4 Questions to Consider when Choosing a Freight Broker

Freight Brokerage, Transportation Management
August 31, 2015

Freight BrokerageWith back-to-school already here and the holiday shopping season quickly approaching, many shippers – and the carriers they rely on – are facing a freight crunch. How can shippers ensure sufficient capacity so their loads are delivered on time and on budget? For some, the solution is freight brokerage.

Formerly frowned upon by major carriers, freight brokers today serve a critical role as middle-men between shippers and carriers. This is especially true as shippers face pain points like driver and rail shortages, constrained truckload carrier capacity, rising transportation costs, limited ability to source service providers, lack of subject matter expertise, and a lack of shipment visibility and reporting that often leave shippers in the dark.

The right broker can deliver an invaluable service. With thousands of freight brokers in the market, and all claiming to run professional operations, however, how can shippers ensure loads are contracted to reliable, proven carriers? The difference between brokers often can be summed up in two concepts: integrity and financial stability.

Coming off a year that saw tonnage at the highest level some have seen in decades, the second half of 2015 is shaping up to be equally busy. With capacity tight, and the holiday season likely to test shippers’ stringent deadlines, a conflict with a freight broker or carrier is the last thing you’ll want to face.

Consider these four questions when choosing and partnering with a reliable broker:

  • Are the broker – and its contracted carriers – proven and reliable partners? The broker must be your partner in the shipping process, and make partners of its carriers. Does the broker vet its carriers with a carrier qualification process? Is the broker brokering to another broker? Though uncommon, “double brokering” takes control even further from the shipper.
  • Is your broker reputable enough to take your $250,000 shipment? Are they bonded and carry a certificate of insurance for contingent cargo? Is the broker financially stable? Remember, if a broker goes under or fails to pay the carrier, the carrier has the legal right to pursue the shipper for payment. Will the broker offer references, and is it a member of the Transportation Intermediaries Association, an industry trade group for brokers, 3PLs, freight forwarders and other non-carriers involved in moving freight?
  • Can you improve the timing of your shipment? As fall approaches, capacity will tighten further. Turning to brokers at the end of the month or quarter, typically heavy times for shippers to make their numbers, can lead to higher transportation costs. Work with your broker to improve timing and ensure your load doesn’t get lost in the end-of-period crunch.
  • Should you engage your 3PL partner? For many shippers, working with a freight broker is beyond core competencies. If this is true at your organization, a 3PL can help with the data, technology and analytics needed to select or suggest a reputable freight broker. Some 3PLs have both the dedicated assets and customer fleets to fill back hauls, providing an additional, reliable capacity source other brokers may not have.

Planned well and with the right partner, the coming peak season of back-to-school and holiday shipping can leave shippers with sufficient capacity and reasonable transportation cost levels, consistent service, heightened visibility and control, and at reduced financial exposure to ensure the shipper can focus on core competencies and meet all their shipping needs.

 

Authored by Tim Podvin

Tim Podvin is Senior Director with Ryder Freight Management. Tim has over 35 years of experience in the transportation industry.

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