Utilizing a freight broker's services could be the cost-saving method you need most to ensure maximum optimization, cost savings, and to understand your delivery network better.
Sometimes it's a current provider who doesn't deliver on time or an asset-based company with trouble adjusting to supply chain hiccups—such as a sick driver or an over-committed fleet.
Your broker specializes in solved dependability issues, and they work for you to minimize missed or late deliveries. A freight broker ensures your transportation network works better for your customers and your specific needs at uncompromised quality. Hopefully, business is booming, and you are looking to add another transportation provider. This is one of our favorite reasons to work with clients because it's all about growing your organization using this positive momentum.
Working with a freight broker during this time can help you capitalize on your growth and success. Freight brokers are also experts at optimizing different modes of shipping to find the most economical method while ensuring timeframes are protected as well. These three questions are the most important to lead within your initial conversations:. Financial stability means reliability and a better guarantee the company will be a viable partner in the long-term.
Surety bonds protect your company if there's default on a contract. This is essential protection. A broker can also be a legal safety net for a shipper. Confidence in your vetting process and the partner you subsequently choose is paramount to your cost savings and success when utilizing a freight broker — or any transportation provider. Found on the upper right hand corner of your invoice.
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Performance Performance. The responsibilities of a freight broker are not limited to connecting carriers with shippers. A freight broker earns money by moving freight for less than his customer is willing to pay to ship the freight. This difference creates a profit for the freight broker known as the spread.
They are paid x amount by a client to find a carrier to haul a load which they pay for y amount. The difference is what the freight broker earns. Keep in mind this is a base salary average without any of the commission or bonus included. Location will also play a tremendous factor in dictating freight broker salary. The agent's customer base may not work with a small broker, but would work with a freight agent knowing it is protected at a higher level by the freight broker the freight agent is representing.
The freight broker provides the freight agent with a long standing asset motor carrier relationship and contracts that are available for leveraging to provide shipper solutions on day one. Simplifies the business for the freight agent by covering so many items they would otherwise have to operate, pay and worry about if they were a stand alone entity. The freight agent rides the pricing power leverage the larger freight broker can obtain for the agent, thus driving greater profit.
Conclusion on the Difference between a Freight Broker and a Freight Agent So, unlike the go or no go questions brought to light in our 10 Tips How to Select Best Freight Broker for Your Company article on developing a business partnership with a particular freight broker, the answer to the freight broker or freight agent is not a yes or no decision.
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