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Originally Posted On: https://www.learnfreight.com/why-shippers-hire-freight-brokers
Why do shippers hire freight brokers? It costs them money. They could just reach out to transportation companies directly and get their shipment to wherever it needs to go. So, why don’t they? While some shippers do just that, there are some good reasons that many shippers prefer to hire freight brokers instead. Let’s review those reasons?
1. Freight brokers have exposure, which means they have access to load boards and databases of transportation companies. Therefore, they can expose this shipment to many carriers and transportation companies so it can get covered quickly and shipped immediately if necessary. In contrast, a shipper may or may not have this kind of access. Therefore, they benefit from hiring a freight broker who can quickly move their cargo.
2. Freight brokers have tools to screen motor carriers and other transportation companies for safety. They can determine if a carrier is safe to transport the cargo. This is critical, because if the carrier has a poor safety rating, the cargo may get damaged in transit, and that will create all kind of other problems. Again, freight brokers are trained to determine which transportation companies have good safety ratings and represent a lower risk to the shipment factor, and they have the right tools to get it done. In our freight broker training course we discuss motor carrier safety screening in greater detail.
3. Pricing! Again, freight brokers have the tools and experience to price shipments correctly. If a particular shipper doesn’t ship regularly, they may not know what to pay to transport their cargo. However, freight brokers can quickly understand what it will cost and price it correctly. In many cases, they can negotiate a lower rate on behalf of the shipper, saving them money.
4. Some shippers may not have established credit, and therefore, many transportation companies will not be willing to transport their cargo because they will not be able to factor this particular load with their factoring company, making them too risky of a prospect. There would be a chance that a carrier would not get paid by this shipper, so they will choose not to work with them. However, by employing a freight broker, the transportation company will only be concerned with the freight broker’s credit. At this point, if the freight broker has good credit, then transportation companies will be willing to work with them, and the shipper will solve the company’s lack-of-credit issue.
5. Freight brokers are skilled in problem resolution. There are a lot of problems that can occur with a shipment. For example, a truck may break down, damage may occur, or an accident may happen. These situations would otherwise have to be solved by the shipper, who is really not in the business of solving these types of problems. It is more convenient to have a freight broker handling these situations on their behalf. This makes it more convenient and stress-free for the shipper.