With the ever growing truck capacity shortage, shippers are turning more and more to freight brokers to move their freight and manage their transportation needs. Some estimates show that as much as 30% of all the freight on the road today is being moved through a broker. Most brokers offer full truckload (FTL) services but others offer less than truckload (LTL), air and ocean cargo services as well.
The question is how do you know if you’re dealing with a reputable company that has your company’s best interest in mind?
Let this report serve as a basic guide or checklist when selecting a freight broker.
1. Be sure the Freight Broker is licensed.
Be sure the freight broker is licensed by the Federal Motor Carrier Safety Administration (FMSCA). If they are properly licensed they should easily be able to supply you with a copy of their Motor Carrier Authority which was issued upon licensing. In addition, you should ask them for their MC# and access the information yourself online at the website listed below to make sure they are still in good standing with the FMSCA.
http://li-public.fmcsa.dot.gov/LIVIEW/pkg_carrquery.prc_carrlist
2. Check their credit history.
If brokers do not pay their carriers and other vendor’s on-time they will not last long in the business! Avoid brokers with bad credit or financial issues because they are not likely to be around very long and will not be able to service your needs in the long-run.
Below are a few places you can access credit information for freight brokers.
www.creditexchange.com or www.compunetcredit.com or www.transcredit.com
3. Obtain the broker’s proof of liability and contingent cargo insurance.
This will provide a second level of coverage and protection for your company and each shipment a broker handles.
4. Ask them how long have they been in business.
Startup companies face the most difficulties in the first year or two. The likelihood of survival for service based businesses dramatically increases after this startup phase and freight brokers are no exception.
5. Ask to speak with customer references.
Written testimonials are great but there is nothing like spending 2-3 minutes on the phone with an actual customer contact. If any company you do business with, broker or otherwise, is unable to readily supply you with a short list of customer contacts…. proceed with caution! After all, if their customers are happy with their service why wouldn’t they want you to speak with them? Hint…hint…
6. Evaluate the broker’s carrier qualification process.
Like any industry there are good companies and there are bad companies and transportation is no exception. Ask for an explanation of the broker’s qualification process. Do they verify that each carrier has the correct and active Motor Carrier Authority? Do they check the carrier’s safety rating via the FMSCA website on a regular basis? Do they verify the carrier has the proper insurance coverage for every load? Do they track carrier performance standards like late pickups and deliveries, damaged loads or driver complaints? Is there a written contract on file with each carrier? The more due diligence and tracking a broker does the better your service will be in the long-run.
7. Evaluate the broker’s carrier selection process.
Are they a “post and wait” broker hoping that one of the online services they post their loads to will generate a call or have they formed successful partnerships with carriers of all sizes? Online services are not enough to insure customer satisfaction in the long run so brokers that have relationships with large carriers and private fleets that are very selective of who they deal with can offer a huge advantage.
8. Can the broker handle your distinct needs?
If you need flatbeds and the broker specializes in hazmat loads they are probably not a good choice for you. Like the old saying…..”fit the glove to the hand.” Just because a broker is great at doing rail loads doesn’t mean he will be good at handling your full truckload freight and vice versus. Make sure they have the necessary experience to handle your specific needs. “Jack of all trades and master of none” is not what you should be looking for in a broker.
9. Evaluate the broker’s freight management process.
Communications between the broker and carrier is crucial to insure that freight picks up and delivers on-time. What is the broker’s process for insuring that loads pickup and deliver on-time? Do they communicate verbally and in writing with each carrier to insure accuracy? Are they scheduling the pickup and delivery appointments or do they leave it up to the carrier? Do they speak directly with the drivers when dispatching in order to maintain control? These are a few of the little things that good brokers do to offer superior service.
10. Are they members in good standing of the Transportation Intermediaries Associations (TIA) or other integrity programs?
These organizations hold brokers to a higher standard of ethics when dealing with both carriers and shippers. Members also have access to the most up to date industry information which allows them to best serve their customer’s growing needs in an ever evolving industry. Visit www.tianet.org for more information.
A service minded freight broker can be a valuable asset to virtually any shipper.
Logistic Dynamics
Companies of all sizes have incorporated freight brokers into their supply chain as a way to save both time and money when it comes to transportation management. The key is finding the “right” freight broker for your company.
Logistic Dynamics, Inc (LDI) is a leading third party logistics provider which offers reliable and cost effective full truckload, less than truckload and intermodal rail/ocean/air services throughout the United States, Canada and Mexico.
If you have questions or would like more information go to https://moonlightcustomlogistics.com/contact-us/ or call today!
