Understanding Broker Operations in Trucking

[watch video below]

Do you feel like you are getting short-changed by brokers in the trucking industry? Want a better understanding of how their operations work? In this blog post, we’ll dive into brokering operations with our good friend David Dwinell, trucking company owner and broker since 1981. This is the second part of our three-part series on this topic, this is just 1 of over 50 topics of custom learning, avoid the startup trial & error pitfalls!

Operations: Knowing How and Why Brokers Act is a Money-Maker for Your Trucking Company

First, we’ll start by discussing why it’s essential to understand how brokers work. If you learn freight brokering, you’ll be less at risk of being taken advantage of by untrained brokers. These are the individuals who think they are hiring your motor carrier company, but they couldn’t be more wrong.

Brokers Find and Solicit Shippers

Brokers serve a crucial role in the trucking industry by finding and soliciting shippers. They provide freight rate quotes based on supply and demand. Shippers and brokers are the buyers – the demand – while motor carriers are the sellers – the supply.

Understanding the marketplace you operate in and the role brokers play in it is vital to your success as a motor carrier.

Brokers Sell Their Services to Shippers

Next, brokers sell their services to shippers by finding and matching motor carriers to their customer’s shipments. Shippers are always on the lookout for more and better trucking services. As a motor carrier, all you have to do is solicit the shipper directly, potentially bypassing the broker and securing a deal for yourself.

In some cases, your market freight rate to the shipper may be the same as the broker’s, or even less.

Brokers Negotiate and Arrange Transportation with Motor Carriers

Brokers also handle negotiations and logistics of transportation with motor carriers. As a motor carrier, you should require the broker to complete your credit application. If you are accepting the broker’s freight rate, you are extending credit to them.

A downloadable one-page credit application for your trucking operation can be found at LoadTraining.com. All forms in the manual are customizable to your operation and can be copied at will.

After ensuring the broker has a solid credit history, complete their contract and rate confirmation by signing it. Your due diligence in obtaining a completed credit application from the broker will help ensure you get paid.

Take this crucial credit caution to heart: Make sure to check credit for every new broker you work with.

LoadTraining

Once again, we’d like to thank David Dwinell and the team at Load Training for sharing their insights on brokering operations in trucking. Stay tuned for more content with David, as we’ll discuss claims in the coming weeks.

If you’re interested in contacting David and his team, or enrolling in one of their training courses, you can visit their website at LoadTraining.com.

Happy trucking and good luck with navigating the world of brokering operations!

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