If you are in the trucking industry, you likely know what a freight broker is but just in case, a freight broker is a company that connects a shipper, who has goods that need to be shipped, to someone who can transport them. Ideally, they rely on a reputable freight broker to assist them on getting their goods where they need to go safely and efficiently. A freight broker has an index of authorized motor carriers that they know can get the job done promptly. With technology moving forward, there are many ways to digitally streamline this job. This can be an opportunity to be a part of the trucking industry without actually driving a truck.
The best foundation for a freight broker is experience in the trucking industry. Brokers typically have a large network of truck drivers/companies and have strong partnerships with them. As a traditional broker, you will be at a desk physically matching loads with trucks. This route is a viable in today’s industry and still very popular. Freight brokerage have relatively low start up costs with business relationships being the most valuable asset.
In the past number of years there has been many technological advances in the world of freight brokerage. Digital freight matchers (DFM) have streamlined the service and made it easier for everyone to get a slice of the $50B commission pie. It is estimated that the trucking industry generates $700B/year in the United States alone. It is no surprise that freight broker companies have been popping up constantly, with a few clicks or taps of the finger the driver can find fright on their route or a broker can find a reliable driver.
So where should you start? If you are going the traditional way, you will still need a transportation management system. When you are just starting out it can be simple. You won’t need a lot of functions; you really just need a backend system to manage your loads. The cost for this can be as low as $50 a month. As your business grows, you can always upgrade to include more features on your system.
If you are going down the digital road you will need to invest in making sure you have a friendly user experience and do not worry so much about your backend.
Finding a pricing system that makes sense and is fair to everyone involved can be tricky. You need to make sure you have enough funds to support your business and yourself. Not only that, the fee should be reasonable for the shipper. With industry experience, finding a fee that meets everyone expectations can be done easier. Also, keep in mind invoices do not get paid instantly, be certain to plan accordingly.
Insurance seems like an obvious step to starting a new business but it is still important to mention. Be sure you work with a company that has experience in the industry and understands your needs. This insurance should cover any property you might have as well as any employees you have.
If you want to stand out in the market, consider finding a niche. This can help to build brand awareness, as well as, trust with your shippers and carriers. Another way to stand out is to look for value-add that you can provide to your users on both ends. This could be giving them extra data that other DFMs do not offer.
There are many ways to stand out as a freight broker. We have provided a few tips here but there are many more! Just remember, the freight business is all about people and relationships. When you find good brokers, try to keep them and give them incentives to work hard for you and the company. If your employees are not treating your carriers properly, word will get around fast in the trucking community and could really damage your company’s reputation.