2 min read

What Brokers and Carriers are Doing Wrong

 

On this episode of The Road Forward we have Erik Larson with us. Formerly a Landstar agent, he’s now a freight broker and has been in the business for 14 years. Erik shared with us his informed opinions on where the industry is and what both carriers and brokers are doing wrong.

Join us as we get a broker’s perspective on:

  • The role of the freight broker
  • What carriers can do to improve the success of their company
  • How smaller brokerages can keep a place in the trucking industry

The Role of the Broker

Freight brokers are not allowed to take a supervisory role in someone else’s company, meaning they wouldn’t speak directly to drivers, etc. If you as a broker start to get involved in this manner, it makes you a partnering agent in that company. Because of this, you would be in the direct line of a lawsuit should one arise– a position you don’t want to be in. Be sure to draw the right boundaries between you and the carriers you work with.

Advice for Carriers

One big mistake carriers make when working with brokers is not naming their price per load upfront. Many times carriers expect brokers to post their prices on the load board, but as a carrier this could result in you not getting paid what you need to do a job.

Think of it this way: if you call a plumber to your house to fix a broken pipe, he gives you a quote based on his hourly rate. He doesn’t quote you based on how much money you have/are willing to pay. The relationship between carriers and brokers should be no different; if you name your price upfront, it gives you a competitive advantage. You might find that often, customers are willing to pay more if the quality is there. 

Another piece of advice is to focus on the lanes you’re familiar with when accepting loads. Stick to the experience you already have before trying to branch out too much. 

Future of the Industry for Brokers

Erik shared with us that with so many steps in the logistical process nowadays, he foresees larger logistical companies merging. Especially with advanced technology becoming more available, this could mean larger companies taking over while smaller brokerages suffer. What can small brokerages do to stay on top of this shift? Erik offers a few suggestions:

  • Don’t just sell a load board– doing this won’t make you stand out from the crowd and doesn’t improve your value as a company.
  • Find something to specialize in that sets you apart from the competition, such as hauling a particular kind of freight. 
  • Call carriers first, and customers second. First off, you’ll likely get a better response from customers if you already have carriers lined up that can haul their freight. Second, you’ll build relationships with carriers looking for loads to haul by taking an interest in them.

Be sure to learn more by checking out the full episode on YouTube or our other platforms.


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