If you would have asked me a few years ago whether we should describe our company as a freight broker or third party logistics provider, I would have had a declarative answer to never use the term ‘broker.” In fact, I would argue that I was in the majority as most of the world has a negative connotation of the word. I started thinking about my change in thinking even more after I recently saw the film “The Wolf of Wall Street” where the broker is portrayed in the most over the top negative fashion possible. Although I really enjoyed the film and expect most folks to not associate that form of broker with what happens in the real world, I have a feeling it will further tarnish the perception of the term. To many, the general thinking is that brokers play no real role and are simply hindering the ability of consumers to interface directly with supplier while driving up the price in the process. There is the misconceived perception that the broker’s work does not equal the small additional percentage paid by the consumer. Now I can’t fully attest to other industries, but I feel confident all brokers will back up my firm refutation to that train of thought. To begin, brokers usually exist in massive industries with complex processes and lots of choices for the end consumer. There are an abundant number of directions the consumer can go and the broker has the expertise and data to align the correct supplier to the needs of the consumer. Talking about the freight world specifically, it is irrational to think that most businesses will have the capability to learn the ins and outs of the industry and easily be able to know what carriers align most effectively with the demands of their business. Beyond aligning varied interests, the broker can almost always provide savings to the customer due to the broker using their total book of business as a negotiation arm when seeking out the best possible pricing from the carriers. It is incredibly difficult for the consumer to obtain better savings by going straight to the carrier as the pricing can’t compete as compared to leveraging the pricing of a vast network of carriers sourced by the broker. On the flip side of the equation, the carriers also benefit because the broker acts as a sales arm so they can grow faster without the risk of drowning in overhead expenses. Once the broker effectively educates their customer and frames proper expectations on why certain carriers are being used on the account, the work has only started for the freight broker. For me, the incredible amount of work that goes into managing the day to day of freight shipments is the meat and potatoes on why I feel so comfortable loving our service as a freight broker. A good broker should function as an extension of the customer’s internal team. It is our job to fully understand the service offering promised to our customer’s customer. We build relationships with all vendors with the goal of fully understanding their processes so we can make their lives as easy as possible. When issues do come up, the broker will interface with all parties to make sure it is resolved in the most efficient and cost effective way possible. So what does all this allow for our customer?
They realize significant savings because they need not hire additional personnel to manage the freight operations.
Their freight is moved by the best carrier in a vetted network depending on the combination of service level expectation and price.
Stakeholders of the shipment whether they are our customer’s customer or vendor partners are treated with the same level of service and respect as we would treat our own customers.
They are supplied incredible rates due to the high volumes of aggregate business we bring to the carriers.
It is a great feeling to have some preconceived notion and then have enough experience and positive interactions to completely reframe the inaccuracy of a definition. At FreightPros, we realize we are fighting an entrenched mindset, but are eager and hungry to move it in the other direction!
Scott has been with FreightPros since October 2009, and is one of the owners of the business. At FreightPros, Scott focuses on streamlining the daily operations of the business through collaborative thinking. Outside of work, Scott enjoys playing soccer and going to concerts.
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