Trying to arrange all your freight shipments on your own can quickly become unrealistic and overwhelming. After all, you’re not an expert, and you have tons of other responsibilities on your plate.
The good news is that freight brokers like RPM are here to help. So here’s what you need to know about freight brokers and how to know when you need one:
What Is a Freight Broker Business?
A freight brokerage business acts as a middleman between shippers and carriers. A freight broker works with an established network of carriers with their own trucks and equipment to arrange shipments based on qualifications set by the shipper. They act as the main point of contact between both sides for a more simplified and straightforward process for everyone involved.
How to Know When You Need a Freight Brokerage
You might need a freight brokerage if your business is growing quickly, and you need to increase your shipping capacity quickly as well to keep up with demand.
You might also need a freight brokerage if you have an issue with your current shipping provider’s service or dependability.
Finally, you might need a freight brokerage if you’re looking to increase your cost-effectiveness and overall efficiency.
Factors to Consider When Deciding to Work With a Freight Broker
There are many different factors to consider when working with a freight broker, namely cost reduction, capacity, time, and quality. Here’s what you need to know:
Factor 1: Reduce Costs by Using a Freight Brokerage
Using a freight broker can help you reduce your shipping and transportation costs. This is because brokers work with multiple different carriers that are all competing to earn your business by offering the best rates.
If you were trying to broker transportation on your own, you wouldn’t have the ability to negotiate with different carriers to get the best rate. Instead, you would have to reach out to each one individually, get a quote, and choose the best option — likely paying more in the process.
So if you’re a new company with tight margins or are an established company looking to scale, working with a freight broker can help you reduce costs and further invest in your business to promote growth.
Factor 2: A Freight Broker Helps Improve Shipping Capacity
Using a freight broker can also help you improve your shipping capacity. If you were trying to manage transportation in-house or work with a single company, you would likely face capacity constraints. This is especially true if you have a large number of goods that you’re trying to transport on a consistent basis.
By using a freight broker, you now have access to countless different carriers who can handle your shipping needs — no matter how large. Using a freight broker is particularly beneficial if you have specialized shipping needs and require temperature-controlled transport, expedited transport, liquid freight transport, etc.
Factor 3: Improve Time and Quality With a Freight Broker
Finally, using a freight broker can help you improve the speed and quality of your shipments. Since you now have increased shipping capacity thanks to access to multiple carriers, you don’t have to sit and wait around for a dedicated carrier to have the capacity to handle your shipment. Instead, you can arrange for your shipment and get your items on the truck and delivered quickly.
Furthermore, since you’re working with a single point of contact with streamlined communication, the overall quality of the transportation process should improve. Finally, brokers can carefully vet their carriers to ensure the quality of your transportation experience from start to finish.
Pros And Cons of Freight Brokers
To make the best transportation and logistics decisions for your business, you need to be informed of the pros and cons of using freight brokers.
Pros
The pros of freight brokers include:
- Dedicated customer support: Brokers are better able to prioritize customer support since they aren’t the ones on the roads. On the other hand, carriers can be hard to reach as they drive long distances through remote areas.
- Strong personal relationships: Since brokers are better able to prioritize customer support, they can build strong relationships with their customers. They can then learn more about their customers’ needs and work to meet them every time.
- More flexible shipping options: Brokers have access to numerous carriers that offer a wide range of different shipping options. They also have more flexible timeframes so you can ship using your preferences.
- Lessening your workload: Managing your freight operations on your own can be a lot — and odds are you have tons of other things to worry about. You can get back to more important aspects of running a business by outsourcing a lot of the work to a freight brokerage.
Cons
The cons of freight brokers include:
- Indirect approach: When you work with a freight brokerage, you’re not directly working with the carrier that’s actually handling your shipments. While this approach can be inefficient, working with an experienced broker who prioritizes communication can make it more efficient than working with carriers directly.
- Set pool of carriers: Brokers only work with carriers in their existing network. So brokers with limited networks are going to have limited capacities that actually aren’t very beneficial. Instead, be sure to work with a broker that has an extensive carrier network.
- Potentially high fees: Although brokers can help you cut down on costs, they also add their own fees that can result in higher overall costs. Make sure to get a complete cost breakdown to ensure that working with a broker is actually cost-effective.
Example of Using a Freight Brokerage
Say you have chosen to use a freight brokerage based on everything we’ve discussed so far. What would that look like? For starters, you would locate a qualified and reputable brokerage.
