Trucks are the main source of transporting cargo in the United States, as more than 70% of all the freight in the country is moved by road. With the industry becoming more competitive, it is more important than ever for trucking companies to have better relations with their customers and secure reliable clients and consistent freight. This is where freight brokering comes in.
If you are a trucking industry novice, you must have heard the term “freight brokerage” used in random conversations. Let’s take a look at the role of a freight broker in relation to the trucking companies.
What Is Freight Brokering?
A freight broker connects and works as an intermediary between two parties: the shippers and the carriers. The shippers are the people who have freight that needs to be moved. Meanwhile, the carriers are the companies who can move the said freight.
Freight brokers enable shippers to find reliable carriers, such as trucking companies, who would move their cargo from one point to another for a fee. Along with brokering a deal between two parties, the brokers are also responsible for facilitating the shipper with the movement of their freight. Moreover, the freight brokers are responsible for tracking the cargo. They also update the shipper when the carrier reaches its destination.
In other words, freight brokers work as middlemen between the shippers and carriers. They make money by taking a certain percentage of the total transaction cost as their commission. These individuals can either run their own business or work with a larger freight brokering company.
Why Do Trucking Companies Work With Freight Brokers?
Here are some of the main reasons why trucking companies prefer working with freight brokering services.
- Professional freight brokers have an established network of shippers who want to get in touch with trucking companies to transport their cargo.
- Freight brokers are up-to-date about the latest industry rates and logistical solutions.
- Freight brokering services have access to the latest technology that allows them to communicate with multiple shippers and carriers simultaneously. They also use the latest tacking and processing equipment to ensure the shipment is delivered on time.
- Most freight brokers also help trucking companies deal with their inventory management, invoicing, and legal paperwork.
- Those working in the freight brokerage industry are aware of the latest regulations.
- They can help shippers and carriers communicate with each other and come to a mutual solution in case of any hiccups.
- Most importantly, freight brokers can provide more business to trucking companies, which will allow them to make more money.
In a Nutshell
Freight brokering plays an increasingly important role in the present-day trucking industry. These brokers connect trucking companies with shippers, arrange transportation, and track the cargo. In case of a conflict, freight brokers also act as intermediaries for both parties and help them resolve it.
If you are interested to learn more about trucking or want to take it up as a full-time career, consider booking an appointment with the CDL Michigan training school. You can also contact us for more information.