It seems illogical for most transportation service providers and shipping companies to remain hands-on at all times with every single load. But that is all too often the reality that shippers face. This is especially true during peak seasons or when they need to realign resources in the supply chain. Truck brokerage services frequently fill in this gap and satisfy this need, and since their whole business is transportation, they are more likely to be mindful of freight, more so than shippers or carriers would be on their own accord.
However, there is a perceived darker side to brokerage services as well. According to a recent LinkedIn article by Richard Perry, the term freight or truck brokerage may elicit negative feelings and connotations for some shippers. The reason for this is that far too often, those claiming to offer benefits of a freight brokerage are unable to fully meet their clients' needs. Here are five ways to tell if a truck broker is missing the mark and failing to meet expectations:
Truck Brokerage Fees Seem Out of Touch
While it is common for fees and rates to vary from one broker to another, it is essential to closely compare costs and expenses. Brokerage fees can rise and fall depending on the current status of the market and other economic factors. However, if the truck broker's prices do not reflect current market values and trends, then take that as a significant warning sign to look elsewhere. This can also be true if prices seem too low, not just too high. A low price from a broker just trying to earn the business may mean they select a less than stellar carrier or that the load doesn’t get the same attention from a service standpoint due to the low revenue and margin value.
Freight Spend Continues to Grow Despite Strategic Initiatives
Another indicator of a less than stellar truck brokerage operation is failure to deliver promised reductions and savings. When fees, expenses, and surcharges continue to grow or fail to decrease over time, it could stem from ineffective broker management. A broker doing only the bare minimum and not taking a personalized approach to freight and logistics management can often be pinpointed by poor fee reduction success rates.
Shipping Service Level Agreement Failures Are More Common
The purpose of working with a broker is to streamline shipping services and save money by lowering accessorial fees and expenses. When a truck brokerage partnership operates effectively, these results are clear and obvious. However, if delays constantly plague shipments, along with added costs, per diem, detention, demurrage, and other fees and penalties, then the current broker has failed to meet the minimal expectations.
Struggling Brokers Haven't Been Expanding Their Carrier Base
A successful truck brokerage service provider has a large and ever-growing network of carriers that can be tapped as needed. However, if that pool is limited and the broker struggles to find carriers to pick up loads, the broker often fails to get the best rates. Struggling to keep up with capacity demands can ultimately result in higher rates and more expenses.
Limited Re-Evaluation Processes Are in Place
A truck brokerage must operate based on precise data, accurate rate trends, and current market evaluations. Establishing the use of broker and carrier scorecard utilization allows everyone to stay on the same page. Freight brokers who do not take this opportunity to re-evaluate the success of current setups will likely be overpaying and falling short in other areas, which means more expense for shippers. How will you assess if the broker has a leading edge operating plan?
Know Your Truck Brokerage Can Meet Your Expectations with the Right Technology and People
During peak shipping seasons and during times of extreme market volatility, the need for outside assistance is more significant than ever. Truck brokerage services often fill in this gap and satisfy this need. Knowing that a chosen brokerage provider can meet and exceed expectations remains critical for continued growth in today's market. Establishing the right truck broker partnership marks the first step toward meeting all expectations. Contact Port City Logistics to learn more about what the right truck brokerage can do to improve your shipping processes today.