Freight is manufactured either in the USA or
overseas. It is then shipped in to the USA (or is already here) and
needs to be delivered. At the ports or loading dock of a factory, it
is loaded on to a piece of equipment. This again could be a semi,
rail car, or boat. All of this freight is handled through 2 or more
parties. When this load of freight is manufactured it is destined
for a certain customer. This could be a line of clothes heading to a
retailer or a load of refrigerated food headed for a cold storage
warehouse. Either way, there is always a shipper and a receiver or
consignee. Now, sometimes, the freight will go through a third party
being a freight forwarder or freight broker.
A
freight broker will act as a middle man that will handle the booking
of the trucking company or other mode of transport for the shipper.
The broker will approach a shipper asking to help handle their
freight. This takes some of the workload off of a manufacturers
shipping department. The shipper and broker will negotiate a rate
for each load, and the broker in turn hires a trucking company at a
lower rate to deliver the shipment.
A
freight forwarder is a similar agent but handles more international
shipments. They will handle freight such as, container ship freight,
boats going overseas, and the likes. An example of this would be a
yacht broker selling a boat to someone overseas. The yacht broker
will contact a freight forwarder to quote a rate to ship the boat
overseas.
There are also 3PL companies. They handle all aspects of
transportation. They will handle everything a broker and freight
forwarder will, and more. Warehousing, intermodal, rail, container,
cold storage, and air freight are all aspects a 3PL will handle.
They are usually very large companies with many divisions.< /FONT> <
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In some circumstances a broker and freight forwarder will
work together. A broker can handle a load that needs to go overseas
and will seek the service of a freight forwarder. Now, the same
cannot be said for a broker working with a broker. That is called
double brokering. It is frowned upon in the industry, but it still
happens. Double brokering can cause serious liability issues that
are not needed with the liability already on the shoulders of a
broker.
Trucking companies are not likely to befriend a broker for
the simple reason they feel a broker takes money out of their
pocket. In a sense, they do. Though most trucking companies dislike
brokers, they need them. Brokers manage such a large portion of the
freight that it is necessary for a broker to be used on occasion.
Trucking companies have dispatchers and load planners that are
responsible for booking freight for the trucks. They will usually
call on their own customers first, and use brokered freight as a
last resort. From my experience, trucking companies that haul too
much brokered freight are already in or going to be in financial
trouble. A trucking company needs to have a strong book of business
of their own. I find that smaller trucking companies tend to ignore
the sales side and rely on brokers. This can quickly spell trouble.
If I could recommend one thing to any trucking company it would be
to employ a good sales agent!
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As for brokers, you have your large corporations that own
such a large portion of freight that they can bid low on rates to
gain more freight. And since they own such a large portion of the
market, they can accept lower rates from customers and in turn be
confident that they can sell it to a trucking company. The trucking
companies have to take this cheap freight on occasion because that
brokerage handles so much freight. These brokerages are usually
disliked in the industry. They are considered to rip off trucking
companies because of their stance in the market and their market
share. When I brokered, I decided to make less on a load and make a
trucking company happy. This would lead to better broker-carrier
relationships. You would be surprised how often you need them to
help you out of a tight spot as a broker.