Getting the Most Out of Your Freight Broker: Part 2
Part 2 of our 3-part series on how to get the most out of your freight broker has us focused on building a strategic brokerage partnership. Shippers utilizing freight brokerage services for their transportation have two very basic considerations: desirable price point and reliable, on-time delivery. But when it comes to choosing a brokerage partner, what more should you really be looking for? Price and dependability may be fairly straightforward but they don’t exclude the importance of partnering with your freight broker to strategize on how to better meet your core objectives. A closer, more strategic partnership with a brokerage provider is the key to success for shippers who want to consistently achieve reduced cost and a high level of performance.
The difference between a tactical provider and a strategic partner is significant — a tactical provider often focuses on immediate goals that reduce transaction costs on a short-term basis. But a strategic mindset can multiply those results by:
- Looking beyond the immediate necessary needs to find incremental efficiencies
- Reducing resource costs both internally and externally
- Enabling greater agility in decision-making
- Improving the shipper’s ability to adjust to changes
So what does a “strategic” brokerage partner look like? How can you tell if your freight broker is being strategic in its decision-making? Use this checklist to find out:
1. Does your freight broker take the time to really understand your business model, including short and long-term objectives, competitive pressures and consumer demands?
Even a basic understanding of the strategic elements within your business model and key market metrics can ensure tactical decision-making is fully aligned on all fronts.
2. How does your broker utilize market intelligence?
Information is currency, even in the commodity-based environment of freight brokerage. Does your broker demonstrate their knowledge of industry trends and developing issues? Do they proactively anticipate and identify both barriers and opportunities in the marketplace as they evolve?
3. How thorough is your broker’s carrier management program when compared to other providers?
A carrier management program should do more than identify the least-expensive providers; it should include carrier vendor vetting and selection that is strategically matched to your specific needs. Carried out long-term, this process helps you maintain an optimal balance of pricing and service performance from your freight carriers.
4. Is your broker strategic in how they approach and improve their own business?
Do you see a proactive and intentional effort to stay on the leading edge of technology, systems and skill training? Don’t expect continual improvement in your freight program if your broker consistently neglects the advancement of their own business.
To produce positive, repeatable results over time, freight brokerage providers need to incorporate strategic thinking in the mix. A strategic brokerage resource has the power to influence results by identifying long-range issues and applying their logistics strength to find the most successful solutions. Achieving exceptional return on your brokerage investment requires the strategic expertise to make informed decisions, apply supply chain efficiencies and create actionable, value-added services.
Maybe it’s time to look beyond your brokerage partner’s pricing to make sure you’re consistently getting the benefit of sustainable, well-executed strategic practices.