Biggest Freight Challenges for Brokers & How to Overcome Them?

Freight brokers play a crucial role in the trucking market as they facilitate transportation. However, with an industry as volatile as the trucking industry, it is evident that brokers have to face several freight challenges every year. 

From brokering deals with shippers to facilitating the movement of a shipper’s freight, freight brokers handle everything. The main responsibilities of freight brokers include connecting carriers with shippers, communicating with both of them, tracking loads and authenticating pickup and delivery. 

2022 has been a challenging year for the entire trucking industry, and freight brokers are not exempt from this. Given the modern-day trucking challenges, one of the pain-points for the freight broker is keeping the trucks at full capacity. 

This blog post discusses freight brokers in detail, how they work, and the freight challenges they are facing today and would likely face in the coming future while also finding out how to overcome these challenges.

How Do Freight Brokers Work?

A freight broker is a professional middleman who facilitates the transportation of goods by connecting shippers with carriers. Freight brokers work with a network of carriers that they have verified in advance for safety and reliability. 

The freight brokerage service plays a vital role in the supply chain as freight brokers help to ensure that goods are transported in a timely and efficient manner. In addition, they negotiate better rates for their rates, helping businesses save money. 

When working with clients, freight brokers have to keep a few different things in mind. Firstly, they need to better understand the shipping market and the different rates available. Secondly, they need to be able to effectively communicate with both shippers and carriers. Thirdly, they need to be able to track and monitor all the paperwork and documentation required for each shipment. 

Businesses working with freight brokers can save time and money while shipping goods. However, it is highly important to opt for a reputable broker who has extensive experience in the industry and who can work in your best interests. 

The Freight Challenges for Brokers 

As mentioned above, brokers have to face several freight challenges in the current times. Therefore, let us discuss some biggest challenges freight brokers are facing today and how they can overcome them. 

Freight Transport Challenges for Brokers

The most common freight transport challenges faced by brokers are discussed below: 

Inconsistency in Pricing 

A broker needs to have a consistent pricing strategy to acquire new business. They can win the business if they quote too high and lose it if they quote too low. Unfortunately, brokers approach pricing by relying on delayed data derived from prior knowledge and gut instinct. This leads to an inaccurate and inconsistent process that hinders growth. 

It is imperative that brokers focus on a more data-driven approach to pricing to be able to develop an effective pricing strategy. While having an extensive experience in pricing freight is favorable for brokers, the experience becomes more valuable when it is supported by the right data. 

To develop an effective pricing strategy, brokers should use a pricing tool that provides real-time rate information for a more updated overview of market conditions. With the help of a pricing tool that provides accurate information, brokers can anticipate a true market prediction and protect their margins and profits.  

Expanding Carrier Base 

Expanding the carrier base is one of the greatest freight transport challenges for brokers. A freight broker is known for their network of carriers. The stronger and growing carrier base, the more money they can make. 

Unfortunately, many brokers fail to develop their carrier network. They do not strategically approach expanding a strong carrier base proactively. Instead, they rely on loadboards and historical data to find new carriers.   

Having a large carrier network can directly influence pricing and procurement decisions. Therefore, a broker’s goal should be developing a large carrier network comprising several carriers they can turn to in case the first one fails to service a load. By expanding the carrier network, brokers can provide top-notch services to their customers. 

Removing Communication Barriers 

Creating better conversations with carriers can lead freight brokers towards unprecedented success. No broker wants to make hundreds of calls a day to book one load. However, the abuse of transactional carriers can be a huge barrier to a freight broker trying to scale their business. 

One of the main problems with transactional carriers is that they do not have any relationship with the brokers, so they have no reason to provide ideal pricing or service.  

It is better that brokers should pay attention towards building stronger relationships with their existing carriers. This can be done by removing communication barriers and having a meaningful conversation with the carriers to learn more about their business and expectations. 

Adopting Advanced Technology

Another one of the biggest freight transport challenges for most brokers is not adopting the right technology. The transportation and logistics industry is renowned for not keeping up with advanced technology, and brokers are no exception. 

While paperwork and spreadsheets may have helped brokers get their job done a few years ago, they cannot rely on them anymore. Following obsolete methods does not help in staying competitive. 

In fact, most brokers were not equipped with technology until the COVID-19 pandemic. Fortunately, technology has been a savior for many brokers. Equipping with the right technology, especially using a freight broker TMS, helps fill the gaps, improving overall efficiency. 

Nowadays, brokers are adopting advanced technology and using effective transportation management systems to reduce paperwork and streamline their processes. Although brokerage businesses are relationship-based, adopting advanced technologies can help them build relationships that are easier to maintain and grow. 

It’s important for brokers to have the know-how of advanced technologies so they can look for new capacity, increase lane coverage, access real-time market data, and automate manual tasks.  

In a highly competitive and regulated transportation industry, freight brokers can no longer rely on traditional methods to book freight. Therefore, it is significant to adopt new technologies and automate business operations to stay competitive and stay ahead of your competitors.

Also, they must be proactive and prepared to face a sudden shift in the market by staying updated about the upcoming trucking trends.

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Sara Naveed is a creative and digital content writer who uses her creative skills to develop and edit professional web content. Being a writer has always been her dream. She earnestly hopes people appreciate her writing—an asset she deeply covets. Using her 8+ years of working experience, she writes for trucking industry experts who are always looking for better technological solutions to their problems.

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