The world of logistics providers can be daunting, and flat-out overwhelming. I talk to customers daily who tell me they have had hundreds of calls and emails from Brokers asking to quote their Freight.
These two words, Broker and Freight are used too loosely in the industry today. This article will help to define some key words and help explain the difference between different types of Logistics Providers, and hopefully make things clear as mud for those of you shopping for a better partner.
A Freight Broker in the simplest explanation, is a 3rd Party who coordinates the movement of freight, and acts as the intermediary between shippers, receivers, and trucking companies. Within a brokerage, you have representatives looking to match freight with their partner carriers to maximize their utilization, while others represent the shippers, or customers to minimize their spend and increase efficiencies. Like any industry, there are some that operate with high moral standards, integrity, safety and respect, and some that do not. The best know they control only one piece of the puzzle, and that is the communication.
Industry Keywords- In simple terms:
- Asset Carrier– Trucking companies that operate under their own Trucking Authority, and have Real Trucks, and Real Drivers under their leadership. Provides Strength in the Marketplace
- Broker only – No Assets under leadership, but a network of partner carriers who work regularly with brokers. Flexibility in the marketplace
- Asset Lite/Asset Heavy – Trucking Companies with Trucks, Trailers, Drivers, Dispatchers, who have a Brokerage Authority and are Bonded with the FMCSA. This provider will be able to keep up better with the ebbs and flows of business, as they can subcontract work as needed, while still remaining the single point of contact, regardless of what the side of the truck door says. Strength and Flexibility
- TMS- Transportation Management System- Software that both Asset Carriers and Brokers utilize to keep track of shipments.
- 3PL- Providers of outsourced services such as trucking, warehousing, distribution, and fulfillment.
- Capacity: How many empty and available trucks are available in a market within a given timeframe.
To better help you decide which Best Type of Carrier Provider for you and your company, consider the following:
What does your customer (internal or external) expect from YOU regarding transportation?
- Capacity? 10-15+ trucks per day, 40-50 Trucks per week.
- Cost Savings? Do you have time to put the work out for bid, and wait for cost-effective options?
- Communication? One point of contact for all your needs, do relationships matter?
- Last minute/same-day capacity? Do they answer the phone when you call and need them most, or only when they need you?
How much are you able to self-perform without the need of a 3rd party?
- Do you have time and resources to call 10 different asset-based trucking companies for every 1 truckload you need moved?
- Do you have a team of people who can schedule pick-up and delivery appointments for you?
- Are you familiar with standard shipping contracts, insurance requirements, and DOT regulations to know you are hiring a Safe, Qualified, and properly vetted trucking company to insulate yourself from possible legal troubles?
- Do you have a fleet of your own, and simply looking for someone to fill the gaps?
In short, how much time do you have to manage every truck coming in and out of your facilities? The more time you have, the less likely you are to require the needs of a Big Box Brokerage firm in glass towers on some downtown skyline, and more likely you need asset-based logistics providers, that have the flexibility of an in-house logistics team.
At Buchanan- We were raised from nearly 30 years of Asset-Based Trucking. Our in-house brokerage division resulted from quality customers, growing and challenging us to grow with them. As their needs increased- so did our offering. These two cornerstones of our business allow us the STRENGTH of an asset-based carrier, and the FLEXIBILITY of a 3PL.
The Buchanan Companies currently employ over 500 Employees in over 15 Cities across the country, operating in all-time zone in North America to make sure your calls are answered, your customers are satisfied, and your needs are exceeded.
