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Freight Agent concerns when choosing a Freight Broker/3PL

freight agent

Most of our freight agent offices have worked many years in the freight brokerage industry sacrificing many nights and weekends working the phones. Through tireless efforts, they’ve developed a loyal and dependable customer base. Our freight agents have an entrepreneurial spirit and a fierce commitment to outstanding customer service.

At Cargo Transit, our hard working freight agents have become a part of a reputable and responsive freight broker that gives them the respect and appreciation they deserve. They receive quick responses and support in growing their business.

If you are considering a change to another freight broker, here are some items to think about before making a decision:

  1. Environment – How do you feel when you communicate with the prospective freight broker? Do you sense that person truly wants to assist you and have you join the team as a freight agent or do you feel you are speaking with a recruiter just trying to earn a commission? If you are speaking with the recruiter, it is important to also speak with someone in carrier compliance, accounts payables and accounts receivables. Ask pertinent questions regarding your customers and carriers, such as flexibility regarding customer credit lines, carrier procedures for setup and payment, special billing requirements for your particular customers, etc. Do you feel the prospective freight broker is organized and responsive or merely giving you a sales pitch and telling you what you want to hear? The way you are made to feel is a direct reflection on how your customers and carriers will feel when they need assistance from the prospective freight broker.
  2. Marketing Advantage – Look for a freight broker that can enhance your ability to develop customer relationships with shipping companies. This can be done with certifications by your freight broker. Many large shippers are required to give vendors enrolled in a diversity program a certain percentage of their business. The same holds true for shippers working with federal and state contracts. Examples of some of these certifications are DBE, NWBOC, WBE and SBA certifications.  These certifications should not be underestimated. They can bring in thousands of extra income each year to each freight agent.
  3. Support & Special Requests – Will the prospective freight broker cater to your special needs and requests for you, your carriers and your customers? Most mid-size to small freight brokers will be very accommodating to special requests. On the flip side, most special requests are difficult for large freight brokers due to the volume.

When you have a question, can you expect the prospective freight broker to answer the phone with a live person or voicemail jail? Does the prospective freight broker have a decision maker in the office every day with the authority to make decisions critical to your business or does your question need to climb the corporate ladder before it is answered? Freight brokerage is a fast moving business that will wait for no one. When you ask a question of the freight broker, you need and deserve a quick response. Voicemail jail or waiting days for an answer to your question is not acceptable.

  1. Financial Stability – The prospective freight broker needs to be financially sound. Don’t just take their word for it. Ask for current credit reports from multiple agencies that are well known, such as Internet Truckstop, DAT 360 and Ansonia. These financial scorecards are what your carriers will be looking at if you join this freight broker.

Ask for carrier references with a written release of credit information. Contact the carriers and ask pertinent questions such as credit terms, high credit amount, average balance, how long they’ve been doing business together, average days to pay, if the account is in satisfactory standing.

Ask for freight agent references. Ask the freight agents questions such as the following: are their carriers paid timely, do they ever have a carrier refuse a load due to a bad credit rating, are commissions paid timely and as promised to the freight agent, is the freight broker actively working on A/R on a weekly basis. Use the answers to get an overall sense of the company’s financial stability from the freight agent.

  1. Reputation – Look up the prospective broker on “broker watch” type services such as Internet Truckstop and TIA’s watchdog service. Get freight agent references and ask them questions about the freight broker’s business practices. Get carrier references and ask them if they are treated fairly by the freight broker.
  2. Technology – Look for a freight broker with a solid (TMS) Transportation Management System. If the system can offer flexibility to you and your customers and carriers, that is an added bonus. Look for a system that isn’t just available for you to enter loads and generate rate confirmation sheets. A solid TMS will give you the tools you need to make intelligent business decisions and should improve your efficiency. An example of some basic items that a solid TMS should offer freight agents are lane analysis, customer analysis, carrier lane history, Bill Of Ladings, various searching features and commission reports just to name a few.
  3. Commission Rates – Looking only for the highest commission rate should not be your most important consideration. This article discusses many concerns. But when you are looking at commission rates, be sure to get it in writing! Ask questions regarding hidden fees and the chargeback policy. Ask for freight agent references. Be sure to ask the freight agents if they are paid on time and as promised. If you don’t get it in writing, don’t believe it.
  4. Healthy Freight Broker – A Freight broker/3pl must be able to balance the risks involved in the logistics management business. Try not to align yourself with a company that will do business with anyone, anywhere, anytime thereby putting the company at an unnecessarily high risk. You also do not want to align yourself with a freight broker that tends to shy away from opportunities with a limited amount of risk. A healthy freight broker will find the right balance. You can find a healthy freight broker to align with if you ask the right questions.

There have always been unethical and immoral freight brokers. Unfortunately, that is not likely to change. Our industry also has many moral, ethical and professional freight brokers.  Freight agents looking for a freight broker to call home must be diligent and detailed with the search to ensure alignment with right company. I sincerely hope freight agents looking for a new home find this article helpful.

Cargo Transit is a NWBOC and DBE certified company. Our NWBOC certification is a national certification. We are also DBE certified in 28 states. We have been in the freight brokerage industry since 1999. We are proud of our agent based program and we recognize it has been an integral part of our success. We are currently looking for experienced freight agents. If you are interested in speaking with Cargo Transit about our freight agent program, feel free to contact me. #FreightAgent #FreightAgentProgram #3PL

By Lisa Fouts, President of Cargo Transit, Inc. 828-645-9828

 

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