Freight Brokerage Business. The Staff of Entrepreneur Media, Inc.

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       CHAPTER

      10

       Tales from the Trenches

      By now, you should know how to get started and have a good idea of what to do—and not do—in your own freight brokerage. But nothing teaches as well as the voice of experience. This chapter features quotes from established freight brokers discussing what has contributed to their success and what they think causes companies to fail.

Use Advertising and Marketing Techniques that Work

      Track your marketing efforts so you can concentrate on the techniques that work and eliminate the ones that don’t.

      Smyrna, Tennessee freight broker Cathy Davis said small giveaway items, such as pens, notepads, caps, and T-shirts, work well. Company newsletters (or a blog) with personal and industry information also get a good response. She said donations to fundraising events may be helpful (depending on the event and the degree to which it’s promoted), but the impact of website sponsorships is questionable. She recommended developing a three-panel printed brochure that is easy to include with letters, invoices, and checks.

      Chuck Andrews, an Indianapolis freight broker, builds name recognition by placing periodic ads in association newsletters, as well as in annual association and industry directories.

Prepare for the Future

      It’s understandable that at this point your primary focus is getting started, but you also need to think about the future. Develop a succession plan that is reviewed and revised annually. Know how leadership will be transferred when it becomes necessary—either through voluntary or involuntary departures.

Don’t Reinvent the Wheel

      Look around for good ideas and good products that people are already using that you can incorporate into your operation. Everything you do doesn’t have to be original; get ideas from other brokers, carriers, shippers, and even totally unrelated businesses.

      Bloomingdale, Illinois freight broker Ron Williamson learned this the hard way when he hired someone to develop a proprietary computer system. “That was a mistake because it was not a totally integrated system that would save us time and make us more efficient,” he recalled. “Later on, we found a packaged program that had all the bells and whistles we needed.”

Get Rid of Carriers That Don’t Perform

      Every trucking company will have an occasional service problem, but when the service failures become chronic, drop the carrier from your roster. “You won’t keep your customers very long if you’re having constant problems with your carriers,” said Williamson. Of course, he acknowledged that in the beginning, you probably won’t know who all the good and bad carriers are. While it’s one thing to be understanding and give a carrier a second chance, you need to draw the line before the problems affect your own business.

Maintain a Broad and Diverse Customer Base

      You need enough customers so that losing one—or even several—is not devastating. One of the biggest mistakes Cathy Davis ever made when she ran her freight brokerage was allowing one customer to control too much of her company’s revenue. When that customer pulled away with very little notice, she was left scrambling to replace that business.

Get in the Spotlight

      Because the freight industry is such a strongly relationship- and reputation-based business, it helps to put yourself in the public eye in a positive way as often as you can. Cathy Davis saw a favorable impact on her business from being the recipient of awards and by getting bylined articles published in trade publications. An even easier approach is to contribute content to online publications or well-trafficked blogs that cater to your industry or the shippers you are targeting as your perspective clients.

Be Open to Evolution

      Though a freight brokerage is extremely lucrative on its own, it’s also a business that can lead to the development of other transportation-related operations, from consulting to buying trucks and being a carrier. Cherry Hill, New Jersey, freight broker Bill Tucker, for example, offers a wide range of logistics services.

      Andrews started as a broker, and then created his own separate trucking company to handle moves where the carriers he was using were short on equipment. Williamson also started as a broker and has since created two trucking operations.

Protect Your Reputation

      “Focus on building the highest-quality reputation you possibly can,” advised Tucker. “When a shortcut presents itself, but it’s a little on the shady side, have the fortitude to pass it by, no matter how big the opportunity may seem. There are so many people in this industry who need good, solid, honest, reputable service—and long term, that’s where the big money is. You survive, and you won’t have a lot of doors closing to you because some bad story got out.”

      Tucker compares the industry to a small village. “Everybody knows everybody else’s business. It’s amazing how fast word travels. Nothing will put you out of business or limit your success faster than the story of one bad transaction or one nasty court loss because of bad practices getting out into the marketplace. You’re going to have to sweat for a while, pull your belt in once in a while, and [endure] some tough times. But do it the right way every time, don’t take any shortcuts, provide high-quality service, and maintain your integrity, and you’ll always have customers willing to pay a fair price and good carriers that want to work with you.”

An Industry Veteran Puts the Pieces Together

      This book has provided a lot of information, originating from a wide range of credible sources, to help you develop a realistic understanding of what it takes to be successful operating a freight brokerage business.

      Angela Eliacostas is the president and founder of Illinois’ AGT Global СКАЧАТЬ