Shippers across the globe depend on the expertise of freight brokers to help them find, schedule, and manage their full truckload shipping needs. A freight broker is either an individual or a company that manages the complete scheduling of supply chain movements. Some brokers specialize in less than truckload or LTL, while others are experts in all freight modes. Nevertheless, there may come a time when you need to upgrade your existing broker. This could be due to the fact that your business is growing and needs a broker who can handle the high demand. However, this can sometimes be a bit of a challenge - especially if you're looking for an FTL broker.
The FTL industry is one of the more complex to understand. This is partly due to changes in federal regulations, including ELd Mandates, which restricts how many hours per day a carrier can drive. An experienced FTL freight broker understands how to bob and weave through these changes, though, always finding the best deals and partnerships for their customers.
While the summer temperatures heat up, so does fiscal planning for the year. If you are reviewing your invoices for full truckload shipping and would like to find a freight broker that delivers better results, In this blog post, we'll explore the differences between FTL freight brokers and 3PLs, and what criteria to consider when selecting the right partner for your shipping needs.
What is the Difference Between an FTL Freight Broker and a 3PL?
A freight broker is an individual or a company that is responsible for scheduling shipments on behalf of their clients. It's a rather simple task, as they simply contact companies or carriers within their network. From this pool of carriers, they try to find the best deal to move freight from one point to the other.
However, many growing shipping companies, retailers, and manufacturers tend to defer to the experience of a third-party logistics company, instead.
Freight brokers handle basic freight management tasks like scheduling movements. This type of service is useful for shippers who do not have a regular shipping schedule.
A 3PL, on the other hand, manages the entire shipping process for their clients. Based on the 3PL bandwidth and service offerings, they can handle inventory storage and warehousing, shipping and receiving, freight bill auditing, and of course, the scheduling of all freight movement – from FTL to LTL or overnight parcel services.
A professional 3rd party logistics company can serve as an FTL broker if that's all you need.
Building a relationship with this type of larger service provider allows you to seamlessly expand their role in your full truckload brokerage services. When your volume increases, they can likewise expedite their services to match. As business slows down, they can streamline service offerings as well.
Whether you decide to work with a straight FTL freight broker or a 3PL that offers these services, there are two important criteria that you should consider before signing on the dotted line.
Are They Diverse?
Diversity in shipping goes much further than simply offering multiple services.
While the full truckload industry is rather specific in nature, trends in other transportation modes tend to impact the FTL industry, as well. When a freight broker works with international shipping, cross border shipping, less than truckload, intermodal or multimodal transportation, and express delivery services, they'll have the knowledge base to stay ahead of changes that will occur.
The approved United States - Canada - Mexico trade agreement had one of the biggest impacts.
While this has been agreed to in principle, it has yet to be ratified by all 3 countries. When this occurs, the FTL industry will experience the most changes in procedures and policies. Hiring an FTL freight broker that is ahead of the curve, and understands the rules and regulations that are pending, will allow your company to ship FTL with ease and without delay.
Do They Have Strong FTL Carrier Relationships?
Another thing to consider is whether they have strong relationships with FTL carriers.
While the average FTL-only freight broker specializes in this one specific industry, a large scale 3PL company typically has stronger relationships. Because of this, they can negotiate better shipping rates for their clients.
The main reason for this is the principle that higher shipping volume leads to better negotiating power.
A Modern 4PL provider like Redwood has clients across the globe. They can take care of each of these valuable customers on a personal and customized basis. Because of the volume they ship every day, their negotiation or buying power skills specifically with FTL carriers is much greater than a small volume freight broker.
The key to navigating FTL shipping is working with a reputable freight broker or 3PL. Which one you decide to go with is really dependent upon what you need to achieve. Either way, though, if they do not have a strong relationship with their carriers, they are not able to benefit you much more than what you can achieve on your own.
Final Thoughts
Upgrading to a new FTL freight broker can be challenging.
However, doing a bit of research beforehand will go a long way in helping you find the right partner. Most importantly, you need to make sure that they are diverse and have solid relationships with their carriers. If you find one that does, don't let them pass you by!
If you have questions about FTL freight broker services or would like to expand your FTL service offerings with Redwood's Modern 4PL approach, reach out to us today.