Have you ever asked yourself, “What is a freight broker anyway?” Well, to break it down, the freight broker is pretty much a matchmaker between the shipper and carriers.
When a customer or company needs to ship something, they pay a freight broker to move the freight. After the company pays the broker to move the shipment, the broker then turns around and finds the best company to do the move for them.
According to a recent DHL report on supply chain trends, the opportunity for carriers to streamline and enhance their working relationships with the shipper using technology has increased.
“The biggest opportunity is in the emergence of digital freight platforms that create online marketplaces that quickly and efficiently connect shippers with carriers, streamlining processes, optimizing costs and expanding the available options,” DHL Supply Chain North America observes.
With more and more shippers and carriers choosing to work through brokers, 3PLs provide the ability to help them manage their business, their online systems, and load-tracking marketplace. With that being said, logistics providers are bringing on more and more technology and are among the earliest adopters of automated load matching technologies. A brokers whole business model is based on them being able to manage the working relationship between shippers and carriers.
Brokers have been around for a long time, but prior to 1970, restrictions on brokers made it really hard for them to survive as businesses. But in the 1970s, regulations started to ease up and made it easier for brokers to start up and provide third party logistics help to companies.
As a broker, a lot of what your job entails is the logistics of shipping. In the role of a broker, you are negotiating rates, and you will be getting updates on deliveries and pickups. Brokers also have to make sure everything is in accordance with laws and procedures set by the state, even including procedures within the broker’s own companies.
When it comes to a broker’s customer, they all have certain ways they want things done, a list of things they have to worry about and other tasks that take their attention away from tracking their shipments and getting rates from carriers. This is when a freight broker thrives; they are able to take tasks off of the customer/shippers plate so that the shipper can handle other duties while their shipments are being taken care of.
A 3PL (third party logistics) has many benefits and reasons why companies use them. Brokers:
- Bring expertise in the transportation world.
- Provide constant communication with the driver and real-time updates to the customer.
- Handle issue management when something goes wrong with the truck, weather, schedule, and or accidents.
- Vets the equipment, drivers’ insurance, and other certain qualifications the driver needs to meet in order to carry a load for the customer.
- Can also take on the responsibility and cost of owning and paying for GPS tracking technologies.
“Transportation intermediaries leverage their knowledge, investment in technology and people resources to help both the shipper and carrier succeed,” – Robert A. Voltmann, President & CEO of the Transportation Intermediaries Association.
When a freight broker helps a company with their day to day operations of shipping, they are allowing that company to focus on other ways they can grow their business.
Account Manager, C.L. Services