Riverside Logistics

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How to make sure your Freight Broker is “SECURE”!!!

What is a Freight Broker ?

They are someone who arranges transportation for another company (Shippers) using someone else’s transportation assets (Carriers). The Broker can be thought of as a “matchmaker” between Carriers with transportation assets and Shippers with freight. Typically, Shipper’s contract with Brokers to handle the shipment of all or a portion of their freight. Some Brokers act as a backstop for Shippers. When Shippers can’t get enough capacity from their regular carriers, they utilize Brokers for the excess moves. Brokers find carriers, arrange the details of the loads, pay the carriers, and invoice the Shippers. Although there is a lot more to it than just that, you probably get the idea. Brokers are middlemen. They don’t own anything, either freight or carrier assets, they just marry the two and charge a fee for doing so.

Why do Shippers use Brokers?

There are a couple of reasons:

The Brokers usually have access to a more extensive network of carriers than the Shipper. This network is a single point of access for multiple freight options and modes. It also allows the Broker to negotiate lower rates due to the overall volume of business they provide the carriers and shippers they do business with.

Brokers have technology, like a Transportation Management System, that allows them to save a lot of time (and trouble) in finding the right carrier, at the right time, with the right equipment, at the right price, and then executing the loads efficiently.

The Brokerage can improve your Supply Chain’s performance and avoid potential execution problems by utilizing their superior relationships and expertise in dealing with carriers’ operations.

Flexibility is another key advantage. They can help you expand as needed without tying up as much capital while minimizing your risk to changing market conditions. The depth of their bench can help you improve your supply chain and cost regardless of market conditions.

If utilizing a Broker makes sense for your company, how do you make sure that you get a good one and not a bad one?

Ensure they have the necessary licenses and accreditations. Brokers are licensed by the Federal Motor Carrier Safety Administration (FMCSA) and must carry a (minimum) freight broker bond. This stifles fraud in the trucking industry and guarantees carriers get their invoices paid. Also see if the Broker is a member of TIA (Transportation Intermediaries Association), which works to improve the industry and its education and standards. TIA tests and provides certification to Brokers. See if your prospective Broker is TIA certified.

Make sure they meet your communication needs. You want Brokers to be responsive at all times. They should provide regular updates on your shipments. Any issues should be made transparent and dealt with effectively.

The contracts and costs should be easy to understand. Services must be clearly defined. All add-ons associated with the load must be disclosed upfront. This includes fees such as fuel, detention, and demurrage.

Some “red flags” to watch for with Freight Brokers

Is the broker difficult to reach or unresponsive to your calls or emails? This may indicate that they’re unreliable and don’t have the capacity to take on new work.

Is the broker vague about their charges. If so, you may get hit with hidden costs on your invoice. Make sure you understand all the costs involved with moving your goods.

Does the broker work with only a few carriers. If so, you may not get good rates. The smaller the carrier pool, the less the competition.

Is the broker financially stable? Do they have adequate insurance coverage. If not, this could be a significant risk to your load. Check their  D-U-N-S Number. Also request to see a Certificate of Insurance (COI), which provides details about their insurance policy.

Make sure that the broker doesn’t have a “conditional safety rating”.  This would mean the broker/carrier, or their truck driver, has had multiple violations and is not following regulations. Make sure the broker complies with all relevant regulations and standards and that the carriers they use have an excellent safety rating before booking your shipment.

Here are the key traits to look for in your Freight Brokerage:

  • Trustworthy
  • Flexible
  • Customer-Oriented
  • Proactive

Here are some key questions to ask a prospective Broker:

  • How long have you been in business?
  • How do you source your carriers?
  • How does your carrier on-boarding work?
  • Once you find a good carrier, how do you keep them?
  • What is the average tenure of your team members?

Hopefully, you are now better prepared to successfully hire a Freight Broker if you need one. Good Brokers can be extremely helpful in managing your Supply Chain. Riverside Logistics Services has been helping Shippers manage their Supply Chains for over 25 years. We are a member of the TIA (Transportation Intermediaries Association) and actively participate to improve the quality of the Brokerage community.

We have a very thorough carrier on-boarding process and go to great lengths to make sure that our carrier community is extensive enough to meet all the needs of our clients. We welcome any opportunity to discuss your Supply Chain and can be reached at 804-474-7700 ext. Option 4.

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How would a strike at the West Coast ports impact us in 2022?

A potential strike at the West Coast ports  appeared imminent on July 1st but was averted,  for now.   The West Coast ILWU, International Longshore, and Warehouse Union had a contract up for renewal (July 1, 2022). They argued that since the Steamship lines have raised their rates significantly, and the port operators have made exceptional profits, that they should also share in the profits.  Not unreasonable.  Fortunately, as of this writing, it looks like an agreement was reached.

But what if the strike had happened? Below is a likely scenario….

First, the west coast would back up until long after the strike. Second, the east coast would get overloaded, very quickly, either due to sympathy work slowdowns or significantly increased workloads that exceed the east coasts port’s ability to unload and process containers. It would be a mess. As shippers re-route or diverted their shipments to the East Coast to compensate for the strike, the East Coast logistics networks would suffer. Instead of traffic coming from the west to east, those lanes would shut down. The capacity in the west would have less freight flowing back to the east coast so there would be a general lack of trucks to handle long haul freight, in either direction. The trucking network would be negatively impacted and take a long time to sort out. Intermodal movements would suffer as well. This would impact drayage carriers, produce container shortages and result in higher rates.

