Why are we better customers, than shipper clients?
A broker is a shipper to a carrier because he controls the freight and the money. He is the carrier to the shipper because he provides the truck. A broker partner for a carrier is a good business choice.
Most brokers are sales driven companies. The third party has that expertise while many carriers are focused on motor carrier service; delivering the freight, dealing with drivers and safety. Often their “dispatcher” is a retired truck driver. These employees have great road savvy but not much office experience, or customer service skills. They are seldom sales types.
Some broker partner benefits are:
1. Provide a professional dispatch service.
2. Provide trained sales support for growth and retention of business.
3. Provide a customer service department to include freight booking and pricing.
4. Provide financial support to include freight bill factoring (quick pay) and driver advances.
5. Provide business management services to include asset dedication, equipment allocation, market penetration, and technology development,
Often a carrier might purchase or lease equipment to service a broker-client account. He may assign drivers to specific lanes. This arrangement is very efficient as the same driver does the same thing every day. The cost of the service is reduced, and those savings are passed along to the consumer client. Whenever this type of carrier- broker partnering occurs; it is a condition that shows the best scenarios our industry has to offer. Each partner gets what is needed, each is crucial to the success of the other. The consumer client is the last beneficiary and the one that tells the tale. If he’s happy, our industry is happy. If he is mired in high freight prices or service failures, he cannot compete himself, and everyone loses business.
The financial opportunities abound in a broker carrier partnership. The broker better have enough financial resources to pay the carrier before he gets paid. Often that is not quick enough. A broker can charge interest on a quick pay arrangement. This is preferable to the carrier partner having to go to a financial institution to borrow the money. A factoring company will buy the freight bill for 3-5% markup. This gives the carrier cash he needs but is very expensive. If the bill goes into collection; the carrier has to buy it back for a penalty. If he hauled for his broker and if the broker had a “quick-pay” set u; the interest might be 2%. If the brokers client goes into “collection” that’s his problem not the carriers. Also, many brokers have a “driver advance” option., There is a small cost to this service because of the extra people and accounting involved.
To some carriers the financial resource is the greatest benefit to a broker partnership.