Truckload freight broker tips: Identifying bad customers

Kevin HillFreight Market Blog

truckload freight broker

Thanks to Redwood Logistics for allowing Jim Allen to take the photo above.

For truckload freight brokers, building a broker book of business is a grind. Customers come and customers go. It is important to build strong relationships with the customers that will become profitable partners in your business. 

There is another set of customers that aren’t profitable and need to be avoided. It’s often difficult to spot these shippers at the beginning of the sales cycle. One of the main themes to identify, however, is if a new shipper is framing its negotiations in terms of “heads I win, tails you lose.” 

3 truckload freight broker tips to identify bad customers

Slow pay or no pay  

There’s nothing worse than customers that don’t pay their bills. The second worst type of customer are those that never pay on time. Slow pay or no pay customers are always a red flag. This pushes all the financial risk to your freight brokerage business as your customer receives the financial rewards of holding cash as long as possible. 

Shippers that refuse to pay invoices on time treat your company as a bank – floating them loans at an interest-free rate. Tack on the time and resources it takes to your accounts receivables department to collect and your finance department to manage cash flow and your 10% gross margin shrinks down to little or nothing. 

What accessorials? 

Other ways bad customers push risks onto their truckload freight brokers include: 

  • We ordered a truck and canceled the load? Too bad. 
  • We took eight hours to load the truck? Too bad. It’s the cost of doing business with us. 
  • Our customers rejected our defective products? Too bad. Don’t even think about bringing it back to us. 

Shippers that refuse to pay accessorials are usually the ones with the most problems. They don’t have their act together, or worse yet, getting their act together would cost so much they would become unprofitable. It’s a no-win situation for your business, however. You will burn freight carrier relationships if you give in. If you stand your ground, your shipper will likely walk away. In this instance you should say good riddance, don’t let the door hit you on your way out. 

These customers are not only digging into your pocket on every load, they are wasting your most valuable resource, which is time. Almost as bad, they threaten your relationships with your carrier network. 

Adding you to my load list

This is the kiss of death as a truckload freight broker. Nothing screams “cheap customers” more than, “I’ll add you to my load list.” Sure, some freight brokers make a living off replying back to these daily emails by being the fastest and cheapest clown. By doing this though, you will never grow your book of business enough to achieve the goal of financial freedom. This is cheap freight, make no mistake about it. 

Shippers that use load lists to move their freight are more often than not the same ones that don’t pay on time and always balk when it comes to paying accessorials. You’ll only spin your wheels and waste your time chasing these loads. Neither your customers or the carriers you need to earn the slimmest of margins will ever show you any loyalty. More importantly, you’ll never be able to scale a successful process up enough to make more than a minimum wage truckload freight broker. 

Patience is the key when it comes to building your book of business. Remember the old saying, “good things come to those who wait.” Better yet, “good things come to those who wait while hustling.” 

How SONAR aids those seeking to grow a truckload freight broker book of business

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 truckload freight broker or can be used in executing these freight broker prospecting tips to build a stronger 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