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3 Challenges Freight Brokers Face Today

Freight. Piled up containers.

In the trucking and logistics market, freight brokers are essential players, and they face numerous challenges. A freight broker is someone responsible for brokering deals with shippers and then facilitating the movement of a shipper’s freight. The responsibilities of freight brokers are not limited to connecting carriers with shippers, but also communicating with both parties, it represents as well as tracking loads and verifying pickup and delivery. These days, keeping trucks at full capacity is only one of the many pain-points for the freight broker’s business process. This article addresses three challenges that freight brokers are facing today while also discovering how best to alleviate them. 

1. Finding and growing talent

One of the more common obstacles freight brokers face is having someone under qualified and underperforming in the front seat. The transportation and logistics industry in the United States is highly competitive, with a fast-growing and highly skilled workforce. Finding the right talent to accelerate your brokerage growth can be a challenging exercise; however, your business culture is created each day by its leaders and employees. Managing expectations in finding and developing a team is essential and plays a primary role in organizational leadership. Successful businesses understand that the right people in the right positions make the best teams. Providing a productive and healthy company culture can energize the employees you hire today and attract the talent you will need in the future.

See our blog on creating effective training models, or check out how our services connect with the right talent, culture, and price.

2. How to make the company efficient in light of constant margin pressures

This boils down to simply having better relationships with your customers, carriers, shippers, receivers, and knowledge of markets of tight capacity. Beginning with the type of customers your sales efforts are targeting; instead of focusing purely on phone sale conversions, which only allow for a 15-20% margin, it is better to research the seasons and times that a commodity is peaking or ramping up for production. This is where you will find a real need to solve your customers’ problems. For example, if you were targeting a company focused on construction in the United States, it is recommended that you do not spend a lot of time during the winter, as this is when construction and building materials start to decrease in production. Developing a great relationship with carriers would be the obvious thing to do; however, most freight brokers do not cold-call carriers, but are found instead on DAT (dial-a-truck) or Truckstop.com. Once you have the business, you must shift your priorities to targeting carriers that can offer capacity and execute at your customer’s SLA (service-level agreement). These same tools you would use to target customers (i.e., ZoomInfo, LinkedIn, Crunchbase), you would also use to find carriers with a home base near the receivers/shippers location. Let it also be known, the shippers and receivers you acquire also wield the power to decrease or increase your margin and the entire deal. Receiving an ideal appointment time, or getting loaded in less than 3 hours makes your load(s) easier to sell. Utilizing sales tools and experience to build a relationship with the shipper and receiver can be used to provide an ideal appointment time. 

3. Developing a healthy and growing carrier base

As a freight broker, you will always have a need for carriers on DAT or ITS, as spot loads are a great way to provide a higher margin. You may also find strides in receiving load tenders in advance, and pre-planning your carrier base. Having a healthy relationship with your carrier is an absolute necessity. As a freight broker, your carriers are an extension of you. The same rapport effort you provide your customer must be equally given to your carriers. Ensuring that you maintain a great relationship with your carriers and find common ground with them, can contribute to the longevity and durability of your own customer relationships.