March 21, 2023
Working with a freight broker might seem challenging initially. There are many brokers out there and choosing the best one for your needs can be a learning curve. Beyond that, negotiating can be tricky — especially when you’re new to the industry.
We’ve pulled together our top tips for working with freight brokers, including how to communicate with brokers and negotiate the rate you deserve.
Understanding what brokers do and don’t do will help you get the most out of the relationship. Brokers help shippers with loads ready to haul by finding carriers qualified to move the load. Not only do load brokers connect carriers with shippers, but they also facilitate communication between both parties by tracking the shipment of the load and verifying when it’s picked up and delivered.
Because brokers are responsible for ensuring that the load arrives on time, according to plan, and in tact they can be selective about the carriers they choose to work with.
You can find a broker by word of mouth, on the internet, or by using load boards. Asking the right questions will help determine if the broker is a good fit for you and your business. Some questions you may want to ask include:
One of the first things you might want to ask your broker is how long they’ve been in business. It’s recommended that you look for a broker or brokerage that has been in business for at least four years. Working with established brokers will help you benefit from their experience, relationships in the industry, shipper contacts, and customer feedback, which you can use to improve your business.
Next, you’ll want to determine that the load brokerage you intend to work with has established how they communicate with carriers. As an owner-operator or small fleet owner, you can’t always predict how outside elements, like traffic or weather, might affect the delivery. You can minimize surprises by working with a broker that communicates throughout the delivery and pick-up process. A good broker will provide you with all the information you need to haul a load and establish how you will be matched with loads in the future if you should work together again. Ask the broker you work with to provide a straightforward process for pick-up and delivery so you can have a transparent partnership.
Brokerages come in many shapes and sizes, from large enterprises to small businesses, and each has its benefits. Big brokerages can access more resources and take on new relationships with carriers daily, but they can let them go just as fast. Smaller brokerages may not have as much day-to-day business, but they may focus more on relationship-building with trucking companies. Consider your business needs and choose a based on how well they fit those requirements.
Finding brokers you can trust is essential to success in the trucking industry. Properly vetting your load broker will help you build trust in the relationship. Below are some ways you can do this.
Ensure that your broker has proper licenses, documentation, and insurance. Freight brokers need several licenses to operate their business legally. These licenses include registration with the FMCSA and a broker bond or trust. To get optimal outcomes from your relationships with brokers, always double-check that they meet these requirements and are in good standing.
The broker you choose should have some training and experience in the business. Freight brokers usually take online courses or in-person training through freight broker training schools. Brokers with training and experience in the industry are best equipped to help you and your business.
Read reviews from carriers and shippers who have previously worked with the broker. Reviews indicate the reliability and professionalism of a load broker.
You don’t want to risk not getting paid or getting paid late on a load. Save yourself the hassle of filing a claim later on by researching the broker’s credit and history. Run a credit check on any broker you work with to ensure that they are financially sound and in good standing.
Also, look into how many days it takes them to pay carriers and if they ever defaulted on a payment. Many factoring services can do this for you, or you can run a credit check yourself before starting any partnership with a load broker. Again, research and communication will help determine if a broker is too risky.
Educate yourself about the market to improve your chances of reaching a win-win deal with the broker. The more information you have when speaking with a freight broker, the better positioned you’ll be for negotiating on load details.
Always compare any offered rates to the spot market average and try to negotiate for a better rate. If there are lots of loads and fewer trucks for the lane you want, you have the upper hand in negotiating for a better rate because trucks are in high demand. The reverse is also true; if there are more trucks than loads on the lane you want, you’ll get lower rates and have less wiggle room for negotiation.
Knowing the most up-to-date data for your market is important when speaking with brokers. Learn about the cargo, demand, availability of trucks, and current rates at the origin and destination of the load. Reading trade publications and economic reports will give you the background information you need to negotiate with brokers confidently.
Finding a freight broker that is right for your business can be challenging. If you want access to loads from top industry brokers, regardless of your size or years of industry experience, consider partnering with SmartHop.
See how SmartHop can help you maximize your profit potential with every trip to build a healthier trucking business.