10 Ways to Measure Freight Broker Effectiveness

10 Ways to Measure Freight Broker Effectiveness

by Amernesa Kelmendi

What is a Freight Broker?

Freight Brokers are an essential component of the supply chain for shippers and businesses everywhere, especially those looking to scale. They act as the middleman between shippers and carriers, communicating between the two and arranging for shipments. Shippers rely on brokers for the most efficient and cost-effective solutions. Choosing the right broker for you is essential for expanding your business! A high-quality broker will save your company time, energy, and money, allowing you to focus purely on business matters and operations. Below is a list of Freight Broker expertise.

Freight Broker Know-How:

  1. Laws/Industry Regulations
  2. Logistics of your Shipping/Supply Chain
  3. Industry Standards
  4. Booking/Tracking shipments
  5. Price negotiation/Working within a Budget

But how might you measure broker effectiveness? How do you know if the broker is a match? How do you ensure your freight is in good hands? We break it down for you with “10 ways to measure freight broker effectiveness”, so you can rest assured that you have found a quality logistics partner. Remember, not all brokers are created equally, so it is essential to consider the details of their operations.

1. Credentials & Insurance

Brokers are required to be licensed by the Federal Motor Carrier Safety Administration (FMCSA). Federal regulations say anyone who arranges freight transportation must carry a property broker license. To become licensed, brokers must have proper insurance and be bonded to protect shippers and carriers from fraud and illegal activity. Before working with a broker, reviewing their legitimacy and requesting credential details/documentation is essential. Do not hesitate to ask for their license and registration details and verify them on the FMCSA website. You have encountered a bright red flag if your broker cannot provide these important details! On the contrary, if your broker of choice can give these details, you are one step closer to partnering with a trustworthy broker.  

Not only are Freight brokers required to have specific credentials, but they are also required to have a bond of at least $75,000 to receive their license. The purpose of this requirement is to prevent poor behavior on the carrier’s part. It is essential to only partner with bonded carriers that have met all credentials set forth by the (FMSCA).

Responsible brokers prioritize adequate insurance coverage. You can verify their financial health by checking their D&B D-U-N-S number. Requesting to see their (COI) certificate of insurance will provide access to details on their insurance policy, keeping you informed during the decision-making process. 

The government requires that brokers comply with specific standards and regulations. Be sure to determine whether your broker complies with all regulations and standards before utilizing their services, and also check their safety rating. A “conditional safety rating” means the carrier or a driver has incurred multiple government violations, so consider this a red flag. Look to partner with brokers who have excellent ratings. 

2. History & Integrity

Brokers rely on their experience and carrier relationships developed over time to succeed. While shippers rely on brokers for their buying power and expertise. It often takes years to understand the ins and outs of freight shipping fully. As such, you should consider this factor. The more experience a freight broker has, the more peace of mind you can have doing business with them. Maintaining carrier relationships, adapting to industry changes, and maintaining operations during economic uncertainty confirms their position as effective broker.

Remember that partnering with an experienced broker can go a long way in ensuring the success of your business. Brokers that have been in business for a number of years are well-equipped to handle a wide variety of situations. On top of having the know-how to deal with challenging problems, brokers with more experience likely have stronger relationships with their carriers than newbies. Over the years, good brokers have built relationships with small, mid-sized, and large carriers and understand the importance and effects of excellent carrier relations.

As mentioned above, it is also wise to investigate how various brokers have handled times of economic uncertainty, such as during economic recessions, inflationary periods, and stagnations. This data will provide valuable insights into its strengths, weaknesses, and long-term stability. Lastly, consider the size of the brokerage you want to partner with. Brokers offer services to businesses ranging from small businesses to large corporations with complex logistics. The size of a freight brokerage does not necessarily reflect success but can indicate its capacity and scale of operations. Mid-size Freight Brokers are often great because they provide a winning combo of excellent customer service and the capability of adjusting logistics as needed.

