Freight brokerage businesses are critical third party service providers that help shippers find carriers for their merchandise. This service connection helps to ensure that after a company sells a product that they can get it to their customer, regardless of what the item is or where the customer lives. In exchange for this valuable service the freight brokerage business receives a fee based on the amount of legwork they have to do and the expenses they incur.
Significance
The significance of freight brokerage business is simple, they ensure products are delivered. Without freight brokerage businesses, companies that sell oversized, hazardous or delicate products would need to spend a lot of time and money finding the right carrier to transport their products. For example, companies that manufacture heavy machinery can’t just Fed-Ex or UPS their products to their customers. They need specialty delivery services that have the right equipment to haul their products safely from the manufacturer to the intended destination safely and quickly, as well as the right training to load, secure and unload the machinery without damaging it or the people delivering the machinery.
Function
Freight brokerage businesses serve one function, to match shippers with appropriate carriers. To execute this function the freight broker needs to establish and maintain an extensive database of carriers organized by what types of product specifications they are capable of working with, such as oversized, hazardous or delicate. When a customer contacts the freight brokerage they take down several pieces of information from specifications about the product to when and where the product needs to be delivered. Freight brokers can also help to find shippers the fastest or the most inexpensive shipping method for their products. For example, they may recommend that an item be shipped via a barge carrier as opposed to an air freight carrier to save the shipper money.
Time Frame
Timeliness is one of the main selling points used to promote the services offered by freight brokerage businesses. Since the freight broker has an established database of freight carriers and an in-depth understanding of shipping options, they can quickly identify the best options for their clients. This saves the client both time and money. Depending on the type of item being shipped and the special requirements that the shipment has, a freight brokerage business can find the best shipping option in a matter of minutes from when the request is first placed.
Size
Freight brokerage businesses can come in a number of different sizes. There is relatively little equipment beyond a computer, Internet access, a phone and a fax, freight needed to run a freight brokerage business. Because of this it is possible to run this type of business with just one or two people. Also, because most of the business is done over the phone or online, freight brokerage businesses can be run from a home office. In areas where there is a lot of shipping done, such as Seattle, Chicago and New York, numerous freight brokers and a team of support staff are required to keep up with the demand of the market.
Considerations
When selecting a freight brokerage business to work with there are several considerations that need to be examined. First of all the reputation of the freight broker needs to be evaluated. This can be evaluated by working with the Better Business Bureau to see if they have any complaints filed against them, as well as by looking at how old the company is. The older the company is the more likely it is that they do good work. Next you need to compare their fees against other freight brokerages in your market.
