As a freight broker you are providing a service to the shipper and the carrier. You’re service to the shipper is beneficial as you are helping them find trucks to transport their loads. If the shipper can’t obtain a truck, they can’t deliver their customer orders, and the shipper makes nothing.
As mentioned in other articles, if the carrier is operating correctly, they are using a broker to obtain a backhaul. In short, to re-locate their equipment to a location to obtain a load from one of their contracted customers. This allows the carrier to provide exceptional service to their customer as well as obtain a load with a contracted rate.
Yesterday we received a call from a client that had a potential shipper promising more loads with a lower rate. Our advice to this client, provide the shipper with a realistic rate. In other words, a rate that would reflect what it would take to obtain a truck for that load. The promise of more loads in the future meant nothing. You may get the load, but if the rate is too low you’ll never secure a truck. That scenario isn’t good for anyone.
You, as a freight broker, must have a rate high enough to attract a truck to haul the load, especially in today’s economy. According to a recent survey sponsored by Averitt Express, over 75% of shippers said they will ship more freight this year. The ATA cited a strong economy for the increase. With more freight and a shortage of trucks, the shippers will pay more as the trucks are demanding more.
It’s a supply and demand issue. The demand for trucks is high while the supply of available trucks is low. Don’t low ball rates!
Thanks and talk soon…