When you improve your freight brokerage operational efficiency, you create a more cost-effective business, which can increase your profit margins. More effective business operations don’t just mean removing expenses. Sometimes you need new digital tools to streamline operations. Learn several steps you should be taking to improve your brokerage’s efficiency and improve your bottom line.
What is a freight brokerage?
A freight brokerage is a business that serves as a go-between for freight carriers and shippers. They help match freight with available space on trucks. Both carriers and shippers find this service valuable as carriers get full trucks to improve their efficiency, and shippers get negotiated transportation rates.
For carriers, brokers might also serve as office staff with freight tracking to help guide drivers through routes and ensure on-time delivery. Brokers also ensure timely payment for carriers and owner-operators.
Just like other aspects of the supply chain, the Federal Motor Carrier Safety Administration (FMCSA) oversees and governs brokers’ activities.
Brokerages serve many key functions. They:
- Arrange shipments
- Ensure on-time delivery
- Negotiate fair pricing
- Audit freight bills for accuracy
- Build connections with reputable companies
- Maximize available space on trucks
- Help carriers run more efficient businesses
Why is operational efficiency important to a freight brokerage?
Logistics is all about time. If a freight brokerage is not using its time effectively, the percentage of a freight agreement that it helps arrange won’t cover its operational expenses.
The more money a brokerage spends on each transaction, the less money it’ll see in its bottom line. More effective operations translates to smoother transactions, and brokers can ensure carriers receive payments quickly to build better relationships.
If your freight brokerage can save time and resources, it will save money, which is why operational efficiency is so important.
7 ways to improve your freight brokerage’s operational efficiency
Start improving your freight brokerage’s operational efficiency now. Review these aspects of effective businesses and implement new strategies where your brokerage is lacking.
Implement the right technology for your business
Take time to review your technology against the market standards. Are your competitors making better use of technologies that help them do their jobs better? If so, it’s time to implement new tools to guide your business to success.
Technology can help reduce or even eliminate time-consuming phone calls and emails. By using pre-built workflows to track tasks and delegate them to team members accordingly, you can maximize your team’s skills and improve productivity.
Your tools should enable you to track shipments from pickup to delivery without check-in phone calls. They should also show you where your carriers have room for more freight so you can match loads with the click of a button. And technology can help you manage and build effective relationships, which is what a brokerage is all about.
Keep track of time spent on side tasks
You may not realize how much time a broker spends managing one business relationship compared to others until you start tracking it. Finding ways to help brokers communicate more efficiently with time-consuming clients can help make accounts more profitable.
To do that, you need to incorporate workflow processes that include capturing time spent on each area of the business. Side tasks can siphon off more resources than anyone realizes.
Freight brokerages often find that brokers spend too much time addressing preventable issues. For example, perhaps they scramble to cover loads later in the week, meaning they aren’t monitoring today’s loads appropriately. The right tools and guidance can promote a more proactive approach, which may lead you to greater success in the long run.
Create benchmarks and review progress to fix isolated issues
Access to data can make all the difference in running an effective brokerage. As you set up your technology, create performance benchmarks to better understand how well you’re doing. Take time each month to review your progress and look for opportunities to reduce workflow friction.
On the surface, it may appear your business is running smoothly. Shippers are happy because loads are arriving on time and carriers are pleased because trucks are at capacity. But you should understand what it costs you to keep everyone content. Data can reveal improvement opportunities, and help you make decisions about how best to close any gaps.
Choose the best freight-tracking system to increase visibility
The right freight technology can yield invaluable business insights and reduce time spent tracking loads. Choose one that’s easily integrated both with your existing brokerage tools, and popular carrier and shipping systems.
Seamless cross-platform integration improves communication and load visibility across the board, so everyone involved can remain informed at all times.
Keep up with documentation
Collecting the appropriate documentation as you go along, like service agreements or proofs-of-delivery (POD), helps protect your business and promotes trust among partners.
Many brokerage companies have a team solely devoted to tracking down documents and getting them in the right place. You can streamline the process, however, with technology that can also ensure document integrity and help you get paid faster. For example, you can set up automated reminders for drivers to upload PODs after dropping off loads.
Build better relationships with shippers
Shippers know the important role that brokers play in the supply chain. But that doesn’t always mean that the relationship is easy or even enjoyable. Keeping shippers happy with frequent, clear communication helps strengthen relationships and reduce customer churn, which can help increase profitability.
Brokers can automate status changes to shippers as freight progresses toward delivery. Updates may be sent at specific points of the journey, like when a shipment is loaded, and whenever there’s an unexpected change to the delivery timeline.
Provide fast and efficient customer support
When your team has data available in an instant, they can provide better customer support. Instead of taking a customer phone call, having to track down information and then return the call, your team should have systems and processes in place to immediately help partners.
Service efficiency increases productivity and improves customer relationships.
Increased productivity and better customer relationships
Operating an efficient freight brokerage isn’t just about the bottom line. It’s also about promoting strong partnerships with smooth workflows and clear communications. With the right technology in place, you can offer additional value to carriers and shippers, and ultimately become more successful.
FAQ
Successful freight brokers are skilled relationship-builders who understand market trends well enough to identify opportunities for shippers and carriers.
Freight brokers get more customers by reaching out to leads generated through referrals, calls, marketing campaigns, load boards, etc., and then nurturing them through the sales funnel.
Freight brokers have a bright future as the supply chain has ramped up considerably in the last few years. Carriers are continuously looking for ways to improve load efficiency, which is one way freight brokers add value to the supply chain.
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