How Does Freight Brokerage Work & How to Pick a Freight Broker

The term “freight” refers to cargo transported in bulk by aircraft, ship, train, or truck. When bulk cargo is transported, there are often many complex arrangements that involve schedules, permits, licenses, special equipment, and personnel. Negotiating all of the logistics required to move freight requires dedicated attention, skills, and resources. The term “broker” refers to an individual or firm that acts as an intermediary to facilitate a transaction. A freight broker is an intermediary between shippers and carriers who facilitates arrangement of the transport logistics. Freight brokerage involves connecting shippers and trucking companies to move cargo. A freight brokerage does not own cargo. The firm handles the communications between the carrier and shipper, is responsible for making sure the transitions proceed smoothly, and must ensure that the goods arrive properly.

How does freight brokerage work? 

Freight brokerage works through relationships with shippers as well as networks of regional, national, and international trucking companies. Shipping coordination and carrier selection is an extensive and involved process that would be inconvenient for most shippers. Freight brokers use specialty skills and relationships to oversee the entire process of cargo transport. 

Freight brokers are only as good as their carriers. Therefore, it is imperative that freight brokers maintain a vetted roster of trustworthy and skilled carriers. All of the carriers in the roster should have the appropriate licensure and insurance. The carriers’ areas and scope of expertise must be accurately understood. Additionally, freight brokers need to be confident in the performance history of their carriers as not all carriers are consistently reliable. 

Freight brokers are responsible for a host of complex logistics. Freight brokerage involves planning every detail of a cargo’s journey. The perfect carrier needs to be secured, and the appropriate paperwork must be completed. Freight brokers need to map out the logistics for every distance and contingency so that cargo arrives on time and in perfect condition. Within freight brokerage firms, many people are typically involved in the complex logistics of a single transport. The freight brokerage firm is responsible for communicating clearly, thoroughly, and transparently with the shipping clients.

Freight Brokerage Company Services

For businesses, freight brokerage companies offer critical shipping services. The services involve connecting available carriers with shipping clients. Freight brokerage companies ensure deadlines, quality standards, and safety requirements are met. They are experts in resolving surprise logistics issues without any disruptions to the supply chain. They are also experts in preventing damage, expediting delivery time frames, and negotiating the most favorable rates. 

The service begins when a request for transport is made. The freight brokerage company issues an order, schedules the freight, troubleshoots any issues that arise during transport, communicates progress with the client, and confirms delivery. At the most essential level, freight brokerage service is problem-solving by logistics professionals. 

Is a freight brokerage right for your business?

If your business is not experiencing any freight supply chain, distribution, or budgetary challenges, a freight brokerage may not be right for your business. However, if your business is looking to improve the shipping process, a freight brokerage may be right for your business. Freight brokerage exists to transform the complicated and convoluted process of cargo shipment into an effortless transaction. Freight brokers offer expertise, industry connections, and high-capacity capabilities. Many businesses consider freight brokerage the ideal solution for their shipping needs. Outsourcing shipping to a freight broker allows businesses to avoid paperwork, endless phone calls, and headaches. Working with a freight brokerage also reduces costs for many businesses. They specialize in logistic efficiencies that ultimately save businesses money. Without a freight brokerage, businesses must manage multiple entities and steps, and this can be a time consuming, difficult, and costly venture. With a freight brokerage, only one point of contact is needed for an entire shipping transaction, and your business has access to an exceptional network of resources. Even businesses who are not experiencing freight shipping challenges can benefit from a partnership with a freight broker because freight brokerage can support business growth. Freight brokers can easily increase shipping capacity, save time, improve reliability, reduce errors, and save money. If your business is trucking, working with a freight brokerage is beneficial because the firms are experts at optimizing routes, which increases earnings overtime. If your business does not involve the transport of goods, partnering with a freight brokerage ensures that all the attention can be dedicated to your area of expertise, not to shipping. 

How do businesses choose the best freight brokerage firm?

When businesses decide to hire a freight brokerage firm, it is important that they choose the best transportation partner for their shipping needs. The freight brokerage firm’s specifications need to meet the needs of the business, and the quality must be superior. Businesses should consider the size, the capacity, experience, reliability, communication standards, responsibility, and reputation of the freight brokerage firm. 

Freight brokerages vary in size, coverage area, and capacity. The largest firms have massive networks of carriers. It is easy for large firms to re-power loads and change the course of shipments. Larger firms have extensive resources and can easily manage unexpected challenges. Sometimes large freight brokerages have streamlined customer service centers that are not as personal as the attention that smaller firms can offer. By definition, smaller freight brokerage firms have less extensive networks, resources, and capabilities. It can be more expensive for smaller firms to handle shipping complications. In the most positive cases, the tradeoff may be that a smaller firm may offer a specific service niche or highly attentive customer service. Additionally, businesses should ensure the operational area and expertise of the freight brokerage matches their needs. Not all freight brokers can operate nationally or internationally. Some specialize in regional fields. All freight brokers must be licensed, bonded, and insured. They must also be registered with the Federal Motor Carrier Safety Administration (FMCSA). This is necessary to protect businesses from fraud or damages. If chemical freight is needed, it is important that the brokerage firm have the appropriate expertise. Finally, the capacity of a freight brokerage is an important consideration for a prospective shipper. In order to maintain smooth flow in the supply chain, it is important that the capabilities of the freight brokerage match or exceed the demand. To withstand mechanical issues and competing demand, freight brokerage firms must have access to many fleets of trucks so there is never a delay. 

In terms of quality, businesses need to consider the experience, reliability, communication standards, responsibility, and reputation of the freight brokerage firms. Moving business products is a huge endeavor and responsibility. Only the most experienced freight brokers should be trusted with such precious cargo. Specialized experience may also be desired in certain circumstances, like when moving hazardous materials or works of art. In terms of reliability, the freight brokerage needs to offer accurate quotes, honor the quoted transport rates, and consistently deliver cargo on time. Communication must be thorough, clear, honest, and transparent. The communications policies must be compatible with a business’s existing workflow, and the customer service team must be responsive. Ideally, the freight brokerage utilizes the most up-to-date smart technologies to manage and communicate transit details. Understanding how freight brokers communicate and resolve unexpected issues is critical for measuring responsibility. The way that freight brokers address challenges define the quality of their work. In the process of selecting a freight brokerage and building a relationship with the firm, it is helpful to gather the company policies directly from the firm. It is also helpful to interview other clients to understand the realities and nuances of the partnership. The reputation of the freight brokerage firm impacts the reputation of the shipper, so it is paramount that the freight brokerage is exceptional. 

The freight brokerage firm is only as good as their carrier partners. Excellent carrier relationships, and astute judgment for choosing high-quality carriers, are critical. Inquiring about the carriers and carrier relationships can be beneficial when choosing a freight brokerage firm. 

Why choose First Star Logistics? 

First Star Logistics is a global logistics provider with over 60 years of experience. As a comprehensive, asset-based provider, First Star Logistics has an in-house freight brokerage department that serves the United States. Countless clients trust First Star Logistics to transport their cargo safely, securely, and in a timely manner. Every detail is attended to so that the clients can focus on their business specialties without worrying about shipping logistics. First Star Logistics specializes in package optimization, network modeling, routing optimization, inventory optimization, and supply chain data management. Through a unique freight broker training program, First Star Logistics offers competitive opportunities to logistics professionals and ensures every team member meets the highest standards. First Star Logistics also directly trains and manages drivers. With a team of experts and advanced technologies, delivery goals can always be met with First Star Logistics. To learn more about the transportation solutions and opportunities offered by First Star Logistics, including how to become a freight broker, visit the First Star website today!