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

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       Preface

      Do you understand the concept of being a middleman in business? Two companies or parties need to work together, but it takes a third, independent party to bring everyone together, to make the introductions, and then ensure the business transactions that need to happen transpire smoothly.

      The role of a broker is to bring two separate parties together. In a social setting, a broker might serve as a matchmaker and introduce a single man to a single woman. When it comes to buying and selling real estate, for example, it’s a real estate broker who brings buyers and sellers together. A stockbroker, for example, brings investors and companies that are selling stock together.

      Meanwhile, it’s the job of a freight broker to bring shippers and carriers together. This may seem like a simple and straight forward endeavor, but there’s a lot of problem solving and logistical work that goes into becoming a successful freight broker.

      Of course, when your great aunt Agnes wants to introduce you to that “perfect” person, the only reward she’s hoping for is the satisfaction of being the catalyst behind a successful relationship—and perhaps some recognition at the wedding. But in business, brokers expect to be compensated for their matchmaking efforts, and justifiably so. Brokers perform an extremely valuable service, bringing together buyers and sellers who might not otherwise be able to find each other. Brokers assist in negotiating the terms of the transaction, and then often oversee the transaction from start to finish.

      Brokers in passenger transportation are typically known as travel agents. Their function is to identify and arrange the most appropriate travel methods for their clients, whether it’s booking a single, one-way seat on an airplane, or putting together an elaborate tour package that includes surface and air passage, hotels, meals, and recreation.

      On the freight side of the transportation industry, the primary role of a broker is to help companies that need to ship cargo find a trucking company that can deliver the shipment on time and in good condition, plus provide any extra services that may be required—all at a competitive price.

      As you’ll discover, becoming a successful freight broker will require you to seek out shippers and carriers, manage these relationships, continuously overcome challenges that arise, and work under tight deadlines. Your ability to multitask, as well as tap into your communication, time management, problem solving, and organizational skills will all come into play every day.

      Why can’t shippers simply find and hire their own carriers in order to transport their cargo? The simple answer is because it isn’t practical or realistic for them to become intimately familiar with the service and rate structures of hundreds of different motor freight companies.

      Even if they build in the cost of the broker’s commission—which the carrier, not the shipper, often pays—most shippers save time and money, plus receive better service by using a freight broker rather than shopping around for freight services on their own.

      From the carrier’s perspective, the broker brings in business that the carrier might not have been able to find on its own. Unlike an in-house salesperson, the broker is only paid when the carrier hauls a load. In today’s business world, carriers have come to respect, appreciate, and heavily rely on the role brokers play in keeping the transportation industry moving. What this potentially means for you is opportunity!

      tip

      Someone who owns and operates a freight brokerage business is considered a freight broker. Someone who has the training to be a freight broker but opts to work as an independent contractor for a freight brokerage business is called an agent.

      A freight broker must handle the day-to-day responsibilities of being a freight broker, and take on the management, licensing, insurance (bond), and financial responsibilities of operating their own business. An agent has the same job-related responsibilities, without the management, licensing, and financial responsibilities of owning the business.

      Of course, for freight brokers, there’s much more to the process than making an introduction and then quickly collecting a commission. Brokers work hard in a fast-paced, demanding environment. They thrive on stress, enjoy challenges, and have strong social skills (e.g., the ability to communicate with other people in person, by phone, in writing, and via email). If your ideal business includes a predictable routine and a limited amount of human contact, stop reading the book right now, because operating a freight brokerage business or working as an agent for an established freight broker, isn’t for you.

      However, if you want minute-by-minute change, unexpected crises, and daily opportunities to stretch your creativity and problem-solving abilities to the maximum, you’ll probably make a great freight broker or agent.

      This book will take you through the process of starting a freight brokerage business (or becoming an agent), beginning with a general overview of the freight industry and the role brokers play. It will explain basic requirements and start-up costs. You’ll learn about day-to-day operations when things are going well—and when they’re going wrong. You’ll also discover strategies for finding, hiring, and retaining good employees—as well as what to do when you lose them. You’ll gain a solid understanding of the sales and marketing process, as well as how to track and manage the financial side of your business. Throughout the book, you’ll hear from freight brokers and industry experts who have built successful companies and who are eager to share what they’ve learned from their own first-hand, real-world experience.

      By turning the page, you’re about to take the next step of your journey into learning more about one of the most fundamentally necessary businesses in today’s business world—the freight brokerage.

       CHAPTER

       1

       Introduction to the Freight Brokerage Business

      The transportation industry in general, СКАЧАТЬ