The Freight Brokerage Business – Basic Information and Finding Trucks
- Author Ray Donovan
- Published December 1, 2008
- Word count 474
Freight brokers are basically middle-man between the shipper, buyer or owner of the product and the trucking company that moves the freight. Freight brokers will accept an order for a load to be moved from the customer and arrange for the transportation of the goods by locating a carrier to move the load. Freight broker’s revenues are generated by the freight broker simple paying the carrier less than what they are being paid by their customer, which then becomes the freight brokers "Margin" or profit.
This freight broker business model, for all intents and purposes, sounds simple but in actual fact, it is not. Freight brokers, that have a customer or a group of customers, have to find trucks in order to move the freight and in turn make their margins.
Finding Trucks – Load Boards
So you the Freight broker now have freight that you need to move. Where do you find the trucks to move the freight? Before the age of the internet, trucking directories were the best friend to the freight broker. Freight brokers would scour the directories and pound the phones in order to find a trucking company that had an available truck to haul the load. This was a very inefficient method of the freight broker making their margins. Since the age of the internet, there are a number of "Load Boards", that allow freight brokers to post their available freight to carriers that are looking for available loads. The freight brokers can also search these sites for carriers that have posted their trucks and are looking for a load. Ultimately, supply and demand will dictate whether the freight broker needs to call a carrier or whether the carrier will call the freight broker for the available freight. If there is more freight available than there are trucks available, then the freight brokers will need to do all the work and initiate the contact with the carriers. If there are more trucks than freight available, then carriers will need to initiate the call to the freight broker. There are very few freight markets in North America where the balance is equal between available freight and available trucks.
These load boards normally charge a monthly fee to both trucking companies and freight brokerage companies for access to the postings. Some load boards specialize in specific types of freight and each has their specialties such as cross border freight, interstate freight and Canadian freight. The freight broker will need to do their research into what load board would be the best fit for their business, both in monthly cost and in available trucks. Additional services offered by the loads boards such as assistance with establishing rates, fuel costs and credit services, would all add in providing tools that the freight broker can use in running and growing their freight brokerage businesses.
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