What to Look for When Searching for the Best Freight Broker in a Tight Market (hint: the process involves more than rates!)

When looking for a good freight broker, cheaper isn't always better. We break down what to look for in a successful broker.

Are you tossing and turning at night worrying about what to look for when faced with choosing the best freight broker? Rest assured, you’re not alone.

And if you think that finding the cheapest rate is the answer, it’s best to think again. Selecting the best freight broker involves way more than price considerations.

Without a doubt, shipping capacity in 2020 was quite a challenge. And as much as we don’t want to admit it, you might as well buckle up for an even more challenging ending to 2021.

A recent article in Supply Chain 24/7 states that (based on a Logistics Management readership survey of more than 100 freight transportation, logistics, and supply chain stakeholders) this year's Peak Season “will be more active than a year ago due to higher import levels, new orders growth, increased demand, an improving economic outlook, and the pandemic being in decline.”

According to one survey respondent, “As the economy is opening back up, more companies are starting to ship out overdue orders, which will be reflected in this year's Peak Season.”¹

Also, a CNBC article cites a Salesforce forecast projecting that “retailers in the U.S. will spend $223 billion more in the second half of 2021 than in the same period in 2020. The article continues, “the amount represents a 62% increase from last year. It’s comprised of an additional $12 billion spent with suppliers, $48 billion more in wage expenses, and $163 billion extra in logistics costs.”

Further, “Salesforce VP and GM of Retail Rob Garf said consumers, in turn, should expect higher prices. The forecast comes as trucking rates are at an all-time high — some 49% higher than 2020 and 83% higher than pre-pandemic times. Demand for e-commerce warehousing is also spiking as online buying booms."

With companies struggling in a tight market and recovering — or still navigating significantly disrupted supply chains from the pandemic — we’re seeing shippers tightening down on transportation networks to maintain a better handle on transportation costs. When you are considering a capacity solution, freight brokers are an excellent alternative to asset only strategies. Freight brokers can provide a strong mix of cost and service while providing the capacity you need.

Now is the best time to get your freight brokers in place and begin building relationships before Q4 2021. Choosing the best freight broker partner is crucial. But it’s vital that the selection process include asking the right questions to select a reliable logistics partner.

What to look for in a freight broker includes far more than just finding the cheapest rates. Following are four key points to cover during the selection process:

Market Intelligence

Look for a broker that brings data-driven thought and insight to the conversation. Partner with brokers who understand the market and articulate information about your specific industry. Your freight broker should be able to provide insight on what’s happening around the corner and share predictions on potential disruptions specific to industries and regions.

A great broker should also be able to explain market rates and what’s driving the highs and lows per region, lane, and mode. They should also be leveraging historical data and inputs to provide clear pricing and predictions. This market intelligence enables customers to make more informed decisions. Among the current market intelligence that you should now be hearing about includes predictions focused on back-to-school impacts and Peak Season.

Transparency and Visibility

Look for a broker that brings data-driven thought and insight to the conversation. Partner with brokers who understand the market and articulate information about your specific industry. Your freight broker should be able to provide insight on what’s happening around the corner and share predictions on potential disruptions specific to industries and regions.

A great broker should also be able to explain market rates and what’s driving the highs and lows per region, lane, and mode. They should also be leveraging historical data and inputs to provide clear pricing and predictions. This market intelligence enables customers to make more informed decisions. Among the current market intelligence that you should now be hearing about includes predictions focused on back-to-school impacts and Peak Season.

Proactive Communication

One important consideration when selecting a freight broker that is absolutely non-negotiable is proactive communication. You should expect nothing less, period. Your freight broker should be pushing out information before you ever need to ask for it, such as these regular communication touchpoints and notifications:

• Driver dispatched for pick up.
• Driver arrives at pick up.
• Shipment has been picked up.
• Estimated time of arrival for delivery.
• Driver arrived at delivery.
• Shipment is delivered and completed.
• In and out time, the driver has arrived and is completed.

Carrier Performance

Your freight broker should be laser-focused on meeting and exceeding service level performance. We recommend working with a freight broker that has a wide range of carriers with a solid track record of doing business as well as utilizing carrier scorecards to select the best carrier every time.

Also, focus on minimizing load rejections or, if the driver is late for pick up, the ability to source a recovery quickly to minimize disruptions. On top of performance, make sure your brokers are rating the freight right and getting the trucks to pick up and deliver on time.

 As for some final questions, you can also ask your broker:

• Can you flex to meet market challenges?
• As volumes and capacity shift, are you prepared with a contingency plan to avoid costly disruptions?

We know it's going to be a competitive Peak Season. That means it’s time to be selective and choose a knowledgeable freight broker that will provide market intelligence, transparency and visibility, proactive communication, and drive carrier performance as outlined above.

Introducing Velocity Transport . . .

We’re excited that Velocity Transport has recently joined the GEODIS global supply chain network. This acquisition expands GEODIS' Capacity Solutions offering in North America at a critical time as the industry continues to face ongoing driver and truck shortages.

Acquiring Velocity Transport will help meet the increased customer demand for more transportation alternatives to ensure their supply chains remain agile and effective.

Velocity Transport provides freight brokerage services that include refrigerated and temperature-controlled freight, flatbed and less-than-load (LTL) trucking, intermodal, van, and specialty options. GEODIS has the expert team in place to meet and exceed our customers' expectations with all of the best practices

Contact GEODIS Capacity Solutions today. We’ll help guide you through Peak Season and capacity while controlling costs by relying on market intelligence, driving compliance and performance, as well as agile course correction supported by experts.

References

¹Berman, Jeff. “LM reader survey indicates 2021 Peak Season is expected to be more active than 2020.” Supply Chain 24/7, 19 July 2021. https://www.supplychain247.com/article/lm_reader_survey_indicates_2021_peak_season_is_expected_to_be_more_active_

²Holland, Frank. “Salesforce projects retailers will pay $223 billion extra for goods in the second half.” CNBC, 20 July 2021. https://www.cnbc.com/2021/07/20/salesforce-retailers-will-pay-223-billion-extra-for-goods-in-2h.html?mod=djemlogistics_h.