Connecting shippers to carriers is not the sole purpose of any successful freight brokerage firm. This is a very nuanced and complex relationship that requires exceptional planning and analysis, as well as a level of customer service that will keep business relationships going strong for the long term. The following are 10 tips for building your freight brokerage company.
How to Build a Successful Freight Brokerage
1. File Your Paperwork
Registering with the Federal Motor Carrier Safety Administration (FMCSA) is absolutely required. On top of a filing fee, you’ll also need a surety bond or trust fund in order to prove that your new business is fiscally capable of paying its bills. Don’t forget to check your local government website to find out what kind of other permits and licenses you also need in order to conduct business in your area.
2. Get Your Financial Ducks in a Row
Yes, it looks like you’re already spending money before opening your doors. So your new freight brokerage firm will also need a line of credit from a bank in order to start operating and building a good reputation. Carriers and truckers work on narrow margins so require prompt payment. If you don’t pay, they don’t ship – it’s as simple as that. Thus, that line of credit will provide some wiggle room while you are waiting to be paid by the shipper. Like any loan, make sure to compare offers from a few different banks before signing.
An effective marketing campaign will build awareness of your company. There are a number of proven methods that range from taking out ads in newspapers to building an effective website. Some companies enjoy giveaways such as pens and other goods that help people remember you. Make sure to study what methods seem to work best in your region, either through research or practice, and stick with seems to work best for you.
4. Customer Relationships
Once you have developed relationships with both shippers and carriers, it is important to maintain these relationships. Yes, making sure that shipments are on time and successfully delivered is important, but that’s just expected. You will need to keep an eye on the quality of your customer service, periodically meet with your clients and partners, as well as keep communication lines open in order to keep everyone happy.
5. Diversify Your Clientele
Always aim to have several clients that utilize your resources instead of just one. This will ensure that you are not solely reliant on a single revenue source, which can be risky especially if they decide to break ties with your company. Having several revenue streams will allow you greater control over your business, as well as some flexibility if a client were to disappear.
6. Trim the Fat
You will quickly get a sense of which of your carriers perform well, and even out perform your expectations, as well as realize which ones simply don’t cut it. Don’t be afraid to sever ties with resources that continually cause delivery failures. They will drag down your reputation and business faster than any mistakes you might make.
7. Professional Networking
While marketing and advertising will connect you to clients, you will also need to build your reputation within your industry. See what kinds of awards that your business is eligible for, and coordinate a campaign to win them. These are a great reputation builder. And if you can give back to community, do so. Charity work is also invaluable for your brand image.
8. Future proof Your Operations
Devising a solid internal plan can help prepare for any sudden operational challenge that might arise. This will keep you from being left high and dry when you go through staff changes, leadership transfers, and other possible situations. Make sure to revisit this plan annually in order to keep it current.
9. Learn from Others
There’s no harm in looking at the competition, and learning from their successes and failures in order to grow your own business. The freight brokerage industry is filled with many well-established companies, so you have a lot of examples to look at in order to find success effortlessly, develop your own original ideas, and avoid repeating history in the wrong way.
10. Don’t Get Left Behind
Freight Brokerages have operated in the same way for years, but technology is quickly changing things. Keep on top of key issues such as supply chain management software, Big Data, cloud sharing, and communication streams. There are plenty of resources online where you can read about the latest news and trends, so make sure to stay active with your research and stay engaged with what’s happening in the industry.
Ready to Grow Your Freight Business?
If you’d like to learn more about the various opportunities in this industry, please feel free to contact us for more information. If you are looking to begin a career in logistics, please view our Careers page to view all available opportunities.