Freight brokers act as intermediaries in arranging freight transportation between shippers and motor carriers. The freight broker receives a commission for his matchmaking skills. Freight brokers are also known as trucking brokers, transportation brokers, property brokers, and third-party intermediaries.
While the business concept in merchandise brokerage is very simple, there are many details and procedures that must be mastered. The broker needs to know what to do, when to do it, how to do it, why it is being done and with whom to do it. Since this is a service-oriented business, it only makes sense to meet the multitude of demands and requirements, especially in light of the fast-paced environment that seems to be increasing more and more.
While actual “on the job” experience is the best teacher, it is difficult to find brokers willing to hire new agents. Formal training with qualified people who have real brokerage experience helps put everything in perspective for the beginning broker. As a result of using a good mentor, the new broker not only gets hold of the tools of the trade, but also takes note of confidence.
With that said, let’s take a look at a typical day in the life of a freight broker.
After the freight broker has made a lot of phone calls to potential customers, they should have maybe 20, 30, 40 or more senders in their database. The initial information that each broker will collect will be of a general nature: what type of cargo is the sender’s shipment, where are the normal pickup and delivery points, what type of truck is required, etc.
1. With a customer base in hand, the broker will want to start ordering by making phone calls to shippers early in the morning, perhaps 7:30 a.m. M. At 10:30 a. M. finishing touches to your needs. Basically the broker asks if the shipper is looking for trucks on that particular day.
If the answer is “No”, the runner goes to the next and the next. At some point, the broker hits a “hot” one (or several) and that’s when the action begins.
Once the broker has “proven” himself, the sender will actually initiate calls to the broker rather than the broker always calling the sender. And the shipper may want to work more proactively looking for trucks 3-5 days rather than just day-to-day.
2. Once the shipper has a load for which they need a truck, the next step is to take the shipper’s order. The sender will go into detail about what is required. Any doubts the broker has should be clarified immediately. It is imperative that the broker communicates the correct information to each truck driver or dispatcher when they start calling.
3. The broker will then calculate an estimate of the rate needed and contact the sender; or the broker will simply ask the sender what they want to pay. After some calculations, the freight forwarder will get an amount that he will offer to the truck. The ideal starting point is to get at least a 10% profit margin on every load.
4. The next step is to publish these loads on the Internet load tables. There are numerous cargo boards where loads are placed, as well as truck searches that can be performed.
5. After these loads have been posted, the broker will go to their database of available trucks. The broker will then call each carrier to see if they have a truck available. Meanwhile, the broker may be receiving incoming calls from people who are responding to posts on the upload boards.
6. At some point, the broker is looking for the driver or dispatcher who will say “Yes, I want the load.” Sometimes the broker can’t find a truck. This is not like shooting a fish in a barrel; however, with experience and winning repeat business, the broker will “cover” more and more loads.
7. Once the broker receives the “Yes” from the carrier, they immediately call the sender to inform them that the cargo is being reserved.
8. The broker will fax your installation package to the carrier. While the carrier processes the agreement and other documents, the broker will check the carrier to make sure it is properly licensed and insured. This is done over the Internet or over the phone.
9. The last item sent to the carrier is the “confirmation”. The carrier must immediately sign and date this document and fax it to the broker.
10. Once the broker has this confirmation in hand, the broker will want to call the truck driver if the driver himself has not called the broker. The details of the load are given to the driver along with the instructions. For example, the broker will ask the driver to call when they are loaded and when they are empty or if there is a problem. The broker will also ask the driver to call at least every morning if it is a multi-day trip. These are important requirements that every broker must be ready to implement.
11. Once the cargo is delivered and the carrier has informed the broker, the broker will want to call the shipper to report the status.
12. Any delivery issues that may include missing parts or damaged cargo must be discussed between the shipper and the carrier. Sometimes the runner intervenes; however, the broker is never responsible for damage or missing parts unless the broker is negligent.
13. Finally, with the cargo delivered safely and in a timely manner, the broker is ready to go through the process again and again.
While this routine may seem casual and boring at times, this is not the truth. Most of the time, the broker will experience a good performance. However, there will be times when problems will arise: late deliveries, failure of the carrier to pick up a load, damaged cargo or missing parts, long delays in picking up or delivering the cargo, all of this needs to be resolved by the broker. .
It is impossible to avoid problems, but it IS possible to stay alert and ready to proactively deal with problems. If the broker works hard and smart for the shipper, if the broker deals honestly with the truck and pays them on time, the broker is well on its way to a successful venture.