4 Advantages of Choosing the New Freight Broker
Like lawyers and tax collectors, freight brokers haven’t enjoyed the best reputation over the years. Since the barriers to entry are fairly low there are many brokers out there who chase freight and source capacity solely from load boards and cold calling.
But a new kind of freight broker is emerging. These brokers are challenging typical stereotypes and recasting shippers’ views about the value a broker can provide. There are four essential differences that the new freight broker brings to the table.
1. Tapping Into Non-Traditional Sources of Freight Capacity
Specifically, sophisticated freight brokers identify the regular, scheduled runs of smaller, asset-based carriers and private fleets. Both types of carriers welcome opportunities to partner with shippers whose outbound schedules match their backhaul needs. The idea of partnering with private fleets is perhaps most surprising, but it shouldn’t be. According to the National Private Truck Council (NPTC), nearly two-thirds of the 662,544 private carriers in the U.S. have for-hire operating authority. Today’s top brokers are investing in technology to identify and document this hidden capacity. Small, traditional brokers simply don’t have the resources to do this.
2. Focus on Finding Capacity Rather Than Finding the Next Load
Rather than a “book the load, then worry about finding a carrier” approach, this new kind of broker is finding and documenting the routes and available capacity from asset-based carriers. When a shipper comes to them with a problem lane, they can then instantly match that need with available capacity in their database. The approach is based on an “if we build it, they will come” belief that uncovering ideal capacity—let’s say a backhaul on a daily outbound run—will attract shippers searching for reliable, cost-effective capacity.
3. Investing in Highly Sophisticated Systems
For many brokers, technology still consists of a multi-line phone and a rolodex. The new freight brokers are as much technology companies as they are freight companies. Sophisticated transportation management systems store data on available carrier capacity and then match that data with customer load demand. Systems are integrated with carrier quality scores and house other detailed data on carriers, such as insurance limits. These variables are part of an algorithm that identifies the best carriers to meet a particular shipper’s exact requirements. Partnering with a freight broker that has such a high level of customization and quality control can make a big difference in the quality of carrier service you receive.
4. Flexible, On-Demand Capacity with Asset-Based Reliability
New freight brokers can deliver flexible, on-demand capacity people expect from a broker, but with the reliability of an asset-based solution. That’s a real perception leap for some shippers, who believe you can get one or the other, but not both. A common misbelief is that brokers are middle men with little control over drivers, therefore service can be hit and miss. But because this new kind of broker has a different carrier sourcing strategy—one based on capturing the backhaul capacity on regular outbound routes—clients experience very high levels of service and reliability. Drivers tend to be higher quality, particularly when tapping into private fleet capacity. The average pay for private fleet drivers is about one-third more than in the for-hire sector. Private fleets report driver turnover of 12.8% (NPTC) compared to nearly 100% for truckload drivers at large, for-hire, non-union carriers.
A New Class of Freight Broker
The rise of a new broker class of technology-driven freight companies is causing shippers to take a closer look at the value brokers can deliver to their business. To learn more about how to leverage brokers for a more asset-based freight shipping solution, read the complete Strive transportation brief on The New Freight Broker.