Ten Tips on Selecting the Right Freight Broker

What's in this article?

Do They Hold a License, and Can You Verify that They Are Bonded?
Do They Support Many Modes?
How Many Years Have They Been in Business?
How Do You Believe They Could Enhance Their Communication Skills?
Get Everything in Writing, Particularly When it Comes to the Cost
What Criteria Do They Use to Choose Their Carriers?
Conduct a Check of Your Credit
In What Ways May Their Billing Department Be Improved?
Do They Offer Insurance Coverage for the Cargo?
References?
Conclusion

Ten Tips on Selecting the Right Freight Broker

There are differences between various freight brokers. Your company's success may be directly tied to the caliber and dependability of your freight broker.

Your broker will be a genuine business partner, and the two of you will become inseparable. It makes no difference how high the quality of your widgets is if you cannot deliver them on time, keep them in excellent shape, and sell them at a reasonable price to your clients.

Keeping this in mind, the following are ten tips that will help you choose the best freight broker:

1. Do They Hold a License, and Can You Verify that They Are Bonded?

The sector is presently devoting much attention and debate to this issue. In the fall of 2016, a new rule was enacted that increased the minimum amount of broker bonding required from $10,000 to $75,000.

As a result, approximately 10,000 smaller brokerage firms were forced to close their doors, accidentally driven over as an unforeseen result of the new MAP-21 law passed by Congress.

The Federal Motor Carrier Safety Administration is the entity that is responsible for issuing property broker licenses, and anybody who organizes transportation for a charge is required to get one of these licenses.

This requirement is imposed by federal law (FMCSA). Be aware of motor carriers that broker cargo but do not have the appropriate broker authority.

Check that they have the proper permission, license, and especially the new $75,000 bond before you choose a new freight broker to work with your company.

2. Do They Support Many Modes?

Take into consideration the geographic and operational areas in which a broker specializes. Do they have a national presence? International? Truckload and less-than-truckload (LTL) motor carrier service is provided by the majority of registered freight brokers.

Some organizations offer other services in addition to their primary capabilities, such as air freight, ocean shipping, warehousing, project cargo, and customs brokerage.

Brokers who can offer more than one service mode can compensate for capacity constraints in one mode by using other communication channels.

They may make your life a lot easier by giving a single source for shipping to businesses that are too tiny to afford their own logistics crew. This can make your life more breezy.

3. How Many Years Have They Been in Business?

Your trusted companion and the person who lives next door to you have recently launched a brokerage business out of their home, and they have promised to extend the good neighbor discount to you.

Numerous studies have demonstrated that survival is the sole aim that should be sought during the first two years of a company's existence.

Survival should be the primary initial focus of the company's activities. Companies that have been able to weather the Great Recession and emerge from it stronger have a track record of effectively implementing their strategies.

Their leadership is aware of what they should be doing. When selecting a broker, you should be sure to associate yourself with seasoned business partners who have been successful.

4. How Do You Believe They Could Enhance Their Communication Skills?

After some time, the broker and their drivers will represent both you and your firm in the marketplace. Their dispatchers will contact your clients to organize appointments, ask for directions, and coordinate arrival times.

You will communicate with them regularly through phone calls or emails to obtain status updates, make new orders, and so on. How would you rate their ability to communicate verbally and in writing? Will they represent you in front of your best customer in the way you would like to portray yourself?

Also, take into consideration how easily top management may be reached. When your very best customer calls you after hours or on the weekend to inquire about the status of that crucial shipment, are you able to get in touch with them?

5. Get Everything in Writing, Particularly When it Comes to the Cost

Always go for the cheaper option. Or is it? Be careful to receive a written quote that outlines any additional charges that may apply to a shipment, and make sure that it is in writing.

For air and ocean freight, such costs can account for as much as fifty percent of the total cost of the cargo, which is especially true for foreign relocations. In particular, be sure that you adequately express who will be liable for customs and taxes on foreign freight to your customer and the broker.

You do not want to be surprised by an additional charge like this one because duties and taxes can increase the cost of freight by up to thirty percent.

If not all of the prospective expenses down the line are made plain to you right off the bat, or if you obtain a quotation that is significantly lower than the others, you need to look through the statistics very carefully.

6. What Criteria Do They Use to Choose Their Carriers?

When choosing a broker, you need to perform your research, and the broker needs to do the same regarding his carriers.

What is their track record for safety, their reputation in the industry, how long have they been in business, what is the average age of their equipment fleet, and how many trucks and drivers do they employ?

You must make sure that you ask your broker penetrating questions regarding the screening procedure they use. Their carriers are going to switch places with yours very soon.

7. Conduct a Check of Your Credit

If it were a brand new and significant account, you probably would. Why not do it for an important collaborator in your endeavor? You don't want to learn too late that they have several tax liens against the government, are bankrupt, or have egregiously inadequate capitalization.

You do not want to find out after it is too late that they have grossly insufficient tax liens. How promptly do they make payments to their suppliers? Avoid at all costs dealing with brokers who have financial problems.

8. In What Ways May Their Billing Department Be Improved?

This has a lot more significance than it initially seems to have. Is the billing they provide accurate, comprehensive, and on time?

You definitely don't want to find out that bills are being manually written on carbon paper using an old Smith-Corona typewriter (for those of you who are younger, this was a popular brand back in the day).

If you want to charge your customers for the cost of shipping and potentially even make a little money on the transaction, you need to send your consumers accurate and timely invoices.

You definitely do not want to be getting notices of re-weigh and additional accessory costs several weeks after you have already invoiced your own client for them.

9. Do They Offer Insurance Coverage for the Cargo?

A factor that is frequently disregarded until it is far too late. In particular, while dealing with truck freight brokers.

Shippers often make the erroneous assumption that all trucks hold cargo insurance of at least $100,000 and that they are protected up to that amount regardless of their level of coverage.

LTL is considerably less definite. Make sure that your broker is willing to identify you as an extra insured on their general liability and cargo insurance policies, and that they can supply you with certifications proving that they have adequate coverage for both general liability and cargo.

Find out in advance how their claims process works, how much coverage costs, and what your deductible is (if there is one).

10. References?

Even though it might seem like an obvious question, a lot of people still miss this one. You wouldn't recruit a new employee for an important position without first contacting at least a couple of their references, would you? Your freight broker is just as crucial as any other factor.

Spend some time talking to a few of their references, especially people who work in the same field as you and who are located in the same region as you. What grade do you think they earned in the most recent competition? Are they receptive to one-off requests and concerns?

Is their size comparable to that of your company, and do they provide the degree of individualized care necessary for your enterprise's expansion? Right now is the moment to discover the answer.

Conclusion

It would be best if you always considered various things while selecting your freight broker. Though some may seem pretty straightforward, others might be missed. Keep all of the above in mind when choosing your freight broker to help you have the best experience.

At A-1 Auto Transport, we make it our business to stay up to date on the latest developments in the shipping industry. Contact us anytime to learn about our comprehensive range of shipping services.