Freight Brokers Versus Freight Carriers

Let me preface this with that there will always be a need for freight brokers. Carriers and Brokers offer some similar services but they also have polar opposites of ways to manage shipping

FREIGHT CARRIERS

work directly with the business and have them set up with an account (and credit) and set pricing based only on that particular shippers need. You pay the carrier directly for services quoted.

Advantages:

  • Your specific volume will allow discounts on lanes you use
  • Carrier has the ability to update tariff immediately
  • Centralized billing

Disadvantages:

  • Unless you are shipping high volume, you will not have special treatment
  • No-one is there to protect you when there is a billing error or adjustment
  • Claims process is daunting and rudimentary on purpose

FREIGHT BROKERS

work directly with the business and have an account based on credit. Freight rate discounts are applied by the agent based on volume or range of shipping.

Advantages:

  • Your specific volume will allow discounts on lanes you use
  • Many other carriers rates on the same lane you are shipping to show potential savings
  • Assigned rep to keep in contact with and properly manage your account

Disadvantages:

  • Blanket rates may not help save money on the lane you are shipping
  • Brokers have no control over truck scheduling and timeframes
  • Never touches the freight directly

 

For freight carriers, utilizing brokers helps increase their shipment count by having a sales team drive freight to the best carrier for that particular lane without the need to calculate commissions into the cost of freight. It is a model that has a solid place in the marketplace.

For freight brokers, offering a multitude of carriers positions them with the ability to offer rates and services a single carrier may not offer due to lanes of transport or due to costs.

The added perk of using a broker is that they can be that buffer between a carrier that is difficult to work with or offers limited support. Brokers are customer-centric and have the ability to be in a shippers corner when there is a need to.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *