How a Carrier Can Find an Ideal Broker: Ask 3 Questions
Why should a carrier work with a broker in the first place?
Many carriers who work directly with shippers may ask this question. We’ve addressed this question in depth on our blog post here. To quickly summarize it…
Carriers get access to a vast network of shippers through brokers without the work of trying to find it themselves. This saves a massive amount of time for the carrier, and results in more loads overall. Carriers save money by avoiding costly fixed-price contracts with shippers.
Unfortunately, not every broker was made equal. The cons of working with a bad broker far outweigh the pros listed above. The risk of trying to find a good broker only to find out that they aren’t up to par can cost a carrier big time. To keep themselves safe, there are three questions every carrier needs to ask themselves before jumping on board with a broker.
1. How long has this broker worked with carriers in their network? How many of their carriers have been with them for a long time?
A broker can promise to the moon and back that they’ll get you the best loads for the best rates. If they haven’t delivered on that promise in the past, however, there’s a big chance they don’t actually know what they’re doing. Intentionally or unintentionally, their inexperience can put you at risk. From unfair rates due to miscalculation, to unsafe loads due to lack of knowledge - you’re likely to be burned by brokers that don’t have a proven track record. Even brokers who have been around for a long time may not be the best choice if they can’t show you that they’ve worked with other carriers in the long term. High turnover rates between carriers and a broker are almost a worse sign than inexperience - it makes you wonder why they would leave in the first place, especially with a broker that should “know better”.
2. Is this broker properly insured?
Sometimes in life, problems can’t be avoided. Anyone with common sense knows this. A good broker will be insured for any emergencies that arise. This includes, but is not limited to, property and general liability, vicarious auto liability and umbrella, worker’s compensation, contingent cargo, and errors and omissions coverage. Make sure you receive proof of each of these types of coverage from your broker before working with them.
3. What method does this broker use to calculate their rates?
The most common problem a carrier has with a broker is unfair rates and unpaid work. Any broker worth a carrier’s time will use some type of TMS to calculate unbiased, fair rates that work for both the shipper and the carrier. These should take into account many factors including season, supply and demand, natural disasters, location, gas prices, and total length of the trip.
With an advanced TMS a broker can also take into account what lanes match up best for your network in order to ensure continuous moves and minimize deadhead. A top tier broker can help you optimize the use of your equipment so that you reach maximum profitability.
You don’t have to look far to find a good broker.
Redwood has been in business for almost a decade, insures against all major emergencies and damages, and, best of all, our rates are determined by historical cost data and pricing algorithms to ensure that they are fair and not just a result of guesswork. You can give us a call at (773) 342-5780 anytime to speak directly with a dedicated carrier expert.