Freight brokers are an important link in the consumer goods supply chain. They’re the go-betweens linking supplier with destination, bringing freight that needs to be shipped to its final destination. They not only connect shipper with carrier, they take care of negotiations, deadlines, payments, and solve any problems that may occur en route.
Using a freight broker is not a necessity in the shipping industry but many shippers prefer to because doing so gives them more time to concentrate on the daily functions of their business and less time on shipping details.
Those details can be many and the road can be unpredictable (breakdowns, weather, unexpected traffic) so how do you know you’re choosing a freight broker that can handle it? The answer: Do your homework!
- Check credentials. They should be licensed through the FMCSA (Federal Motor Carrier Safety Administration). You can go here to find out if they are. Through the licensing procedure, they will be required to be bonded and insured. The insurance is for property damage and the bonding is to protect you from fraud or other illegal activities by the broker.
- Look for a broker with experience shipping the types of freight you have and experience shipping to the areas you need it delivered. They will better understand the challenges of your sector of the industry.
- Make sure they have the right insurance. Just because they’re insured, it doesn’t mean you’re going to be covered if there’s a problem. They should have general liability insurance as well as adequate cargo insurance to cover the freight they’ll be shipping for you.
- Ask about their procedures for vetting their carriers. They’ll be entrusting them with your goods so make sure your potential broker does his or her due diligence to make sure that drivers have plenty of experience, are fully insured, have excellent safety records, use well-maintained, reliable equipment, and if they have enough trucks to handle the job.
- Look at other certifications and affiliations. Most good freight brokers will be part of the TIA (Transportation Intermediaries Association) and you should check their standing with the Better Business Bureau as well.
- Check the technologies they use. They should be using a thorough tracking system that uses GPS to track shipments in real time. They should also use up-to-date billing software. After you’ve signed a contract is not the best time to discover they do their bookkeeping in pencil in a ledger and send out handwritten bills.
- Run a credit check. Avoid brokers with bad credit. You don’t want someone with liens, bankruptcies, or who are slow to pay to be the one in charge of negotiating your deals and paying for your shipments.
- Be completely clear with them on the What, Where, When, and How of your shipping needs so the broker knows if he or she can handle the job.
- Look for experience in the industry. Freight brokering is a growing field so many freight brokers are new but the longer they’ve been in the business, the more contacts and relationships with carriers they’ll have.
- Check references, preferably ones in your area who ship similar freight to yours. Be sure to ask pertinent questions about the broker’s ability to make on-time deliveries, how the broker handled any problems, and how satisfied they are with the freight broker.
- Find out if they work internationally. You may only ship in the States now but what happens if you get some new customers across the pond? If your broker only works nationally, you may have to go through the whole vetting process again for international shipments. Save yourself some time and go with one that will help your company grow.
- Look for good communication skills. Your freight broker and dispatchers will be negotiating and dealing with customers on behalf of you and your company. They should be clear, articulate, friendly, and knowledgeable.
- Get it all in writing. Make sure that when you find the right freight broker, you get a detailed written contract.
Taking the time to find the right freight broker is well worth the extra effort. After all, you’re entrusting them to make a fair deal and to get your freight to where it needs to go safely and efficiently.
Direct Freight Services is a vital tool used by shippers, freight brokers, and carriers alike. It includes a thorough, easy-to-use and up-to-date load board that keeps freight on the move. Sign up today at Directfreight.com and see you Direct Freight can start working for you!
Sources:
https://li-public.fmcsa.dot.gov/LIVIEW/pkg_carrquery.prc_carrlist