Having a strong, reliable carrier base can make or break a freight brokerage. So as freight agents, how do you develop one? One of our agents has a very interesting perspective that starts with his overall attitude about the business. According to our agent, freight brokers are unique to other salespeople in that we in effect must make two sales for every commission. This is because while the broker is actually the motor carrier’s customer, the relationship in practice (until it’s time to pay of course) feels like the other way around. As a brokerage, we actually treat our agents like they are customers, too, even though we are paying them a split. So our agent’s way of treating carriers embodies this attitude. It’s all about building a relationship in a way similar to the way you build shipper relationships.
After speaking with our agents and our agent manager Nancy, and from our own experiences being a carrier when we ran One Horn Trucking and dealing with carriers as a broker before we had agents, I would like to share the first four of what I have identified as eight keys to cultivating a strong carrier base:
- Get to Know the Right Carriers Well: Over the course of a year depending on your shipper base, you may use 50% of your carriers only once and 25% several times in a year. But it is the 25% of carriers you use much more regularly about which you need to learn as much as possible. By focusing on this 25% who pull consistently for you, you will improve your ability to service your shipper consistently. Where are they based, what kind of equipment do they have, what lanes do they prefer, do they have regular routes where you can be a consistent backhaul? Also get to know specific drivers. Oftentimes when it is a choice between you and another broker, if the driver likes working with you, he or she can influence the dispatcher. When you can provide consistent work, you can often negotiate a better rate as well as developing a loyal relationship.
- Use the Golden Rule: Treat your carriers the way you want others to treat you. This includes all of them you use, not just your most consistent 25%, because drivers talk to one another. Most importantly here: Answer their calls even when you know what they want, and you don’t want to talk about it. Also, always call them back even/especially when you did not get the load you had discussed, so they can move on. Don’t yell at them, even if they start yelling at you. Keep in mind the most important thing is making the delivery for your shipper, not winning an argument with a carrier and having them drop the load. Also, if the carrier encounters an agent who’s a screamer, they will think the whole brokerage is full of screamers. They will not want to haul for you, and you will tarnish your brokerage’s reputation, which will ultimately make it more difficult for everyone there to get good carriers. If you treat your carriers with respect, they will respect you.
- Pay Carriers Fairly: There is a delicate balance between getting the best value for your shippers and paying your carriers a fair rate. It is very important to achieve this balance so your shippers feel like you are not overcharging them and your carriers don’t feel like they are being cheated. By becoming very knowledgeable about what is a fair rate for a given load and tacking on a reasonable (not excessive) margin for your brokerage services, you can achieve a win-win-win for your shipper, your carrier, and yourself. When you underpay carriers, they drop you at the last minute for a better rate. Being paid well keeps carriers coming back.
- Pay Carriers On Time: Your carriers deserve to be paid on time. It’s as simple as that. They have pulled the load and delivered it using their drivers and equipment. They have incurred the cost of doing business, so they simply deserve to be paid the agreed rate in a timely manner. It’s not their problem if your shippers haven’t paid you. Just like it’s not your problem if your brokerage hasn’t been paid. That’s also why we pay our agents weekly before we are paid by their shippers. We encourage our carriers to fax or email their invoices and PODs, since we are internally paperless. It helps us process the “paperwork” more quickly and gets the timer started right away for payment. We also offer 3- and 15-day QuickPay options as well as fuel advances. Cash flow is king in every business, so keeping the cash flowing to the carrier is not only the right thing to do, but builds trust and loyalty. People want to work for people who pay them on time.
Since my research in this area uncovered eight really strong strategies, I have split this subject into two blogs, so stay tuned, in two weeks you will get to read the second half of my list. If you would like to subscribe to our blog, please click here.
– By Cheryl Biron, President