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Do You Know The Difference Between A Freight Broker And A Carrier? What Advantages Does The Freight Broker Offer?

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The Difference Between a (3PL)   

Freight Broker and a Carrier

What is the difference between a Freight Broker and a Carrier, and what are the benefits of using a freight broker?  There is a difference between the broker and the carrier, and there are huge advantages of using a Freight Broker/ 3rd Party Logistics (3PL).  In the highly competitive field of transportation, we are all really on the same team but with different roles.  The freight broker needs drivers, trucks, and trailers.  The carrier needs for their drivers to continually move freight and revenue coming in.  This is where the carrier needs the freight broker.  We work together.

To have a good working relationship between the freight broker and the carrier, the carrier must be paid on time and at a reasonable rate.  It is also vital to have excellent communication between the two for a successful and pleasant experience for the shipper.  The shipper, being the company needing the commodity transported.

 

The 3rd Party Logistics Freight Broker-  A third-party logistics (3PL) freight broker provides the management flow for moving commodities from one location to another. They are a part of the logistics department, providing many types of supply chain services. They are the middleman bringing shippers and carriers together to keep the shippers’ freight moving and delivering successfully.  Commonly referred to as brokers, freight brokers, agents, transportation brokers, third party logistics, property brokers, etc.

The Motor Carrier is a company providing truck transportation.   There are two types of motor carriers.  There is a private motor carrier.  This is when a shipper provides truck transportation of their own cargo.   Then there is the “For Hire” carrier paid to provide transportation of others cargo and are liable for any loss or damaged freight.

 

The Advantages Of Using A 3rd Party Logistics Freight Broker:

1/ Freight Brokers are known for their expertise in transportation management and the connections needed to move cargo.

2/ The brokers’ logistics department assures that the driver/carrier is licensed and current through the (Federal Motor Carrier Safety Administration) FMCSA,  they research and confirm if the carrier’s insurance is up to date and carries enough cargo insurance to cover the cost of the commodity in case of theft or damage. The freight brokers’ logistics department obtains proof of carriers Compliance, Safety, Accountability (CSA) scores.

3/ The Brokers have advanced technology and staff to keep up with the everchanging needs of transportation for shipping.

4/ The brokers have access to many different modes of transportation to move freight along with a deep pool of carriers that have the trailers needed and run the specific lanes needed.

5/ They are known for their quick problem-solving skills.

6/ The broker can provide storage, inventory control, and various other aspects.

7/  The broker is known for their negotiation skills and management skills while due diligence is exercised.

8/  The broker is in communication with the driver and the shipper up until delivery.

9/  The freight brokers’ negotiation skills can save the shipper money and cut dramatic costs for limiting additional payroll and training. In turn, this frees up the shipper for upcoming projects requiring attention.

 

AMP Specialized Logistics, in partnership with Logistic Dynamics, has a team of experts that are consistent award winners for successful freight moves and Stellar performances.  Give us a call for your next transportation needs at 832-663-5227.   It’s your cargo and our reputation.  We are the professionals!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Questions Every Shipper Should Ask When Interviewing a Freight Broker/Agent

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Freight Brokers/ Agents also referred to as a 3PL (3rd Party Logistics), have become increasingly popular in the Transportation Industry.  Shippers can cut costs and increase profits by utilizing brokers in their supply chain for transportation of their commodities.  Major profits have been recouped by the shipper by reducing the in house department and reaching out for the expertise of the freight broker.   Shippers have left it up to the expertise of the freight broker for performing due diligence, negotiating, arranging the shipping and receiving, tracking their equipment via GPS as it steadily moves to its destination while keeping good communication with the shipper from the pickup to the delivery of their freight.   A good broker takes care of the project management end of transportation, allowing the shipper more time to complete upcoming assignments and such.  It’s a win, win situation for the Shipper and the Broker.  This is our specialty!  For me, it is my passion.

 

If you think that all carriers or/and owner-operators are licensed, bonded, and carry the cargo insurance needed to cover the cost of any damage done to your commodity, that would be incorrect. There are some excellent broker/agents out there and there are some “not so good” ones.  The good broker/agent will take over the strategic planning of verifying the authenticity and history of the carrier or driver that is going to carry your commodity.  However, not having any real background on your freight broker could make or break you!  It’s like messing with a deadly weapon!  Don’t be the one this happens to!

