For companies shipping raw materials or completed goods, choosing the right shipping company for their freight is integral to their success. Options include dealing directly with a carrier or enlisting the help of a freight broker. The decision to establish a relationship with a freight broker vs. a carrier depends on several factors.
What Is a Freight Carrier?
A freight carrier is a company that works directly with a shipper to transport their goods. They take possession of the goods and are responsible for the safe delivery of the goods to their destination.
Advantages to Working with a Freight Carrier
Identifying a great LTL or FTL carrier you can trust reduces the headache of having to search for a carrier for every one of your shipments. Carriers that have experience moving your type of freight, have a fleet of trucks that serve your region, and offer nationwide service or even next day delivery, are worth establishing a relationship with.
Working with a carrier provides a single point of contact for your shipments and the reliability that comes through building a strong relationship over time.
LTL Carriers vs. Freight Brokers
When shipping freight that does not require an entire truck, your carrier will seek to combine cargo from another shipper on that same truck, going to the same destination. LTL shipping relies on a hub-and-spoke network with many access points, loading and unloading zones, and connecting trucks.
LTL can increase the amount of handling your shipment will experience as well as transit time. For shippers that are not as time sensitive, LTL freight potentially offers a cost saving over hiring an entire truck to deliver less than a truckload.
By opting for a freight broker to handle your partial shipment, you avoid the hassle of locating a carrier and negotiating a route and transit time. For carriers that also act as brokers, shippers take advantage of a single point of contact that has access to an extended network of carriers they trust offering speed of delivery and cost cutting.
FTL Carriers vs. Freight Brokers
FTL freight reserves an entire truck dedicated to one company’s shipment. This means, that from origin to the intended location, the only products or goods that will travel on that truck are owned by one company. One of the great benefits of FTL shipping is that travel is directly from the origin to destination minimizing transit time.
Brokers work with FTL carriers on behalf of shippers and the carriers themselves. For shippers, the advantages to working with a broker are the same as listed above – ease of matching a shipment with a truck and allowing a broker to handle all of the negotiations and freight tracking.
For FTL carriers that have empty trucks, either sitting idle at their depot or seeking a return shipment after outbound delivery, brokers provide access to freight that keeps trucks on the road.
Who Ships Faster – Carrier or Freight Broker?
For shippers that require speed, working directly with a carrier or a broker could do the trick. Carriers, especially for FTL shipments, offer speed and reliability, assuming a truck is ready when you need it.
If a carrier does not have a truck available when you need it, leveraging the services of a broker with access to a nationwide network of carriers can help get your freight picked up and delivered sooner.
Some shipments require specialized assistance such as lift gates or cross docking. If you carrier of choice does not offer those services, a freight broker can find the right carrier in their network that can.
Why Choose a Carrier vs. a Freight Broker?
Consistency. Carriers offer the assurance of one company handling all your freight from start to finish.
Speed. Contracting with one carrier can speed up your shipments and, depending on the carrier, offer next-day deliveries.
Cost predictability. Rates will not fluctuate as much as they might with a broker and, if your company has a consistent volume and timing of freight to be shipped with common routes, a single carrier makes direct negotiating and communication possible.
Safety. Working with one carrier, especially for FTL shipping, reduces the risk of your shipment becoming damaged during transportation because there are no truck changes.
When to Choose a Freight Broker vs. a Carrier?
Seasonality. A company that works with one carrier but experiences a large influx of freight all at once might need additional freight resources to fulfill their deliveries.
Scalability. A company that does not yet have a consistent volume of freight to ship can benefit from leveraging a single point of contact who can negotiate and manage each shipment for them, saving them administrative time in the process.
Cost savings. A partial shipment may not be time sensitive and the potential cost savings of brokering may be attractive to the shipper.
Specialized services. For specialized freight or shipping services, freight brokers can access their network to fulfill those one-off needs.
What Is a Freight Broker?
A freight broker is an intermediary between a freight shipper and the actual carrier. Freight brokers do not take possession of the freight and, instead, match shippers and their freight to available carriers.
Brokers work with an established network of regional and national carriers that are proven and trusted to pick up and deliver freight safely and on time. This access to a network of carriers gives shippers full flexibility when moving freight from point A to point B.
Advantages to Working with a Freight Broker
Working with a broker saves the shipper a significant amount of headache. Brokers eliminate the need for the shipper to locate a carrier, negotiate rates, schedule pickup and delivery times, and track the freight while in transit.
Additionally, acting as a single point of contact, brokers maintain all communication between shipper and carrier at point of pickup, while freight is in transit, and when it arrives at its destination.
Reduced Costs Using Freight Brokerage
Brokers are freight experts with buying power. They offer the potential to reduce shipping costs by combining freight volume with the other shippers and the carriers that they work with. These volume discounts are passed on to their customers – one of the most popular reasons shippers hire freight brokers vs. carriers.
Freight brokers also offer cost savings by reducing the need for their customers to hire their own in-house shipping experts. Brokers can be leveraged as needed, keeping costs in check.
Freight Brokers Increase Shipper Capacity
Carrier capacity is based on its fleet size and availability. For shippers that are rapidly growing or are impacted by seasonality, leveraging a freight broker is a great way to ensure that their cargo continues to be moved without delay regardless of individual carrier capacity.
Freight Brokers Save Time for Shippers
The world of logistics revolves around freight, capacity, and time. Freight that isn’t delivered on time can result in serious consequences for your entire supply chain. Freight brokers work with carriers who have capacity, eliminating these costly delays.
Freight Brokers Support Carriers
Brokers are an integral component of the freight ecosystem. Not just supporting shippers who have cargo to move, freight brokers also support carriers who are seeking cargo to fill open or partially open trailers.
By working with freight brokerages, carriers have more reliable access to freight for their trucks, thus boosting their own earning potential.
Freight Brokers Improve Carrier Logistics
Freight brokers are also logistics experts. With their access to a network of trusted carriers, they increase the overall supply chain efficiency by improving delivery times, lessening freight damage risk, and even reducing shipping costs.
Because brokers help fill trucks, carriers can optimize their routes, minimizing deadhead miles.
What Makes for a Great Freight Brokerage?
Experience is the first key to identifying a great freight brokerage you can rely on. If they have been in business for years, have a strong internet presence and reviews, and a strong network of carriers that they work with, you may have found the right broker for your business.
Specialization is important too. Look for brokers that are experienced with your type of freight whether it is pharmaceuticals, raw materials, dry goods, non-perishable foods, or glass products.
Specialization means they’re familiar with your business and have access to the right carriers that are reliable and can save you time and money.
How is a Carrier Different than a Freight Broker?
Freight carriers are logistics companies that transport your product from origination to its intended destination. Shippers who bypass freight brokers deal with carriers directly.
Freight Carriers are commonly categorized as FTL (Full truck Load) or LTL (Less Than Truckload.) This difference becomes important for both shipper and carrier as FTL provides a lower cost for shipping freight and quicker delivery without additional stops in between to pick up more freight.
Building a Relationship with Your Carrier or Freight Broker
Shippers are encouraged to build relationships with their carrier or brokerage of choice. Carriers will develop an understanding of the shipper’s individual needs while freight brokers provide access to a larger network of carriers that can offer speed and cost savings. Freight brokers also pinch hit for shippers when their main carrier is unavailable or has limited capacity.
For companies relying on a freight broker, having that single point of communication replaces the need for an in-house hire. The broker can act as a “personal carrier shopper” for their goods.
The most advantageous scenario is working with a carrier that also offers freight broker services. The combined value of a provider who knows your business through a direct carrier relationship that can also act as a broker, when needed, provides added reassurance to shippers.