Third-Party Logistics Brokerage: How Owner Operators and Freight Brokers Work Together

For years, countless songs such as “Help!” by the Beatles have been written reminding us of the same message - that regardless of our efficiency, we all need somebody. People have leveraged relationships throughout history and across industries to get the job done.

Within logistics, third-party logistics brokerages have risen to answer that call. A freight broker works on behalf of shippers and carriers to streamline transportation services and the working relationship. Efficiency is important because while shippers are responsible for moving items from one point to the next, carriers are the driving force that ensures successful delivery.

Not all carriers prioritize hiring a 3PL freight partner, but these partners have proven their worth in the logistics industry. An August 2022 press release states, “the global freight brokerage market amassed revenue of $48.1 billion in 2021 and is expected to hit $90.7 billion by 2031.” With a projected global market size of $82,181.65 million by 2028, 3PL companies are establishing themselves within the supply chain. Why?

Owner Operators Lack Negotiating Power in Direct Customer Relationships

Truck drivers who operate on their own have a lot on their plate. Owner-operators must find loads, secure orders, negotiate rates and do all the accounting. Every moment spent on unsuccessfully contracted loads is valuable time and money lost. Those resources are essentially stolen from their profitable time in the driver's seat. Conversely, it is easy to miss significant opportunities that pop up during a day on the road.

Third-party logistics brokerages offer bargaining power to owner operators. By taking on the communication with direct shipper relationships, a third-party logistics brokerage can ensure that owner-operators are getting high-quality loads. And it all happens while keeping costs lower for shippers.

Partnerships Offer Insight Into Freight Volatility and Demand

Freight brokers aim to be experts in the supply chain management market. Now, that covers a wide range of tasks and varying regulations. The closing in of a tight market may take time for a localized owner-operator to notice. However, a third-party logistics brokerage will recognize and respond appropriately. 

This is especially pertinent when dealing with the customer side of logistics services. Significant market shifts, such as the semiconductor shortage, put pressure on every supply chain link. Pressures are often starting with the end consumer. Carriers who work with a 3PL of top quality can trust their customers are getting the communication they need from full-service market experts.

Benefits of Owner Operators Partnering with Freight Brokers

It can be easy for drivers to feel that partnering with a 3PL and a freight broker is trading away the freedom they want from being an owner-operator. However, the benefits of 3PL freight are more than what meets the eye. Such benefits include:

• Control Over Carrier Route. Although a freight broker can connect drivers with loads, owner-operators still have control over which to accept. Building a connection with a brokerage over time means drivers will have an advocate looking for the loads in the lanes that support their drivers.
• Consistent, High-Quality Loads. With a high-level view of the local supply chain, a brokerage can ensure their drivers are not stuck with deadhead miles. The right brokerage will ensure that all 3PL freight transport is efficient and high-quality.
• Niche Connections and Opportunities. Every truck driver has preferred loads dependent upon their truck and trailer capacities. Carriers can get the eyes and experience of a whole team to find their niche loads, such as LTL, by partnering with a top-quality brokerage.
• Safety and Maintenance Regulation Compliance - It can be hard to comply with state and local mandates. A 3PL freight partner supports their carriers by tracking important mandates, safety, and maintenance information.
• Customer Communication. Freight forwarding services support their carriers and end customers from dispatch to delivery. By co-utilizing modern GPS and TMS, carriers will have someone in their corner 24/7 in case of delay or other load issues. 
• Accounting Assistance. 3PL services add a layer of credibility when a driver is trying to negotiate rates that match the service quality. When tax season comes around, carriers also gain a second set of eyes on their business expenses.

Improve 3PL Freight Services for Your Owner-Operator Fleet With Capacity Solutions

A top-of-the-line third-party logistics brokerage practices over-communication with every team member. This ensures everyone is in a winning position. From negotiating rates to taking care of customer disputes, your 3PL freight team becomes an extension of each driver's goals. To learn how a 3PL can get you to your capacity goals, start a conversation with Capacity Solutions by Geodis today!