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Cost: The Broker Secret That is Undermining Freight Procurement

Cost: The Broker Secret That is Undermining Freight Procurement

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Shippers have become accustomed to having more questions than answers when it comes to working with their broker market. However, arguably no area of the broker market is more confusing or opaque than costs and pricing.

Rife with hidden fees and unclear metrics, the broker market makes it virtually impossible for shippers trying to find out what the true cost of a load is. This is obviously not only infuriating but results in significant supply chain waste that can add up quickly. 

The good news is, thanks to modern technology, shippers don’t need the broker market anymore. In fact, not only do they not need it anymore, but by going around the broker market and connecting directly with carriers via modern tools, shippers can save millions per year. Here are a few ways how.

Understanding True Market Cost to Haul Freight

It's no secret that the broker market takes advantage of both shippers and carriers by adding hefty, hidden margins. Cutting out the broker middleman removes excess cost, and results in a healthier bottom line at the end of the year. Plus, without hidden broker fees, shippers now obtain true freight market pricing, and actionable rate data to make stronger, informed freight procurement decisions. 

Bidding = Lower Costs

By going direct to carriers with modern tools, shippers get to configure max lane rates {the highest they are willing to pay to haul a load}, and then carriers bid and set market price {based on current supply & demand} instead of having to settle for the end cost given by a broker. 

On-Time Delivery

OTD is hugely important for both customer satisfaction and revenue. Falling outside of a given delivery window can result in shippers not only irking their customers but can also result in unplanned fines and fees. Modern technology empowers shippers to connect directly with asset-based carriers to mitigate the risk of late delivery because the procurement process starts with a truck in hand! Shippers also know who the carrier is, if the carrier is compliant and if the carrier has a strong customer service record -- which translates into much higher OTD rates and lower costs.


For more information on this topic, read "The 3 Secrets Freight Brokers Don't Want You to Know" published on DC Velocity (6/11/21).