Wednesday, May 19, 2010

How to Select a Freight Broker

Hallelujah, you just landed a big client that will double your manufacturing output. But your current freight provider can’t handle the extra loads. What do you do? Several freight brokers have called you in the past but you don’t know anything about them or how they operate.

Why consider a freight broker in the first place? They don’t own their own trucks so what are the benefits?

Because covering loads for their clients and managing shipments from pick-up to delivery are a freight brokers’ number one full time job. That’s all they do. So they are experts: experts on routing, experts on lane rates, experts on areas and regions of the country, experts on the intricacies of shipping different types of commodities and on different types of equipment. Unlike an actual trucking company who only has access to their own trucks, freight brokers have access to thousands of carriers and trucks. It is a freight broker’s job to know where there are available trucks. This is extremely helpful in getting short notice spot freight picked up on time. Freight brokerages typically carry additional cargo insurance that will help protect your loads should there be a claim.

Now, how to do you select the right one that fits your business?

Conduct the same type of due diligence you would with any other vendor. No matter how great a sales job you did, if you don’t deliver the product you have an unhappy customer. You can’t trust the load with just anybody. Unfortunately there are some unsavory and unethical freight brokers out there, and even worse…there are scam artists that will take your load, send you a bill, find a truck and run off with the money never paying the hardworking driver that delivered the freight. Your left holding the bag.

Here’s how to conduct that due diligence to ensure you select the best freight broker.

1. Check any freight broker’s authority documents and bond and make sure that the names and address on all documents match. If they don’t match it may be a scam.

2. Ask them about, and check their experience and reputation. How long have they been in business? Are they truly that expert you need or are they new to the game? Do they have any specializations? Are they members of industry associations, or have they won any awards for service?

3. Ask them about their size, as it does make a difference. The bigger they are the more they’ve already proven themselves to be trustworthy AND they have access to many more available trucks.

4. Ask them about their financial stability. Ask them what their credit worthiness ratings are and make sure to ask them how they pay the carriers they work with. Do they pay carriers fast or do they wait for you to pay your bill first? If they aren’t paying the trucks fast it’s a red flag.

5. Ask and investigate their attitude towards ethics and integrity. Will they always do the right thing? How do they treat the hard working drivers?

6. Ask them about their operations. Do they offer a single point of contact or are you left with dealing with “whoever” answers the phone? Do they have operations open 24 hours a day including weekends and holidays? Lastly do they have robust technology to aid in the tracking and managing of the freight as it’s on the road?

7. Most importantly ask your freight broker how they communicate. Are you left wondering what’s going on with your freight or are they keeping you updated every step of the way? Lack of communication and information indicates a freight broker really isn’t managing your shipment.

Moving forward,

Jeff Roach

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