You would describe to them your shipping needs. From there, they would locate and contract out to a carrier with the right capacity and equipment for your shipment. The broker would then update you along the way and handle any issues that come up.
Over time, working with your broker will only become easier as they begin to learn more about your shipping needs and expectations.
Example of Not Using a Freight Brokerage
But say you have chosen not to use a freight brokerage. You would need to locate and reach out to several different carriers to check their capacity, availability, and pricing options.
From there, you would need to make sure that they can handle your shipment within your desired timeframe.
Finally, you would work with them throughout the process to ensure that your shipment arrives safely and on time.
How to Choose a Freight Broker?
Clearly, there are benefits to using a freight brokerage to transport your cargo. But how can you choose one that will actually allow you to reap all of these benefits?
You need to know where to look. If you have friends, family, or other colleagues in the industry, you could start by asking them if they have any recommendations for brokers that they currently use or have used in the past. If you can’t receive any personal recommendations, the next best place to look is online.
Freight Broker Services
Conduct a simple search for freight brokers near you and see what comes up. Visit the websites for some of the resulting companies. Check out what kinds of services they offer to make sure that they have what you’re looking for. For instance, some brokers are specialized and only offer one or two types of services. On the other hand, some brokers are more general and offer a whole host of different services.
RPM, for example, has a whole host of freight services to meet your needs. For starters, we offer vehicle transport services — catering to various industries, including manufacturers, retail, fleet management, rentals, remarketing, auctions, and privately owned vehicles. We also offer full truckloads, singles, inoperable, and specialized hauls.
But RPM doesn’t just haul vehicles, in fact, we haul all sorts of freight, including automotive inbound, food and beverage, consumer packaged goods, retail and ecommerce, steel and industrial materials, manufacturing and machinery, building materials, chemicals, drayage, energy and utilities, paper and packaging, high value and electronics, and agriculture.
Our freight transportation solutions are diverse to meet your needs adequately. We offer less than truckload (LTL), full truckload (FTL), expedited, consolidation, intermodal, and cross-border shipping.
Freight Broker Certification
So once you’ve determined that a freight brokerage can meet your hauling needs, you need to do your due diligence to make sure that you can trust them with your precious cargo — whatever it is. You can start by checking their certification with the Federal Motor Carrier Safety Administration.
The FMCSA offers a database where people can pull up a concise electronic record of a company’s identification, size, commodity information, and safety record, including the safety rating, a roadside out-of-service inspection summary, and crash information. You can search this database by USDOT number, MC/MX number, or company name.
Reputation of the Freight Brokerage
After you’ve accessed relevant information from the FMCSA and have determined that the company is registered and safe, the next step in your due diligence process involves checking reviews. Many companies have reviews posted directly on their websites. However, you should also check external sources.
For instance, Google and Yelp are great review platforms since companies cannot pay to have bad reviews deleted. You should also check the Better Business Bureau’s (BBB) website to see if the company has received any complaints against them.
Again, the BBB is a very reputable organization that allows customers to leave reviews and make complaints against businesses. The organization then helps settle any disputes between consumers and companies and also posts the results of any settlements on their website.
Prices of Freight Brokers
Now that you know that a freight brokerage is qualified and reputable, you need to make sure that they actually fit into your budget. Reach out to your final list of companies for quotes based on the items you’re shipping, where they’re coming from, where they’re going, when they need to go, and how quickly they need to get there.
At the same time, you should keep in mind that cheap quotes aren’t necessarily good quotes. Lower quotes often mean lesser service, especially if you receive a substantially lower price than the others for no discernable reason.
So while price should definitely play a role in your decision, it shouldn’t be the only factor involved.
Conclusion
So if you’re looking for a freight brokerage that checks all these boxes, then you need to check out RPM Freight. RPM is a top logistics provider that works in both vehicle and freight transportation. We work with thousands of shipments a day as a complete, end-to-end transportation service provider.
We are able to handle such a large volume of shipments thanks to our extensive network of more than 30,000 independent carriers. We work with over 2,000 clients consistently, and we are dedicated to providing top-notch customer service by giving you a single point of contact, a clear-cut service level agreement, and a transparent pricing matrix.
Reach out to RPM today for more information, including pricing.
Sources:
What Does a Freight Broker Do? | Trucker Path
The Pros and Cons of Traditional Freight Brokers | Convoy
SAFER Web - Company Snapshot | FMCSA
