Do All Freight Brokers Actually Do the Same Thing? Is There Really a Difference?

Posted by Port City Logistics on Nov 18, 2021 12:57:20 PM

For all of the various modes and options available for freight transportation, there are almost as many service options available from freight brokers. Brokerage services have stayed essential to domestic and global freight transportation for decades, and their impact continues to grow. As highlighted in a report by MarketWatch, the “Global Freight Brokerage market size is estimated to grow at CAGR of over 4% with USD 41.60 billion during the forecast period of 2021-2025.” With this much impact already seen and this level of growth predicted, it is easy to see why brokers remain an essential part of the modern supply chain network. But, what do freight management experts in a brokerage do, and what real difference exists between brokers?

What Is a Freight Broker

A broker is a type of intermediary in logistics that’s useful for helping to connect loads to carriers. Their integral role in the modern supply chain helps by saving time and money for freight management parties of all types. This comes from the continuous flow of goods that involve brokerage services to help improve throughput and keep rates in check. Brokers serve a vital role to provide capacity to carriers which helps to limit delays, empty truck-runs, excess idling and more. For shippers, brokers can help keep total rates in check, provide access to dense capacity, and even combine that with other services, like temporary storage for drayage freight. Even with that in mind, freight brokers can still possess carrier-like characteristics when they own assets, so that’s where the fundamental distinction between brokerage types comes into play.

What’s the Biggest Distinction? Assets or Not!

While their job description or title might be the same, not all brokers offer the same services. The two significant types of freight brokers are asset-based or non-asset-based. Each one provides vital logistics and transportation services, but each one also sits distinct from the other. Depending on a shipper or carrier’s needs, one type of freight brokerage service might be better than the other. It depends on how many assets are backing the carriers, what shippers need and what additional resources and services get requested regularly.

Brokers vs. 3PLs and Other Intermediaries

At the most basic level, a broker falls into the category of a third-party vendor or partner. However, they stay distinct and unique compared to other 3PL service providers and intermediaries commonly used for freight transportation, such as freight forwarders and true 3PL service providers. Some 3PLs may offer only software for use, and forwarders may be isolated from international trade management. Freight brokers fill a unique niche need while also providing flexibility and adaptability to scale and shift as needed to accommodate changing markets and customer demands. Also, brokers can be involved in virtually any type of specialized transport and can help everyone stay strategic. 

Consultancy/Advisory Services to Help Your Company Stay Strategic

Brokers can help shippers navigate complicated and delicate processes such as customs clearance, documentation management, customer communications, capacity procurement, and more with an increased level of confidence and accuracy. The consultation and advisory services provided by brokers can go a long way in keeping supply chain networks moving while keeping individual companies and the team as strategic as possible. 

Software, Experience and Buying Power to Help Your Company Thrive

Any shipper looking for a freight broker must remember that there are different freight managers and brokers. Every company and service provider can provide slightly different services and amenities. One must-have for any brokerage partnership is a strong focus on technology and automation. Leveraging technologies in logistics can make the entire process faster and easier. The ability to use automated job load dashboards, access virtual RPF applications, and implement innovative scheduling tools can significantly impact productivity. Additional access to fully pre-vetted carriers and the ability to review the latest tracking and monitoring systems can help any transportation company maintain a competitive advantage in any market. 

Know What Your Freight Brokers Bring to the Table, and Gain Control with the Right Partnerships

Brokerage services are an integral aspect of transportation service management. Whether domestic or global freight transportation, a good brokerage partner fills a vital role in keeping the supply chain network running as smoothly and efficiently as possible. For decades, their impact has continued to grow. Freight brokers provide an essential service to transportation logistics yet still offer different services and take on various forms. Connect with Port City Logistics to learn more about the value of a drayage-experienced and expert brokerage that can help your team.

Topics: freight brokerage services