Have you considered partnering with a digital freight brokerage but you’re feeling unsure as to whether or not it is the right move for your business? If this sounds familiar, then you are in the right place.
In this guide, we’ll explore what a digital freight brokerage is and what they do. We’ll also highlight the benefits of working with a virtual freight broker so that you can make the best decision for your company.
What Is a Digital Freight Broker?
Old-school trucking brokers once connected truckers with shippers in need of transportation services. Traditionally, these brokers accomplished this by communicating with brokers and truckers via phone.
As you can imagine, this approach was incredibly inefficient. Even so, many drivers still rely on old-fashioned brokerage services today.
However, digital freight brokerages provide a far more efficient solution. A digital freight broker serves the same basic purpose as regular brokers. The only difference is that they provide services via user-friendly platforms or mobile applications.
What Does a Digital Freight Broker Do?
Like traditional brokers, digital freight brokerages’ primary purpose is to help truckers connect with shippers who can help them. However, these service providers allow shippers to post their needs on a digital forum. Once these shipping requests are posted, truckers that use the platform can view the posts and bid on the jobs.
By using digital freight brokers, owner-operators and larger carriers no longer have to wait for a traditional broker to make dozens of phone calls in an effort to locate loads. Instead, they can simply access the digital brokerage platform themselves, conduct a query for loads in their region, and offer up their services. Simply put, digital freight brokerages allow truckers to find jobs in minutes instead of days.
How a Digital Freight Brokerage Can Benefit Your Business
Whether you are a shipper who does not have a long-term contract with a carrier or a trucker looking for an easy way to find loads, digital freight brokerages are the most ideal solution. Working with a digital broker can offer a lot of benefits to you and your business, many of which we have outlined below.
Provides Access To Real-Time Market Data
Digital brokerages provide access to real-time market data that you can use to guide your decision-making process. You can gain insight into the number of loads available, the average shipping prices, and much more.
Permits Task Automation
One of the main reasons why traditional brokers are inefficient is that they must manually perform a number of tedious tasks. Digital freight brokerages eliminate this pain point by providing automated document processing.
These platforms can process invoices, bills of lading, delivery documents, and other important paperwork. This coverage means that you can spend more time on dynamic tasks and less time waiting for your broker to process important documents.
Prioritizes Data Integration
Digital brokerage platforms accumulate massive amounts of data. Then, the platforms integrate all of the data into a single location. This ability makes it easy for you to obtain updates on current market conditions and various other information that could impact your business.
Allows For Integration With Shippers and Carriers
Digital freight brokerages make it possible for carriers and shippers to directly connect with one another. This integration means there is no middleman between your business and the company you are attempting to communicate with. As a result, you can quickly exchange information with potential customers, find jobs faster, and operate more efficiently.
Yields a Better Customer Experience Overall
Eliminating the middleman improves communication and yields a better customer experience overall. Providing your customers with a great experience is important when building your brand and developing a positive reputation within your industry.
Keeps Costs Low
Going digital allows you to minimize your brokerage costs. In turn, this can increase your total revenue and profitability. You can leverage these additional funds to invest in new equipment, market your business, or explore growth opportunities.
Opens the Door To 24/7 Access
While traditional trucking brokers do not exactly keep bankers’ hours, they are not available around the clock either. Typically speaking, trucking brokers are only available Monday through Friday, although some of these individuals also work on the weekends.
Conversely, digital freight brokerage platforms are available 24/7. This perk allows you to check current market conditions, search for jobs, or advertise shipping needs whenever you want. All you have to do is open your web browser or launch the digital brokerage app on your smartphone. It’s that easy!
Disadvantages of a Digital Freight Brokerage
Digital brokerages have many great qualities. However, there are also a few disadvantages of using a digital broker, including the following:
- May only offer a single type of load
- Possibility for platforms to only focus on flatbed or dry loads
- No personalized support
- Lacks any and all human elements
Of the potential disadvantages outlined above, most notably, most digital brokerages focus on only one or two load types. Specifically, digital brokerages tend to only include dry loads, flatbed loads, or both.
If you are involved in the shipping or hauling of specialized cargo, then working with a traditional broker might be the more beneficial option for your company.
Digital Freight Broker vs Dispatcher
Dispatchers and digital freight brokers serve distinct roles within the trucking industry. Modern dispatchers typically work directly for the carrier or the trucker, although third-party dispatching services contract with owner-operators and small trucking companies as well.
A dispatcher assists with the process of scheduling loads, provides administrative support, and serves as a resource for the drivers when they need information. On the other hand, digital freight brokerages are primarily concerned with connecting shippers and carriers in one place, which they do via the aforementioned digital platform.
Depending on how busy the driver is, dispatchers might use digital brokerages to find loads for them. Dispatchers can search for jobs, bid on shipping requests, and confirm delivery details with shippers via the brokerage platform.
Making a Final Decision
As you can see, there are many benefits associated with choosing to work with a virtual freight broker. Opting for a digital alternative instead of partnering with traditional trucking brokers can be a smart and money-saving move. A digital freight brokerage can also help you provide better quality customer service, give you access to real-time data, and streamline the entire process for oyu.
In light of these facts, using a digital trucking solution for broker logistics is a fitting option for most businesses. However, you should be sure to carefully weigh the pros and cons of each solution based on the unique challenges that your organization faces. By doing so, you can make the best decision for your company.
FAQ
The freight brokerage business is extremely competitive, but it has the potential to be quite lucrative as well. The biggest challenge that brokers face is learning how to differentiate themselves in the midst of a crowded market.
A digital freight brokerage is a platform that connects truck drivers and shippers. These brokerages typically charge truckers and shippers a small fee for using the platform. Frequently, these fee schedules are billed on a per-transaction basis.
Both traditional and digital freight brokerages have the potential to generate a healthy amount of revenue. The money that these entities earn is the margin between what they pay carriers and the amount that they charge shippers.
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