Building a lasting freight broker book of business is essential. The key is to build long-term relationships while executing short-term transactions.
So, what’s the best strategy for building a book of business as a freight broker? Like most all other business activities, there are many different strategies for building your book of business as a freight broker.
Here are three of the many strategies to consider when building a freight broker book of business.
For some freight brokers, it’s all about being the one-stop-shop solution for customers as their freight broker business model. The upside benefits can be enormous as you can become a true freight consultant that deeply understands your customer’s business. An example of a full-service brokerage is taking on new lanes over time. This will often include lanes in various regions, length of hauls, and sometimes trailer modes. As carrier networks are built to support these new lanes a deeper trust is formed that yields even more business from each customer adding to your freight broker book of business.
If you do this right it creates a true differentiation and competitive advantage that is difficult for your competitors to replicate.
The challenge of this strategy is that each of your customer’s freight needs might be widely different. This often happens when customers are spread across industries, regions and trailer modes. Learning and adapting to the intricacies of each one of your customers might take more time and resources than you have. It also leaves you at risk of losing a significant portion of your freight broker book of business if any single customer leaves.
Freight brokers can flip the switch on the full-service model by building a diverse base of shipper customers to add to the freight broker book of business. This strategy is characterized by spending the time and resources developing a core group of carriers that run specific lanes. Freight brokers can then target shippers running freight in these same lanes. An example would be building a carrier base that runs from the Midwest to south Texas. Instead of trying to bid on all the lanes in a shipper’s portfolio, you would only bid on the Midwest to south Texas lanes.
The upside to this strategy is that building up a carrier base can take less time than developing a full-service solution with a handful of core customers. It’s all about being the go-to freight broker who has the freight carriers to service a certain set of lanes.
The challenge is in the constant prospecting for new customers. It is essential to be able to find common characteristics in shippers running the same lanes to make it easier to prospect for new business. The volumes on a small number of lanes can be volatile, so it is essential to keep adding shippers to your freight broker book of business to smooth out freight market volatility and keep your carriers running.
Somewhere in the middle is building a freight broker book of business based on a deep knowledge of an industry. Picking this strategy allows freight brokers to build customer and carrier bases that are centered on product expertise. Industries like produce, steel, apparel, or construction have their own special requirements.
Freight brokers that dedicate themselves to a single industry become more efficient than most of their competition. This includes matching carriers with loads, handling special requirements, and providing solutions when things go wrong.
The trick is to find an industry that you already know or have an interest in and then immerse yourself in it. Learning the “ins and outs” of an industry does take time and experience, but freight brokers can compress the time needed by reading industry news and talking to leaders by networking.
FreightWaves SONAR provides the fastest freight market data in the world across all major modes of traffic. SONAR can guide those seeking to be a successful freight broker or can be used in executing these freight broker prospecting tips to build a stronger freight broker book of business. The SONAR platform is the only freight forecasting and analytics platform that offers real-time freight market intelligence-driven off actual freight contract tenders.
SONAR contains proprietary data that comes from actual load tenders, electronic logging devices and transportation management systems, along with dozens of third-party global freight and logistics-related index providers like TCA Benchmarking, Freightos, ACT, Drewry and DTN.
Whether you’re working from the office or from home, SONAR can provide you the data and intelligence you need to stay ahead of your competitors.
Find out more about FreightWaves SONAR for brokers.
You can find more information on freight brokerage and carrier sales tips on the popular FreightWaves sales show, Put That Coffee Down.