A substantial amount of over-the-road freight transportation is handled by freight brokers. A freight broker is a person or company that brings together a shipper (with freight to move) and a qualified carrier (who has the capacity to move the freight).
- Nothing New! Freight brokers have been around the transportation industry since the 1900s. But before the ’70s, regulations governing brokers were so restrictive that few firms employed the intermediary.
- The Bond. All freight brokers are required to have a $75,000 surety bond or trust fund. If a freight broker does not live up to the contract with a shipper or carrier, the bond assures that the broker has the cash or assets to cover the amount.
- Reliable Capacity with Qualified Carriers. A freight broker assists you, the shipper, in finding a dependable motor carrier that you might have otherwise overlooked.
- The Truth about Rates. Shippers pay a fee to use a freight broker’s services, but the end price is almost always lower than if you had arranged the transportation yourself. Brokers can find the best price because of their access to a broad carrier network.
- Communication is Key. What are your needs? Be direct with the broker about when freight can be loaded, your price range and how to notify you with any disruption.
- Not A Forwarder. A freight forwarder takes possession of goods and consolidates smaller shipments into a larger shipment, then arranges for transportation.
- Becoming a Regular. As a shipper, you can utilize a freight broker for regular lanes or specialized freight. A broker can find private carriers covering the lane to make your delivery faster and safer. A broker can obtain specific equipment needed to ship your freight.
- Non-Asset Brokers Advantage. Non-asset brokers have immediate access to many carriers and trucks. Non-asset brokers are more cost-effective since their focus is to find you the best rate and judgment isn’t clouded by specific ownership of the truck.
Continue Reading: A Comprehensive Guide to Completing a BOL, Tips for Shippers New to LTL Freight, Causes and Effects of Demurrage
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