Freight Brokerage Business. The Staff of Entrepreneur Media, Inc.
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you have in common. Protect the privacy of your customers and the confidentiality of their businesses. Not only is this a sound professional business practice, but you are prohibited by law from disclosing information to an unrelated party that may be used to the detriment of the shipper or consignee.
FIGURE 2–1: Golden Rules for Transportation Intermediaries
The basic concept of freight brokering is pretty simple: A shipper (or consignor, as they’re sometimes referred to) calls you with a load. You complete your own internal paperwork and check with your carriers to see who has a vehicle available. If you already have a relationship with a carrier, you fax or email them an addendum to your basic contract that describes this particular load and the rate. If the carrier agrees, the company’s representative signs the document and sends it back. (If you don’t already have a relationship with the carrier, you’ll need to set up a carrier/broker agreement before you finalize the deal on the first shipment.)
Next, the carrier dispatches the driver. It’s a good idea to require that the driver call you (or use your online tracking system) to confirm that the load has been picked up, and again when it has been delivered.
After the shipment has been delivered, the carrier will send you an invoice and the original bill of lading. You invoice your customer (the shipper), pay the trucker, and then, ideally, do the whole thing again with another shipment.
A successful freight broker will ultimately be handling this process simultaneously on behalf of multiple shippers and/or handle multiple shipments simultaneously on behalf of a single shipper. Thus, it’s essential that you always keep track of all relevant details that are pertinent to each job.
When you arrange a shipment, you’ll need information from both the shipper and the carrier. Much of this information should be kept on file in your office. Again, this is something specialized software can help you manage.
Maintaining detailed information on shippers helps you provide better customer service, and saves you from having to take the time to ask the same questions with each shipment. Keep the following information:
• Company name
• Physical address
• Billing address, if different from physical address
• All telephone numbers (cell phones, voice mail, fax, pagers), including any toll-free numbers
• All email addresses
• Contact people (including traffic and shipping managers, freight payable person, and anyone else you may deal with)
• Type of freight shipped (machinery, produce, chemicals, etc.)
• Type of equipment (trucks) required
• Pallet exchange requirements
• Other special requirements
• Any other pickup information you require (such as warehouse locations or other distribution points)
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Use any of the popular contact management or freight brokerage software packages to maintain your customer information. This will make the data easily accessible for anyone in the office, simple to keep current, and easy for you to monitor the status of accounts from a sales management perspective.
Many specialized software applications designed for use by freight brokers are based online. This means that you pay a monthly access fee and can access the applications and your data from any internet-connected Windows PC, Mac, or even a smartphone or tablet.
This information will not change frequently, but you should always make sure you have current information. Immediately update anything you find out about during the course of handling a shipment, such as a change in personnel, a new phone number, or an updated email address. Once a year, you should call each customer and review their information to ensure your files are up to date.
Pitch this exercise as a benefit. Explain to the customer that you have a policy of checking your files periodically in order to confirm their completeness and accuracy, and that you want to go over what you have on file in order to confirm that it is correct. When you are finished, ask if there’s anything else you should know that would help you serve the customer better, or if there are any shipping needs you don’t know about that you could help with.
Keep in mind, the shipping needs of your clients (shippers) will change often, sometimes seasonally. It’s important for you to know when these changes happen, so you can easily keep up with and be prepared to handle each shipper’s ever evolving needs.
Of course, with each shipment you’ll need to know the destination company’s name, address, contact person, and phone number. If your customers ship to the same places over and over, you’ll want to keep this information on file to make it easier and faster to prepare the documentation for each load.
This information is not only necessary for your carriers (how else will they know where to take the freight if you don’t tell them?), but it also gives you another potential shipper. If the consignee (the recipient of the shipment) is a manufacturer, they may have goods your carrier can pick up after dropping off your initial shipper’s load. If the consignee has freight to send back to the initial shipper—or even someone else in the same area—and your carrier can handle this load as well, the carrier gets a very productive round trip. The trucker does not have to return empty (which means generating no revenue) or take the time and effort to find a load on its own.
Be sure to find out in advance if the shipper requires a pallet exchange, which saves carriers from having to return pallets to shippers and saves shippers from having to replace pallets all the time. It works like this: Many types of goods are loaded onto pallets, which are then loaded onto trucks. Many drivers carry empty pallets in their trucks. When they receive a load on pallets, they exchange their empty pallets for those used by the shipper for the materials just picked up. When the driver reaches the destination, the loaded pallets are swapped for empty ones, replenishing the driver’s supply.
When you complete a load sheet for each shipment, include the identification numbers of the tractor and trailer that hauled the load. The carriers will provide you with their equipment numbers; it’s standard procedure.
Keep up-to-date information on carriers even if you don’t have any loads for them at the moment. By maintaining files on carriers, you will know immediately which routes they travel and what kinds of trucks they have. This will help you select a carrier quickly when a shipper calls. Keep the following information:
• Carrier’s name
• Type of carrier (contract, common, etc.)
• Physical address
• Billing address, if different from physical address