Working and Negotiating with a Freight Broker
Many proprietors of trucking companies work with freight brokers as a clearinghouse between companies that need goods shipped and the trucking industry.
Why work with a freight broker in the first place?
The short answer is time and money. Not every business has time or staff available to shop for and establish relationships with vendors in the trucking business. And by working with a freight broker and their brokerage, your business can get a sort of “group rate” because of the massive volume of shipments brokered, on occasions, obtaining as much as 80% off typical rates.
An experienced freight broker, with their expert knowledge of the trucking industry channels, is likely to know more than a given manufacturer or distributor about how best to move their product from source to destination, in the most efficient, cost-effective way. It’s one of those mechanisms that many businesses outsource to a professional specialist to get it done the right way and get back to focusing on their true competitive advantage and core skills.
How to use a freight broker
A freight broker and their brokerage arrange for the load board shipment of freight and negotiates the rates and terms. They do not handle or manage the actual process of shipment themselves.
You can use a freight broker for advice about your best options for shipping cargo and learn how to save money on your shipment. Freight brokers are aware of all the details that you need to know in order to make the best decision. They are not consultants. They are operations specialists.
Using a freight broker, you have access to their network and relationship with trucking companies, so they can help you find the best carrier for your specific shipment needs.
They can pull from a variety of different services, capabilities, and equipment, and offer a discounted rate because they buy shipment for companies all the time. That’s their job, so they know how to get the best rates.
When in negotiations, a few time-test best practices will always serve a business well:
1. It’s not just about the price. It’s about value.
The rate of negotiation isn’t the only factor involved. It’s on one side of the equation. The other side is the service being provided and the quality of the service matters. Overall, it’s also about what can be done, and why and why not.
Finding creative solutions and discovering synergies with the carrier’s operations is good negotiating and good business, and it makes the world a better place.
2. Always be closing
In negotiations keep the end in mind and remember that it’s called negotiations for a reason. When driving toward closure in a freight shipment negotiation, don’t make a concession without getting something back in return.
And don’t ask for a concession without having a good reason for it and some way you can offer something in return and allow the other party to come to an agreement while saving face. Don’t be afraid to have more than one option and to build urgency.
For instance know your options so you aren’t just bluffing when you build urgency, but have real, solid reasons why you should go ahead and do business and make a deal now rather than let the business slip away to a competitor.
3. Be professional
Enter into every negotiation with a confident, cool, and courteous attitude. Have a win-win mindset and an end goal of putting together something that’s great for everyone. Build trust and be incredibly positive. Treat vendors and brokers with dignity and respect. Overall be professional as possible.