The Value of a Freight Broker in Today’s Unprecedented Times

Recent events in the market, due to the pandemic, have brought to the surface some frustration around the broker-carrier relationship, especially around the topic of freight rates. This commoditization of freight brokers, brought on by a few, is misleading and dangerous.

Having 20+ years under my belt in this space, I’d like to share my top 3 reasons why a good freight broker relationship is more important now than ever:

1. Playing the bank – Historically, freight brokers have always acted as the bank between carriers and shippers by floating cash. That is true more now than ever.  If there is one sophisticated item in our industry, it’s the speed and clarity of information surrounding freight broker service and payment history. No one can deny the importance of a great credit score on the load boards, for example.

Cashflow for most 3PLs has taken a pretty big hit primarily due to shippers paying sporadically (because clerical is working remotely and checks are now cut less frequently) or even worse, they are having a difficult time staying in business. In either case, the broker has the responsibility to keep up with making timely payments. A reliable broker with a good credit score is as important as ever and can make all the difference for cash-strapped carriers and shippers.

2. Rate Pressure – It has been argued that there are brokers that are still charging customers pre-Coronavirus rates, but paying carriers Coronavirus rates. If that’s happening, there is no quicker way to lose an account. Most shippers are being called on by freight brokers/carriers at least a dozen times a day, especially now. Fair pricing by brokers is critical: you do not want to be the broker that has to explain why your rate is several hundred dollars above current market rates.

3. Service Pressure – The only thing that can help you lose an account faster than not passing on the savings to shippers, is providing horrible service now when there are 10 trucks to every load. Most shippers understand the value of good service. A good freight broker helps guide the decision-making process with the shipper to justify an incremental amount more in exchange for the best service available.

At the end of the day, whether you’re a shipper or carrier, a trusted freight broker will there for you as a reliable partner.