How to Develop a Strategic Relationship with your Freight Broker

Freight brokers are no longer the Rodney Dangerfield of the transportation industry.  Prior to 2013, when the Federal Motor Carrier Safety Administration raised the bonding requirement, subpar brokers gave the industry a bad name. Since then, the higher bond surety and other competitive forces have caused more brokers to go out of business.

Despite tight freight capacity and driver shortages, remaining U.S. freight brokers continue to raise the bar on service levels and it shows. In 2015, the Transportation Intermediaries Association reported robust year-over-year growth for TL freight shipments handled by third-party intermediaries like brokers and 3PLs.

In addition to finding TL capacity, a savvy broker gets respect for their troubleshooting capabilities when it comes to finding capacity on last-minute or challenging loads. Freight brokers that offer 3PL services will do a whole lot more than find TL, LTL and intermodal capacity. These full-service brokers can assist you in solving some of your most complex logistics problems such as managing your inbound shipments or setting up a reverse logistics program.

Maximizing the relationship with your broker

Consistency of service and efficiencies in managing fewer vendors are just a couple of benefits of forming a strategic partnership with a broker. Think supply chain efficiencies in cost savings, operational streamlining, or labor reductions.

So how can you get the most out of your broker? Here are ways to approach a strategic relationship that will benefit both you and your broker:

Transparency. While Dangerfield may not have earned respect, you can win the admiration of your broker by treating the relationship like a direct customer. Tell the broker what to expect and communicate early and often.  Ask the broker what you can do for them to do their jobs better. When you seek to partner with a broker long term, tell them your expansion plans and freight challenges. Let them get to work.

Efficient internal operations. Try to avoid delays in notifying your broker of your loads and upcoming trade lane needs. This will help the broker retain the best carriers and keep costs under control. Any steps you can take to stay efficient with your internal processes also benefit the relationship, such as having all the correct shipment information and making sure the freight is ready as promised.

Embrace technology. Behemoth freight brokers no longer command the market with a corner on GPS-guided fleets and the latest routing software.  The evolution of technology has lowered barriers to entry, leveling the playing field. At a minimum, EDI is a must-have capability today for systems to talk to each other and for business to be conducted with accuracy and speed. Before doing business with a broker, ask about their computer systems and EDI capabilities, including electronic acceptance of loads.

Be willing to make a commitment. Show your faith and confidence in your broker’s performance by partnering with them. Start by analyzing where you currently use brokers. On what lanes are you most likely to use a broker? Make a volume commitment to the broker that best fulfills those lanes, when possible. In return, you are ensuring the broker can accommodate your loads and you won’t be scrambling when capacity gets tight.

What are your must-have supply chain challenges to solve? If you’ve found a good full-service broker and 3PL, they are capable of doing a lot more than lending an ear and suggesting solutions.

What’s your next freight move? At G&D Integrated, a full-service 3PL provider and freight broker, we bring more than a century of transportation services to shippers throughout the Midwest and beyond.

Resources featured in this blog:

Journal of Commerce, “U.S. Demand for Brokerage Rising in 2015, TIA Says”

http://www.joc.com/trucking-logistics/trucking-freight-brokers/us-demand-brokerage-rising-2015-tia-says_20150912.html

About the author:
Mark London is Vice President of Sales & Marketing of G&D Integrated.