only that, but our drivers are provided with a dedicated representative who understands their needs and can assist with things like weather delays, equipment issues, and damage claims.
Speaking of damage claims, this is also easy with the app, thanks to real-time capture capabilities. All driver documents can also be digitally captured within the app.
Finally, the app is used to book loads, obtain fair pricing, and process payments in record time.
4. Pricing
When evaluating a freight brokerage, the fourth thing you need to consider is pricing. Shipping can be expensive, and you want to make sure that you’re not spending more than you have to. At the same time, it’s important to keep in mind that you get what you pay for.
The best approach involves reaching out to several different brokers for quotes. From there, you can evaluate service, experience, and reputation with pricing in mind.
Most of the time, it makes sense for you to pay a bit more for a more experienced broker with a larger network and a better reputation.
5. Licenses and Insurance
Finally, you need to consider proper licenses and insurance when evaluating a freight brokerage. You need to ensure that your broker maintains the correct licenses and adequate insurance coverage.
To check to see if a potential broker is properly licensed, you need to check the Federal Motor Carrier Safety Administration (FMCSA) Licensing and Insurance system.
Select “carrier search” from the drop-down menu. You can then search by USDOT number, docket number, legal name, DBA name, and state.
Under “Motor Carrier Detail,s” you can then see information including the business address, authority type, and insurance type.
If you do not have access to the Internet, the FMCSA also maintains a toll-free number that you can call to look up this information — 800-832-5660.
Conclusion
So make your life easier with a freight broker. Consider working with a freight broker as an investment that will actually end up saving you a ton of time and money at the end of the day.
However, this investment only pays off if you find the right broker to work with.
Do your due diligence by considering the experience, reputation, partnerships, pricing, and licenses of potential brokers to make an informed decision.
Visit RPM today for more information on freight brokers and their benefits.
Sources:
Trucking Industry - Transporting Hazardous Materials | OSHA
Food Safety Modernization Act (FSMA) | FDA
Licensing & Insurance Carrier Search | FMCSA
