Companies that want to get their products to market often seek help from third-party logistics (3PL) providers to get the job done. Freight brokers are a popular choice. A freight broker is a person or company that connects a shipper who has goods to move and a motor carrier who can move them.
Brokers help carriers fill their trucks, a service for which they earn commissions. And they help shippers get their products to the marketplace by putting them in touch with reliable carriers. As a matter of fact, it’s not unusual for a company to use a freight broker as the acting traffic department, coordinating all of the company’s shipping and transportation needs.
Freight brokers have been around almost as long as the trucking business,
dating back to the early 20th century. However, prior to the 1970s, government regulations were so restrictive that there were very few brokers doing business. But since then, regulations have eased dramatically, creating new opportunities in this sector of the 3PL arena.
At the most basic level, a freight broker serves as a liaison, an intermediary
between shippers and carriers who often have different wants, needs, and requests. A freight broker’s job is to make sure differences don’t become obstacles.
To achieve that, a broker performs a variety of tasks
To start with, the broker collects all the necessary information about the
freight—basic location and contact information, special packing or handling instructions, compliance standards, equipment, and consignee preferences.
Once all the information is in hand, the freight broker negotiates freight rates and schedules pick-up and delivery times with a qualified carrier chosen from a network of trucking companies the broker has carefully vetted to ensure reliability.
When the order is ready for pick-up, the broker double-checks the driver’s information and provides him or her with pick-up details.
The broker makes sure the loading process is done right, all freight has been put on the trailer, and the carrier has signed the shipper’s Bill of Lading.
During transit, the freight broker maintains regular contact with the carrier to keep track of the shipment. Sometimes this contact includes providing the driver with driving directions or communicating any hurdles along the way, such as traffic or weather delays.
Once a driver has reached the delivery destination, he or she documents the arrival time, the truck is unloaded, and the consignee signs the Bill of Lading.
Finally, the broker collects the paperwork to be turned in by the carrier so the shipper can be invoiced, and the carrier’s payment cycle can begin.
Supply chains are evolving rapidly due to changing technology. And things were probably already complicated enough. Many shippers have finite resources to spend on fostering relationships, overseeing loads, and handling claims. A freight broker will keep up with industry trends, new technology, and new laws and regulations. So you don’t have to.
Freight brokers spend years building relationships with carriers and shippers, so they can often capture lower rates, or help negotiate away unnecessary fees.
A broker can evaluate your freight business and find ways to reduce costs and improve delivery accuracy, efficiency and safety. All things that are good for your bottom line.
Broker are also adept at handling claims for lost or damaged goods, or other issues can prove frustrating.
Is a freight broker the same as a freight forwarder? No. Here’s how to tell the difference:
Can a freight broker and a freight forwarder come from the same place? Yes. This place:
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