While the shipper customer drives the top line revenue number of any brokerage operation, it is the ability to source capacity efficiently that drives the profitability of the company. Throughout the industry, the focus on capacity (retention and transactional coverage) is market driven and reactionary.
Building a strong core carrier network is essential regardless of the market situation. While there appears to be a general shortage of trucks (aging population of drivers, ELD compliance, market pressures), it is often just a shortage of trucks available to you. Your network is balanced when the market is balanced, but when the pendulum swings either direction too much, the carriers will depart for more profitable freight elsewhere.
You must understand the carrier’s needs (take the time to ask questions and learn about what drives them and what they are trying to accomplish):
1) Due to the high cost of their operations and assets, carriers are often driven by cash flow needs. (how quickly do you pay? Do you have multiple payment options?)
2) Carriers are comfortable moving within a particular zone of operation. (Does your freight regularly keep them within that zone? If you move them out of the zone, do you provide options to get them back to the zone?)
3) Carriers work with companies that they trust and show them respect. (How do you communicate with carriers? Do you thank them? Do you recognize their efforts? Do you work with them to solve problems or just blame them?)
4) Carriers want consistent utilization for their equipment. (Do you provide regular freight opportunities to the carriers? Do you work with them to identify opportunities that serve you both well?)
Of the thousands of carriers in your network, how many move more than 1 load per month, per week, per day? Having 10000 carriers in your network has little value if they only move your freight when it suits them or when you provide the highest rate.
Leverage your stronger carrier relationships by showing that you are interested in helping them achieve their goals. Report to them how they work with you (metrics, volume, payment history). Learn from them how your company fits their plan and how well you are positioned to retain and expand that relationship.
Often, brokers are the de facto sales force for the carrier so treat the relationship accordingly. Communicate regularly about plans and activities designed to find new freight for their fleet(s). Work in tandem to identify shippers and customers that will support your shared goals.
As pressure from automated brokerage programs continue to undermine the transactional business model, brokers must strengthen their relationships with carriers to compete. Share the love and commitment to your carriers to position your own company for success. Carriers are true partners in growing your brokerage.