Finding a freight broker that keeps you in the loop about shipments, uses the latest technology, and has the necessary licenses and insurance is an essential part of your business. A freight broker is a crucial link between you and your customer.
Freight Broker’s Licensing and Insurance
Before you decide to work with a broker, verify that they have a current license on file with the Federal Motor Carrier Safety Administration (FMCSA). The federal property broker license, required by the federal government, allows the freight broker to arrange transportation of goods in exchange for payment. A broker with this license has a US-DOT number, and has broker authority. Most shippers require their freight brokers to carry contingent cargo insurance, as well as general liability.
Talk with potential brokers about the types of freight claims they have dealt with in the past, and how they handle insurance protection for their clients. They should understand and have experience with the types of claims that happen most often in your business.
Check the Broker’s Background and History
It is reasonable to conduct a credit check on a broker before signing a contract. A broker must be financially solvent and have a reputation for paying their carriers on time. If a broker has a judgment or lien against them, it could mean they are having financial problems, which would make it difficult for them to offer the type of ongoing service you require.
Ask questions about how long the freight broker has been in business. In the trucking industry, the first few years can be the toughest. It is in your best interest to choose a broker with a solid history of success going back more than two or three years. If you need a broker with specialized experience, verify that they have a track record of providing the exact services you need.
Learn the Freight Broker’s Internal Communication Methods
When you have customers waiting for shipments, you need access to up-to-date reports on the whereabouts of your goods. Your broker should use cloud-based customer management systems allowing text or email updates, so you can stay in the loop at all times. This will also help you keep your customers informed if a shipments is running behind schedule.
Consider Whether You Want an Asset-Based or Non-Asset-Based Broker
There are two main types of freight brokers. Non-asset-based brokers can offer a more extensive network of transportation options. But, due to fluctuating market conditions, you may sacrifice some control over freight rates. If you depend on a non-asset-based broker, you will rely on their networking and negotiating skills.
Asset-based brokers may offer different types of freight trucks, which gives you more versatility. This is important if you ship specialized types of freight like automobiles or perishable goods.
Make Sure the Broker Meets Your LTL Shipping Needs
If your shipments usually take up less than an entire 53-foot dry van trailer, less than a truckload (LTL) shipping will help you get better freight rates. Increased demand for parcel delivery as a result of the growing e-commerce industry has created a demand for LTL freight shipping services all over the country.
If you need LTL shipping services, make sure your broker uses dimensionalizing to most efficiently identify unused freight space and calculate shipping rates accordingly. This helps drive down shipping costs by allowing the driver to carry more freight. If your broker uses the traditional National Motor Freight Classification (NMFC) system, you may be paying too much for shipping.
Consider Your Options Before Working with a Freight Broker
With a nationwide shortage of safe, reliable truck drivers, you have more choices than ever when it comes to choosing a freight broker. Finding shippers who will pay you well and offer consistent work should be your ultimate goal.
As an owner-operator, you will want your trucking business to consistently grow, which means searching for freight brokers who have a good reputation among your peers. They should pay on time, openly communicate with their drivers, and offer written instructions to keep expectations clear. Before agreeing to work with a broker, make sure you have your agreement, including pay rates and home time, in writing as well.
If you are not quite ready to go out on your own, but want to work with a freight shipping company in Arkansas, contact us to learn about the employment opportunities at RCX Solutions. We are actively recruiting owner-operators and company drivers. Our drivers receive safety bonuses, great support, and several benefits packages. Find out more by calling 866-336-9697.
RCX Solutions offers logistics management and freight shipping services in Arkansas in one convenient place. To learn more about our rates or to get a quote, please call us at 866-803-2265.