Why do shippers use freight brokers

For more on 53' domestic intermodal , truckload and managed transportation services , sign-up for our weekly blogs and visit the InTek Freight and Logistics website. Visit our website and become a blog follower. Categories Follow Us Subscribe. The short answer to the above question is it depends.

Definition of a Freight Broker A freight broker is an individual or company that works directly with shippers and motor freight carriers to facilitate the movement of freight for a shipper. Reasons for Shippers to Use a Freight Broker Save Time by Quickly Accessing Freight Capacity When Required Freight brokers have internal technology that ties into multiple freight load boards and other industry touchpoints that allow them to quickly access capacity at the best rate at the time of shipment tender.

This comes from motor carriers constantly calling them sharing where they need freight to balance out their networks, while constantly selling their strengths. Our experience is that was probably the case in history than in actual practice today. An LSP has significantly more motor carrier options to work through because of its connections to the outside world through its technology platform. Because of this, they operate and invest heavily in technology. The cost of technology is not any cheaper than a shipper, but since it can leverage the cost of technology across a larger piece of freight business, it is less costly and can therefore implement and execute more bells and whistles in the system.

This hands on knowledge keeps them abreast of the overall factors driving capacity and price, both now and into the future. At a minimum, the best freight brokers check to see the carriers they are running with are legal and safe every day by checking their operating authority, insurance policies and are safe.

Their interest is to move freight and do it well, so they pick up customers through word of mouth. At times this is not enough, so the motor carriers will post their load preferences on freight load boards for freight brokers to contact them when freight is moving in their preferred freight lanes.

This is where the logistics service provider steps in to fill the void with its technology and communications. Misconceptions of a Freight Broker Increase Costs for the Shipper As we like to say price gets a freight provider in the door, while service keeps them there.

There would not be a multi-billion dollar industry made of over 17, non-asset freight providers if they could not improve the cost of logistics for shippers. Decreases Revenue for Motor Carriers Often motor carriers do not have the resources to support a sales team, so on the contrary freight brokers help build and sustain asset freight carriers.

Consider these five important advantages of using a freight broker:. Save time, save resources, save money. With a freight broker as a strategic partner, you have the benefit of your own dedicated shipping department without the expense your own dedicated shipping department.

More flexibility, more scalability. A freight broker partner is able to provide you more, or less, capacity as your business goes through its natural cycles.

You might find them engaged in any or all of the following activities:. Each of the above tasks is crucial for logistics networks to operate efficiently, making freight brokers a vital element in interstate supply chains. Why do so many businesses use freight brokers to arrange transportation for their cargo loads? Here are some of the major benefits that skilled freight brokers offer:. However, these benefits depend on finding a freight broker with the right qualifications and skills.

When choosing a new freight broker to work with, shippers need to be particularly aware of the key credentials for a freight broker. The minimum credentials that any freight broker should possess are:. A forwarder will often consolidate, assemble, and reorganize the cargo to make it easier to ship. Because they take a greater degree of ownership over cargo, freight forwarders also ship under their own bills of lading.

Freight forwarders also play a more prominent role in international freight than freight brokers do. Freight brokers do coordinate some international shipments, but their role is usually limited. Because freight forwarders take possession of the freight and are legally responsible for it, they require more specialized training and take on much more risk than freight brokers do. Freight forwarders also must usually operate at least one warehouse and employ personnel to manage it.

A freight broker, on the other hand, does all of their work over the phone and through the internet, never seeing or handling any of the cargo that they arrange transportation for. Thus, their startup costs and barriers to entry tend to be lower. For shippers, as you grow your operation and ship more freight, you might not have time or the staff to maintain your quality standards.

And as a freight carrier, you need reliable access to freight so you can boost your earning potential. A freight broker is a middleman between shippers and carriers.

Instead of taking possession of the freight, the broker facilitates communication between the shipper and the carrier. Shippers like working with freight brokers because they have a single point of contact from point A to point B while their freight moves to its destination. Working with a broker eliminates the messy process of negotiating with a carrier, planning routes, and tracking freight.

Carriers also like working with freight brokers to optimize their routes and minimize deadhead miles, boosting their earnings in less time. Freight brokers use their expertise to improve delivery times, prevent damage , and increase your supply chain efficiency. These brokers offer lower rates because they combine the freight volume of all the shippers they work with, negotiating lower rates that they pass on to their customers.

Flock Freight serves as an extension of your logistics team, matching shippers and carriers for on-time, damage-free shipping. You focus on your business and let them worry about moving the freight. It depends on your business and industry. Worried about costs? Shippers live and die by their margins, and cost reduction is one of the most popular reasons shippers hire freight brokers.

Freight brokers are experts at freight. They have the experience and connections to optimize your supply chain, finding easy wins that slash your costs—passing the savings on to you. Plus, freight brokers are consultants. Flock Freight does this with our experienced team of logistics experts and cloud-based computing, speeding up the shipping process to save you even more money. Every business wants to grow. If you need to process a huge influx of freight in a short window of time, a freight broker has the expertise to handle it for you.

Avoid speed bumps as you scale your business. Time is literally money in the world of shipping.