Freight brokerage is a business with many participants and few clear leaders. Most brokers build their business around a combination of relationships and specialized knowledge built up over years of experience, but getting started and sustaining a business can be a challenge to even the most experienced of brokers. Bruce McMann, head of International Distribution Logistics of Mission Viejo, California, and a veteran of the logistics business for over 20 years, sat down with me for an afternoon and shared a few strategies that have helped him get ahead.
Price: In an industry as established and competitive as freight, price is always going to be a factor. New entrants often start with price and, once established, will seek to add value with additional services. Given the lack of visibility into pricing particular shipments across multiple vendors, bulk discounts, and daily volatility affected by changing fuel surcharges, getting a handle on your own pricing, let alone your competitors’, can be difficult. Couple that with legacy National Motor Freight Classification (NMFC) pricing structures left over from the days of regulated trucking in America, and delivering something as simple sounding as a freight quote can be a daunting challenge. Many brokers therefore choose to leverage brokerage software platforms or systems that deliver extensive reporting and analytics functionality. Translogistics Inc. director Tim Thomas states, "Businesses that use multiple partners and don’t have all their freight managed and unified through a single TMS have additional challenges in that they cannot truly grasp the value of the rich data that can be provided when they bring it all together.”
Service: As McMann points out, “Price gets them in the door, but service keeps them coming back.” When a transaction is agreed and customer secured, many brokers feel their job is complete. To ensure his clients’ shipments are closely monitored and managed, however, McMann has implemented a track and trace solution leveraging drivers’ mobile phones - so no matter which carrier he selects, he is able to offer his clients full visibility. This saves him and his clients time, and gives them both peace of mind.
Communication: “Call them before they call you,” McMann recommends. Being proactive with clients is often a major selling point, as a simple courtesy call allows you to share information and smooth out potential misunderstandings before they occur. Oftentimes it is the uncertainty rather than a particular error in a shipment that causes clients the most concern, as uncertainty creates errors of their own, and these errors are often time-consuming and expensive. Set client concerns at ease by picking up the phone.
Speed: “As soon as an email comes in, I try to get back to them within two minutes,” says McMan. Of course, McMann also has a staff to help him with customer inquiries, which not all brokers can afford when they’re starting out. But as a general principle, rapid response can set your firm apart from the competition. When one of McMann’s trucks was late, his tracking system alerted him to the problem, and he was able to contact the driver before it turned into a serious delay.
Reliability: They say price is paramount, but consistency is key. Earning a reputation is one of the hardest things to earn but one of the easiest things to lose, as Warren Buffett is famous for saying. In the case of freight, building a reputation for reliability is a key differentiator. When a client can feel confident his or her shipment will be handled in a secure and timely fashion, that is of tremendous value and ensures he or she will keep coming back for more business. We all wish to be reliable, but few achieve it, so the few that do will earn the respect of their clients all the more.
Anthony Sabbadini is the founder and director of SCTracker, a GPS fleet tracking system that enables shippers and logistics providers to accelerate deliveries, lower fuel spend, and increase service levels.