Redwood Blog

Are Your Truck Brokers Old-School?
5 Questions to Get the Answer

There are 16,000 U.S. truck brokers. The vast majority offer little to no technology and rely on posting boards to source capacity. They’re stuck in the past and, if you continue to use such brokers, you’re stuck with them.

Is Your Broker Old School?

A new class of truck brokers has emerged that provides an alternative. They leverage technology to intelligently match your load demand with freight capacity hidden to most other brokers. Instead of providing shippers with a tactical solution for spot freight needs, these brokers are becoming strategic partners for capacity management. In the process, they are transforming shipper perceptions about the value a broker can deliver.

To determine if your partners are old-school versus modern truck brokers, ask these questions:

1. What is your process for selecting carriers and how will you reduce my risk?

What value do brokers add if all they do is source capacity through truck posting boards? Heck, you could do that yourself. Modern brokers leverage technology to select carriers that precisely match your requirements. Their transportation management system contains data on each carrier, including tracking criteria such as years in business, safety performance, and insurance limits. This allows the broker to dynamically match your loads only with carriers who meet your requirements, which reduces your risk.

2. Can you demonstrate quality performance with large, discriminating shippers?

Modern freight brokers that are in it for the long haul will be able to answer “yes” to this question, with examples of projects and awards they have won. It’s critical that you insulate your company from inexperienced brokers that can damage your reputation.

3. What is your pricing methodology?

They may not even have a methodology. They may simply rely on “Joe in the purchasing department” to set rates. Look for partners with a robust pricing tool loaded with detailed analytics on market data, economic trends, and historical pricing. If your broker lacks a technology-aided pricing methodology, your rate will be the product of guesswork.

4. Can your capacity scale to meet urgent and unpredictable demand spikes?

Most brokers are small outfits with limited resources and small carrier networks. To meet the dynamic needs of your business, you want a broker with the resources and network to cover all your loads from key origin points, even during peak shipping times. Ask about:

  • • Depth of in-house resources to manage a large volume of bookings
  • • The size of the carrier base
  • • Examples of high-volume projects they have handled

5. Can you deliver the reliability of an asset-based solution within a freight broker model?

This is the question that will really separate modern freight brokers from the posers. What all shippers would love from freight brokerage is to get flexible, on-demand capacity without sacrificing the dependability of an asset-based solution. Well, modern truck brokers can deliver both benefits simultaneously. They do this by first identifying the market’s hidden capacity:

  • • The regular runs of smaller, asset-based carriers looking to fill empty backhauls
  • • The unused capacity of private fleet operators, who must operate like a profit center, leveraging empty capacity to generate revenue

Using intelligent systems, modern brokers document the routes and available capacity from these asset-based carriers, and then match that hidden capacity with your load demand.

Leveraging Truck Brokers to Achieve Competitive Advantage

Freight brokers are typically viewed as tactical suppliers – a necessary evil to cover unplanned freight needs. But modern brokers are helping to change this perception.

Use the questions in this post to determine if your current brokers are seeking to maximize revenue for short-term needs or if they have invested in the systems and processes to build long-term, mutually profitable relationships.