3. Overall Value..$$

Deep carrier relationships are based on freight volumes, usability, and time. Carriers pass general rate increases (GRIs) to freight brokers and shippers annually. A top broker can absorb rate increases by leveraging market position and volume to negotiate a lower rate for brokered shipments. However, your Freight Broker must be financially stable to provide these quality services. The last thing your company needs is to partner with a Broker that ends up going out of business mid-shipment. Make sure to run a credit check on your Broker before signing a contract with them. A freight broker can grant you some of the best rates in the business.

The broker’s cost structure should be clearly outlined and easy to understand. Services should be defined, along with additional fees, service charges, fuel surcharges, detention fees, warehouse fees, etc, all disclosed upfront. 

4. The Right Service

Not every broker is created equal. While most freight brokers offer a variety of modes and services, specialization can be a selling point on whether to partner with one. Not all freight brokers can handle a cross-border shipment from the United States into Canada, for instance. Also, consider that the needs of your business may change over time. Partnering with a broker who can accommodate multiple modes of transportation initially is crucial to avoid switching brokers and reevaluating down the line. Having multiple transportation options will make it easier for your company to expand over time. 

Research brokers that can accommodate and manage various freight types and sizes ranging from small parcels to full truckloads. It is wise to partner with someone who has options. Freight Capacity is also a critical factor in choosing the right freight broker. Your broker needs to be able to connect with carriers with your carrying capacity, especially during peak seasons. The broker you choose will need access to suitable carriers with capacity for your shipment, experience shipping to your destination, and competitive rates. 

5. Insurance Options & Claims Process

Damage and loss are unavoidable risks of freight transportation. How your freight broker handles the claims process makes all the difference. You want to work with a freight broker who responds quickly to errors and helps you find easy ways to avoid freight damage and loss claims. An effective freight broker will also offer the option to purchase additional freight insurance. Some types of insurance include cargo insurance, contingent cargo insurance, freight liability insurance, Errors and Omissions insurance, and many others. Working with a broker to choose the appropriate insurance can help mitigate financial risks in transit. Review your coverage options carefully with your broker to understand the full extent of your coverage and what your shipment requires.     

6. Response Time & Reliability

Regarding response time, not all freight brokers are held to the same standards. Measuring a broker’s reliability is sometimes tricky without first finding out the hard way. However, you can look up the broker’s Better Business Bureau (BBB) profile. A high BBB rating can help you quickly determine if a freight brokerage is in good standing with its shippers, vendors, and carriers.

Choose to partner with a reliable freight brokerage. They should achieve on-time delivery for your shipment and follow through on their promises, including pricing. The brokerage should always maintain transparency about charges. Working with an unreliable freight broker can cost your business in the long run if you incur delays and unexpected costs due to a disorganized and unforthcoming broker.

Reliability is the backbone of the logistics industry and supply chain. If unexpected delays or situations occur during transit, your broker should be able to maneuver these unexpected difficulties easily. A quality freight brokerage will have many carriers to contact when needing a replacement driver or transfer. Look for a freight broker who has a proven track record of handling challenges well on short notice. 

7. Communication – the Key to Freight Broker Effectiveness

Look for a brokerage that puts a team to work for you. Like a superhero, every great freight broker has a backup. Your freight broker should be quick to return your calls and messages. And they should communicate via your preferred method, accommodating your requests. 

The freight broker you choose should be an extension of your shipping department, just a phone call or message away. Quality Freight Brokers always vet their carriers before contracting them and even monitor carriers throughout the process for quality assurance and credential maintenance. 

Collecting references and reviews from current customers is a great way to gauge a broker’s communication and effectiveness. Reputable brokers should be able to supply you with a list of clients with whom you can inquire about communication, pricing, and service quality provided by the brokerage. Researching will help you find a trustworthy brokerage that meets your needs and understands your business’s logistical complexities.  

8. The Human Touch

Customer service is the face of any major brand or company, including your freight broker. 3PLs and freight brokers understand the critical human elements of supply chain management, your industry, and the importance of maintaining your small business’s relationships.