To summarize, everybody would suffer if the strike had happened, whether or not you ship internationally. The logistics network would be  out of balance, so costs would rise, service levels would drop, and every shipper would be miserable. Remember that it’s a network, with lots of moving pieces. When these pieces don’t move like they’ve been designed to, the network starts to fail. That failure is painful to everyone.

If the Federal Government had stepped in it would have tried to avert the strike. If that happened, then there would still be consequences. The West Coast ILWU could show their ire through work stoppages, slowdowns, sick calls, and any number of methods to slow the flow and impact as many people as possible to demonstrate their worth and power.

What should you do as a shipper to prepare? Here are 3 recommendations to try and protect your margins and maintain your logistics costs at a reasonable/workable level:

  1. Try partnering with a 3PL to lock in rates and services. 3PL’s have multiple contracts with carriers and these can help you manage your costs and protect your service. If you’re a medium to small sized shipper, this type of relationship can really help you.
  2. Pool your resources. Try to concentrate your business into larger pools of freight and sign annual contracts to lock in rates for at least a year. Don’t play the spot markets. You’ll lose in the long run.
  3. Have a plan. Determine what you will do if a strike happens, and you still have trouble shipping to customers. Be transparent with your customers. Make sure that they know what you’re experiencing, what you’re doing about it, and set reasonable expectations with those customers so they can plan accordingly. Make sure you re-visit your plan periodically and adjust it as the picture changes.

It’s not a good time right now for the logistics community. There are several potentially bad environmental factors hitting all at the same time. However, if you plan, partner with a 3PL (a good one) and pool your resources, you stand a much better chance of maintaining your relative competitive position in the marketplace.

Fortunately, a west coast port strike was averted.  But risks still exist in the supply chain.  The government can’t afford to let that happen, neither can the steamship lines or the port operators. A strike was either delayed or pushed off. However, can you afford to sit back and do nothing? It would be wise to discuss and plan for potential disruptions in your supply chain. Hopefully, you’ve weathered the Pandemic related supply chain woes and now this next potential disruption is no longer imminent. At the very least, if you are a small to mid-sized firm, try exploring the possibility of partnering with a 3PL to can help you navigate these tricky logistical waters. There isn’t any downside risk to looking into a 3PL partnership, and there’s a lot of help to be had by doing so.

Riverside Logistics would be happy to help you plan your logistics network, bulletproof your carrier base, and keep you competitive in the marketplace by providing cost effective solutions to your warehousing and transportation needs. After living through the pandemic and the effect it has had on your supply chain, you understand how fragile the network is and how impactful changes to it can be. Don’t be a victim of your supply chain without at least looking into a 3PL relationship. We are here to help and would be very willing to consult with you on potential opportunities to shore-up your network.

Riverside Logistics can be reached at 804-474-7000 Option 4. Ask for a LMC consultant and get started on being proactive towards your supply chain.

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If you spend over $100,000 on LTL Freight maybe Riverside Logistics can help.

Let’s see why or why not. Riverside Logistics a third-party logistics company (3PL) has considerable buying power in the freight markets for Less-Than-Truckload (LTL), Parcel and Truckload. We also have a significant presence in the Richmond, VA market handling local container drayage, warehouse and plant shuttles and short-haul dedicated moves. We have a strong local following of carriers. We also have a broad portfolio of LTL carriers that can be applied to any Origin/Destination set.

But we are not an omni-budsman (handle anything) Third Party Logistics Company (3pl). Although we’d like to think that we are very good at what we do, we are not one-size fits all 3PL. If you meet most or all of the following criteria, then you are a great candidate for a partnership with Riverside Logistics. If not, then maybe it’s better to just be friends and move on.

  1. If your company or your branch revenue is between $5 and $100 million in yearly sales.
  2. If you really don’t have a transportation department per se.
  3. If the decision-making is done locally not centrally when the company has more than one location.
  4. If you need both Richmond-based warehousing AND transportation management to go with it.
  5. If your freight spend for all modes of transport is between $150,000 and $3 million annually.
  6. If you use a consolidator like FedEx or UPS to handle all your LTL and parcel and (even) your FTL moves.
  7. If you have no technology platform to tender, route, cost, or track LTL or parcel shipments.
  8. If you can’t create a digital Bill of Landing (BOL) that ties orders to carriers and provides a full data set.

These criteria are benchmarks. We have found in the 25 years we’ve been in business, that companies who “fit” the above criteria do very well in partnership with us. Our overall book of business includes smaller and larger companies, so the above would not exclude you from being a candidate to work with Riverside. However, the above is definitely a “sweet spot” we found that works well. We do business with a lot of different clients with assorted wants and needs. There is no standard way of doing business, but rather key processes that work well across the demands for transportation and warehousing. We customize our solutions to meet the client’s needs and incorporate technological solutions to provide timely and effective answers for their daily transportation challenges.

How does technology fit into the equation? In the good old days manual routing guides were used by and for clients to handle their LTL and parcel shipments. Today Riverside has a robust technology platform that allows client’s to do their own routings. They can electronically tender, track and trace, cost, (and even pay invoices) using this system. It also allows for reporting and research of the data elements attached to each move over the life span of use. It’s a powerful tool that allows the data to be used timely and effectively on either a daily (short term) or long-term basis.

In today’s fast paced world having data is important; but having an experienced team to help you analyze, find efficiency’s and make decisions to add value is a strategic advantage. Supply chains have been disrupted and now more than ever the team of experienced people at Riverside Logistics may be able to help you navigate the faster pace of change.  If you would like to talk to one of our representatives please call us at …804-747-7700 Option 4 or fill out a quote form online.

 

 

 

 

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