Everything You Need to Know About Freight Brokers

everything to know about freight brokers
Everything You Need to Know About Freight Brokers

When it comes to handling and shipping freight, there are a lot of moving parts. Choose the wrong partner and you could encounter costly communication issues, delays, or damages to goods. So, whether you’re a shipper with too little time or staff to maintain standards, or a freight carrier looking to increase your earning potential, you’ll likely benefit from working with a freight broker who can help streamline the supply chain. Here’s everything you need to know.

What Is a Freight Broker?

A freight brokerage, also known as a transportation broker, is a business that helps connect shippers with carriers to move their freight from one location to another. 

In essence, a freight broker is a matchmaker between shippers and carriers. They act as a middleman, facilitating communication between the two parties to ensure that both are on the same page and prepared to support the others' needs. They also help ensure that the handoff of goods between shippers and carriers goes smoothly. 

What Does a Freight Broker Do?

Freight broker companies provide a variety of services, including negotiating rates with carriers, tracking shipments, and handling paperwork and documentation. 

This entails:

  1. Improving delivery times. Freight brokers help businesses streamline their processes and improve delivery times. 
  2. Helping to Prevent Damage. Every damaged good is a sunk cost and (likely) an upset customer. Freight brokers can work with their customers to devise improved packaging methods to help increase the percentage of shipments that arrive safely and damage-free. 
  3. Increasing supply chain efficiency. From arranging pick-up and relaying in-transit updates to arranging recovery options and deliveries, a freight broker finds and oversees the best solution for the freight to reach its destination.

What Are the Benefits of Using a Freight Broker?

Whether you’re a shipper or a carrier, your business could benefit from using a freight broker.

Reduced Overhead Costs

A freight broker can greatly reduce your overhead costs in two key ways. 

First, they can offer extremely attractive pricing due to their volume buying power and close working relationships with many carriers. 

Second, freight brokers act as consultants, not employees. That means no hiring costs, employee benefits, or full-time salary to pay. 

Optimized Routes

As a shipper, you won’t necessarily know the optimal routes and strategies for transporting your freight in a timely manner. To eliminate those costly delays, a freight broker will work with carriers to optimize their route and put procedures in place to minimize any damage to your cargo. 

Scalability 

No matter what industry you're in, scalability can be challenging. Fortunately, freight brokers have experience helping shippers and carriers grow their businesses and can give actionable insights. 

Whether you’ve scaled too quickly and need help handling your logistics, or you’re looking to put the right processes in place ahead of scaling, a freight broker can offer support.

Ease

Freight brokers have the expertise to streamline your logistics. For shippers, that means working with a single point of contact from start to finish no matter how many carriers are moving your freight. For carriers, it means having a freight broker optimize routes, negotiate prices on your behalf, and minimize deadhead miles. 

Supplemental Insurance

Freight brokers can also provide supplemental insurance for shippers when their shipment value exceeds the carrier-provided liability coverage. This supplemental insurance is extremely valuable when there is loss or damage to a shipment to help ensure that a shipper’s goods are covered. 

Claim Assistance

In the event of a claim, freight brokers assist and advise their customers in filing the claim with the motor carrier. Loss and damage to shipments unfortunately do occur in the transportation industry and freight brokers have an understanding of the law surrounding freight claims to help consult a shipper in their cargo claim. 

What's the Difference Between a Freight Broker and a Freight Forwarder?

Freight brokers and freight forwarders are similar, though there are some key differences. 

As mentioned, a freight broker is a third party that helps shippers and carriers find partnerships that will maximize their profits while reducing headaches. They are a middleman that organizes the movement of freight, without ever touching any goods. 

A freight forwarder also arranges the transportation of shipments but is licensed under the Federal Motor Carrier Safety Administration (FMCSA) for both interstate and foreign commerce. In other words, they can arrange shipments under their own bill of lading and from country to country. Additionally, freight forwarders can provide warehousing for their customers where they break up or consolidate goods, route and package shipments, and handle the customs clearance process. 

So, while the freight forwarder is more active on the ground moving shipments, the broker manages the relationship between shippers and carriers.

What's the Difference Between a Freight Broker and a Freight Agent?

A freight agent is much more akin to a freight broker. In fact, they generally work directly with a broker. 

Their role is to build connections with as many shippers and carriers as possible so that they can help freight brokers make effective matches. They don't typically handle the nitty-gritty details of logistics, though, which is why they work for freight brokers rather than shippers or carriers directly. 

How to Find the Best Freight Broker Near You

If you're in need of transportation services, you may be wondering: "Is there a reliable freight broker near me?". Here's how to find the right one for your needs.

  • Get a quote. Ask around for quotes to find a broker that suits both your needs and your budget. 
  • Test their communication practices. A freight broker is meant to facilitate communication, so scrutinize their email communications and response times when making inquiries for a quote to assess how reliable they are. If this process goes smoothly, you can trust the partnership will too.
  • Check reviews and references. This is a great way to see how satisfied other carriers and shippers have been when working with a particular freight broker. You want a partner with experience and a proven track record. 
  • Ensure they are registered, insured, and bonded. Lastly, you'll want to partner with a freight broker that has all of its ducks in a row. 

Partner with DTS: The Full-Suite Logistics Provider for Your Unique Business Needs

Diversified Transportation Services (DTS) is a leading third-party shipping and logistics provider that can help with your freight brokerage needs. Get in touch today to speak with our team.

What Can DTS Do For You?

Whether you're a company looking to improve one facet of your supply chain, your entire supply chain, or simply looking for a transportation and logistics consultation, we can help.

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