Why OutSource

What Are Freight Brokers?

Nearly all the merchandise in a home or business has been shipped by truckload at some point in the delivery process. With such high volume of traffic, it is expedient to have an organized method for organizing resources to get items shipped. Freight brokers serve as an intermediary that both coordinate and expedite shipping efforts between shippers and carriers. They have no financial ties to either the shipper or the carrier. A broker evaluates and determines the needs of a shipper and then links them to a carrier to transport the cargo at the best available price.

It is advised for a broker to gain experience working in the shipping industry for either a shipper or a carrier before they venture into brokering. Understanding the practical aspects of the job and gaining experience with methods and tools are critical to being successful. Brokers are licensed by the Federal Motor Carrier Safety Administration, or FMCSA. This licensing process helps to educate and govern the brokers. This allows them to get the knowledge they need while proving to their customers that they are a legitimate freight broker. In addition to being licensed, brokers must also carry liability, errors, and omission insurance. They carry high liability limits that insure them against loss to both their business partners and their clients. Often they also carry surety bonds, another type of insurance, that protect them financially if something should happen to a shipment.

Because a freight broker has a working knowledge of the industry and valuable resources at their disposal, they are highly successful in finding the most efficient combination for both shippers and carriers. A broker often can get the lowest freight quote available for shipping specific product. This is especially helpful for a company who does not ship large quantities or have a dedicated shipping department. They use shipping software that allows them to keep detailed records so that a total expense can be calculated for each carrier that they use. They can keep track of trends, customer complaints and various statistics. On time delivery can be extremely vital to the customer, especially if there is a high demand for their product.

Another benefit is that brokers not only get the lowest freight quote but they also help find carriers that could be difficult for someone with little or no experience to find. Motor carriers know that they make the biggest profit when their trucks are full and moving. Therefore, brokers help the motor carriers to keep their trucks full while they ship a variety of items.

Less-than-truckload shipping, LTL, is coordinated by freight brokers. LTL is a method in which small cargo shipments are combined together with each other to create a full truckload of shipment, but at a reduced cost.

Because almost every single thing in our lives is transported at some point, either as finished goods or raw materials, it is extremely important that the transportation process is as smooth as possible. For this reason, freight brokers are an indispensable link to the shipping industry. Whether it’s helping a carrier get a full load, or getting the lowest freight quote, a broker will facilitate the quick efficient delivery of goods and products.

Now there is an easier way to maintain and manage your inventory to provide more options in saving money for your company. For more information on Logistics Software, and a more comprehensive look at Freight Brokers visit RateLinx.com.