Before committing to partnering with a freight brokerage, take some time to evaluate how they vet their carriers. Be sure to ask questions about the vetting process, how many active/approved carriers they work with, and how their reevaluation process works. It is essential to partner with a brokerage that takes the time to vet their carriers carefully and considers who they choose to represent. When brokers can ensure details about their carriers, such as expertise, insurance, performance safety, delivery, and pricing, you can rest assured you are communicating with a quality brokerage. 

9. Tracking

“Where is my freight?” That’s the daily question you’re tasked with answering for your end customer. The right freight broker will provide freight visibility. They should have a tracking system in place that helps you keep an eye on deliveries. Most freight brokers offer online tracking or will keep you updated via phone, email, or text.

From the beginning, communicate clear expectations and your shipping needs effectively with your freight broker. And you should be able to expect transparent communication with your freight broker in return. Working with a reliable freight broker means not having to chase down your shipment information; they have access to and can provide you with updates regarding satellite tracking and other pertinent information. As a result, you will be able to understand your shipment’s journey from A to B clearly. 

10. Technology 

Technologically savvy 3PLs offer an all-in-one online experience for shippers. Access to and managing your shipments online is essential, so choose a freight broker that gives their customers back-end access to their transportation management system (TMS). Brokers and high-volume shippers use TMS software to calculate freight rates and generate paperwork, among other functionalities. It’s a centralized platform for everything you’ll need regarding supply chain management.

TMS systems save you hours of research and money searching for the best match for your shipping needs. This advanced technology provided by logistics companies like FreightCenter makes it easy to streamline your operations and improve supply chain visibility. 

3PLs provide shippers access to the most cutting-edge technology. Not only will partnering with a 3PL like FreightCenter give you access to TMS systems but even to WMS (warehouse management systems), which allow efficient inventory management and warehouse space utilization, As well as other technologies, including Track and Trace technologies, Cloud Computing, Data Analytics, and much more. 

Find the Right 3PL for You.

Partnering with a 3PL gives you the benefits of both a freight broker and the knowledge of a logistics company all in one package! How can your business ensure the most successful outcome? By partnering with a third-party logistics company (3PL) like FreightCenter! Find the most suitable carrier for the best rates with our extensive network of carriers.

Refrain from letting freight weight confuse you or keep you from shipping your cargo. Let our experts answer your freight shipping questions by calling us at 800.716.7608. You can also use our free online quote tool!

Choosing FreightCenter

When you choose to work with us, you are choosing to make your shipping process seamless. Here are just some of the benefits working with our Third Party Logistics company will have on your shipping experience:

  • When you partner with FreightCenter, a premier 3PL (Third Party Logistics) company with over twenty-four years of experience within the logistics industry, you are choosing success. Over the decades, our team has dealt with nearly every shipment imaginable. There is no shipment process we cannot help you with!
  • FreightCenter employs a knowledgeable staff that is always willing to learn and grow with industry changes and advancements. We are ready to answer any questions you have throughout the entire process!
  • We act as the middleman between you and your carrier; you do not have to worry about playing phone tag with your trucker. Your agent will directly communicate with you and your carrier, delivering any necessary information or updates between you. 
  • We secure the best transit carrier and route for you at the best price. There is no need to spend hours figuring out the logistics or searching for a worthwhile deal. 
  • We make it easy to ensure your shipments by guiding you toward the best providers. Whether you need full or partial coverage, we have you covered!
  • We arrange the pickups and drop-offs while also making sure to track each shipment in transit. This ensures that you know where your packages are every step of the way! 

Now what are you waiting for? Call FreightCenter to set up your account and discuss your shipment. We are ready to answer your questions and provide solutions! Our team looks forward to partnering with you. 

When finding a 3PL that meets all 10 of these criteria for freight broker effectiveness, look no further than FreightCenter. With an extensive network of carrier relationships to leverage, expert shipping agents ready to handle your supply chain management, and the best TMS, FreightCenter is the most effective freight broker your small business could partner with.

Experience the FreightCenter difference with a free quote, or call us at 800.716.7608.

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