Being a "Broker of Choice"
Choptank Transport recently conducted a carrier survey from which 300 for-hire truckers in the supply chain responded. The survey delved into how carriers perceive the value that 3PLs offer, including their thoughts on pricing, service, courteousness, and clear communication.
Brokers provide a much-needed service, which is reciprocally beneficial for shippers and carriers. For the shipper, 3PLs find transportation fast without the headaches related to carrier-sourcing and vetting. For the carrier, 3PLs provide regular and profitable freight to fill their trucks while also taking care of the back-end accounting and claims handling, if needed.
What is important to carriers
So what do carriers value most in brokers? According to the survey, some brokers are better to work with than others, so what are the expectations of most carriers in the logistics industry?
Boris Panov, with A2B Cargo, is one of Choptank’s contracted carriers. He explains why he uses brokers and what qualities he looks for in a 3PL. “Carriers want to be protected by the brokers they work with for things like detention pay. When we run into delays that are not our fault, if the broker has an interest in growing the business with its carriers, they collaborate until the end of the transaction, and not just when booking the load.”
“Carriers look for brokers who are willing to negotiate price, respond promptly to the need for fuel advances and lumpers, and are willing to help when it comes to unloading/loading times and layovers, said Albert Navarro. “Knowing that we are on the same side when it comes to serving the final client, and being company focused, is very helpful when resolving issues regarding reefer temperature, product condition or whatever the issue.”
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“My expectation of brokers is to help us as much as they can by providing complete information and answering our calls when we need help. We want to feel that brokers care about the carriers they use,” said Gerardo Medrano, a dispatcher and operations manager at MBO Transport. “Besides pay, the most import thing for me is respect for drivers. They are the ones that have the biggest stresses in this business, and sometimes we forget that. They need to feel that brokers take care of them.”
Another comment from the survey said that Choptank offers “fair rates with good communication. We also appreciate not getting four to six check calls per day, especially at night or when on break.” Brokers like Choptank are insisting on total tracking with their carriers, eliminating the need to repeatedly inquire about the location of a load, for which this carrier seems grateful.
How Carriers Choose Brokers
Carriers should be cautious of working with brokers who don’t use the latest technology to access adequate market intelligence, current rate information, or predictive load-matching capabilities can cost them money. They can be consistently off-base when it comes to offering reasonable rates due to inexperience or misinformation.
It is also helpful to know that if a carrier has concerns about a broker being legitimate, there are brokerage watchdogs such as FMCSA and ATA. Check Transportation Intermediaries Association (TIA)’s website to see if the broker is a member. TIA promotes ethical business practices and has rules in place to provide necessary checks and balances in the brokerage industry. There are many trucker-related forums that can be useful when deciding what broker loads to seek out and which ones to avoid.
New carriers should do their homework to find a 3PL that they can build a good relationship with over time. They can seek out desirable brokers by researching the company’s reputation and by reading about the experiences of other carriers. Below are a few tips.
- Join Facebook groups like Rate-per-Mile Master and Trucking Rates & Lanes for insights from other carriers.
- Is the brokerage you are talking to concerned about working with Shippers of Choice, meaning shippers with low detention times and courteous dock personnel, which is an indication they are carrier advocates?
- Is the brokerage recognized as a “Top 3PL” by industry organizations or publications? Have they won any transportation-related awards or received any recognition in the supply chain?
- Ask the brokerage how long it has been in business. Start-ups may not have the market intelligence to rate accurately.
On the most basic level, brokers add value by making the daunting task of finding a shipment for a truck at the right time and the right price, seem relatively simple. The fees they charge are for the value they add to the supply chain. Some of the value-added benefits come from the substantial investment that 3PLs make in technology, including predictive load-matching and total transparency (to name a few), providing efficient back-haul opportunities and fewer check calls for many carriers.
Do brokers charge a standard percentage of every Shipment? No, there are plenty of instances when brokers lose money on shipments and other times when brokers charge a premium for short-notice loads or hard-to-cover lanes. The market dictates pricing, which is driven by supply, demand, and capacity. The job of the experienced broker is to keep up with those changes, so their fees are reasonable and fair for the scope of the services they provide.
A few notes about the Choptank Transport Survey:
300 for-hire carriers participated in our survey
56% of the carriers ship with 11 or more brokers
63% have reefer LTL
More than 95% plan on using Choptank again
What are your thoughts on what a broker can do to become a "broker of choice" for its contracted carriers?