 

So, AMP Specialized Logistics (in partnership with Logistic Dynamics, Inc.) has compiled a brief list of important questions that shippers should check out when searching for a reliable broker for your project management while maximizing savings and minimizing risks.

 

#1Is your broker licensed through the Federal Motor Carrier Safety Administration (FMCSA)?

It is a federal law that anyone arranging transportation moves for compensation must have a federal property broker license and this must be issued by the FMCSA (http://Federal Motor Carrier Safety Administration). The FMCSA has strict policies for candidates providing proof of insurance and a bond. Once all requirements have been met, verified, and costs are paid the licensed broker is assigned a motor carrier number to be identified by and the FMCSA monitors and ensures compliance.  Ask for their motor carrier number/brokerage authority.  Don’t let anyone talk you into hauling your freight without the proper authority.   Logistic Dynamics, Inc. authority is on-line to download on their website.

 

#2.   Do they offer multiple modes of transport?  

Time is money and money is time.  Having multiple modes for transporting your commodities allows more flexibility.  If it cannot be shipped by one mode, your broker and their team can quickly find another means of transporting your freight.  Having too many brokers in the mix for transporting causes all sorts of issues that Material Planners do not have time for. Using just a few brokers with multiple modes of transportation in the mix allows for an easier flow.  The customer service level should provide you with good relations between the broker, shipper, and receiver.  Faster shipping and receiving provides you with a harmonious management flow and allows you to continue with other projects needing your attention.

 

#3.   What is the process used for qualifying a driver to transport your freight to its destination?  

AMP Specialized Logistics and Logistic Dynamics are fortunate to have a large carrier base throughout the United States.   The drivers that we use for each load are all safety approved, properly insured and their CSA Scores are checked.  Each carrier/owner-operator has been verified by Logistic Dynamics Carrier Development Team.                                                                                                        The broker/ agent develops a good business relationship with their drivers and is aware of the ones that prefer to move freight only interstate, the ones that prefer only intrastate, and the ones that prefer to stay in certain lanes, along with the type of trailers that they have.

 

#4.  Are They Recognized Throughout the Industry?

Logistic Dynamics is a First Advantage Gold Book Broker (very few brokers qualify for Gold Book status due to the strict requirements) and a member of the Transportation Intermediaries Association(TIA).  TIA is an organization for 3PLS (third-party logistics).  This organization sets high standards that their members must attain.  There is the Better Business Bureau (BBB).  There is a handful of organizations out there to prove high standards of credibility.  I also still believe in the power of “Word of Mouth”, how long they have been on social media, and what type of content they have with their audiences, are the award winners, for example:  AMP Specialized Logistics, through Logistic Dynamics, have consistently been awarded the Bronze Buffalo and Stellar Performance Awards. There are many ways to find out their credibility.  So, ask the questions and make sure that you are satisfied with your findings.

 

#5 Who is Responsible for any Damages/ Claims?

At one time or another, a shipper will experience a claim for damaged or lost freight.  When using freight brokers/agents, who are responsible for the claim costs?  This is important to discuss and establish before a claim happens.  First, your broker must know the value of the commodity they are hauling.  Most of the drivers or/and carriers can get their insurance companies to temporarily raise their cargo insurance to cover the cost of the commodity from pick up to delivery.  This must be validated in case of any mishaps.     Each driver we use is safety approved with confirmation that there is enough coverage to cover the cost of the equipment hauled.  Logistic Dynamics also carriers blanket insurance to help cover any costs in case the driver/carrier does not pay.  You can be assured that Logistic Dynamics will step in as the middleman throughout the whole process until it is finished by their senior claims’ leader and will use our own legal and litigation resources if needed.

 

When you find that right freight broker and you both have that good, trust-building communication,  the shipper can turn to other responsibilities.  By using a quality freight broker you have your shipping department at your fingertips, inventory specialists tracking each load, and so much more allowing you the time to do what you do best.

 

Thank you for reading our article,

Robin Merritt-Bratton

AMP Specialized Logistics, LLC. in partnership with Logistic Dynamics, Inc.