Freight Broker Software Blog

In July, this blog ran an article loaded with tips for a budding freight brokerage company to get up and going. We discussed ways to build both a strong carrier base and a strong customer base. Now it’s time to discuss how to keep your company making money for you, your employees and for the carriers that work with you; and to offer competitive pricing to the customers who give you freight.

Even with a strong carrier base and a strong customer base, if you or your employees are hard to get along with these carriers and customers aren’t going to be willing to continue to do business with you. Your strong carrier or customer base will weaken and eventually collapse.

Hiring employees that will work for your business instead of working over your business is the first key. If you could hire someone with great people skills and freight brokerage experience, you would have the ideal situation. So how do you find these people?

Some people think that "retired" truck drivers make great brokers since they know the trucking industry so well. And granted, I know a number of brokers that came from the ranks of drivers who are exceptional brokers. But generally, a driver is always going to think like a driver and that’s not in the best interest of a brokerage company.

Some people think that stealing brokers away from the competition is the best way to get good employees. But, in my mind, I have to ask if he left the other guy, how long will he stay here before he moves on to the next company – and takes the freight we have built up with him?

When hiring employees, don't be afraid to ask the tough questions. Ask why they want to come to work for you. Ask what they are willing to do to be successful at your company. Ask whether the money or the customer is the most important thing in a business transaction. Ask if they are dedicated to building relationships with fellow employees, customers, and carriers that will foster continued company growth. Ask all of the questions that will help you assess the prospective employee’s character and work ethic.

Treat your employees with the respect you would like them to show you and your customers and carriers. Whether you pay your brokers a salary, by the hour or by commission, be generous but not to the extreme. Offer benefits you can afford and are appealing to your employees. Discounted health or dental insurance, and 401k matching options are good examples. An auto-renewing subscription to Field and Stream magazine may be your heart's greatest desire, but not necessarily theirs.

Provide your employees with the tools that will help them do their jobs efficiently and correctly. One of those tools is the correct software. Freight Brokerage Software from TruckMaster Logistics Systems, Inc. is the perfect solution to all of your freight brokerage needs. Our Freight brokerage software is easy to use and, at the same time, completely handles all of the tasks required to run an efficient and profitable freight brokerage company. To find out how we can help you be more profitable and more efficient, and have a greater presence in the marketplace, call us at 888-891-9550 or visit TruckMaster on the web. We look forward to showing you how you can be successful too.

Dale Clark
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

Diesel and other fuel prices have risen considerably, but freight rates have remained the same. How does an owner operator, independent, or any carrier manage? The answer... a fuel surcharge.

What is a fuel surcharge and how should it be calculated?

It is an accepted practice for trucking companies to charge customers an extra fee that fluctuates with the cost of fuel. Fuel surcharges are calculated as a percentage of the base rate and are added to a shipper’s freight bill to cover the carrier’s added cost of operations. The surcharge is linked to a government-reported, average fuel price and is "indexed" for the carrier, based on an individual company or industry wide ratio of fuel cost to revenue. Surcharges are often defined as charges above normal rates. A fuel surcharge has traditionally been sold as a charge that covers actual additional fuel costs above the benchmark cost included in the freight rate.

Here is a way to calculate your own fuel surcharge.

The average price, minus the Benchmark price, divided by the miles per gallon, gives the surcharge rate, and multiplied times the miles driven gives the fuel surcharge amount you should recover.

A fuel surcharge should be based on the average retail price of diesel fuel in the region of origination, or where you pick up your load, on the date you pick up, or the date of invoice on this load. This average retail price information, collected by the federal government's Energy Information Administration, is updated every Tuesday. The information is available by phone by calling (202) 586-6966 or you can visit their Web site.

Does a shipper have to pay fuel surcharge?

Past ICC regulations allowed shippers to be charged a surcharge when diesel fuel costs exceeded a certain level. That sunsetted with that agency’s demise and new laws are in the making. Regardless, competitive pressures are resulting in shippers paying surcharges today.

Since the rise in fuel, most shippers are very comfortable with the fact that there is a surcharge. Some have had them in place for many years and others have been putting one in place for three reasons.

First, shippers can clearly see that it’s necessary due to the fluctuation of fuel prices. Second, shippers can sometimes pass rising surcharges on to their customers; and Third, it is possible in many cases to negotiate the surcharge level. As a permanent part of most carriers' tariffs, surcharges rise and fall weekly to help truckers cope with volatile fuel prices. But if shippers would prefer to pay higher overall freight rates, many motor carriers are willing to cap—or even nearly eliminate—fuel surcharges for that shipper's specific account. Although shippers may not like paying the extra money, the surcharges are actually helping to maintain competition in the trucking industry.

There is no federal regulatory enforcement, or involvement of any kind on fuel surcharge. Fuel surcharges must be negotiated individually in contracts between customers and carriers. There is still a major flaw in this process. There is no legal requirement mandating that the fuel surcharges collected from a shipper be passed on to the person who actually paid for the fuel in order for a load to be hauled.

TruckMaster would like to here your thoughts on this issue. How do you think the laws should read?

Please provide us feedback on how what your company thinks about how fuel surcharges should be passed on. It would be interesting to see how everyone out there feels about this hot topic.

Donna Bratton
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

25 years ago, I worked for a freight brokerage company in Yakima, WA. It is a good company and is still in operation today. I left there about 19 years ago, but the one thing I remember most from that experience was something the boss would say on a regular basis, "Guys, we don’t have any trucks, so we aren’t a trucking company; and we don’t have a warehouse, so we aren’t a shipper with product to sell, so what do we have to offer? Service! That’s all we have, that’s all we are – service. So let's be the very best we can be. Let’s offer our customers more than 'get-by' service, let's give them spectacular service.”

The boss reminded us of the time he was brokering produce in Southern California and sold a truck load of cantaloupe of a specific quality and size to a market place in New York City. When the truck arrived for pickup, the shipping warehouse was out of that quality and size. What did the shipper do? He loaded the truck up with a better quality fruit and sent it on its way. He didn't ask, or even suggest there should be a price change. He merely stated it was his fault so rather than cheating a customer by defaulting on the contract or sending a product of lesser quality; his philosophy was to send a better product. After all, "it doesn’t cost anymore to be magnanimous." He knew the customer would be back for more if he treated him right.

How is your service perceived by your customers? Do you stand out in the crowd of freight brokerage companies as one that cares about doing business the right way? As a freight brokerage company, all you have to offer is service. Here are some questions to ask yourself and your employees:

1. Do our customers and their needs always come first?
2. Are we looking for ways to better serve our customers?
3. Is the service we have to offer going to bring new customers to the table?
4. Is our service such that our customers tell their friends about us?

With excellent software available from TruckMaster Logistics Systems, Inc, offering superior service to your customers is easier than ever before. With information including; customer and customer load information, carrier information, truck location and check call information, available at your fingertips from anywhere in the world you are able to offer excellent service to your customers.

Now, the conclusion of the cantaloupe story, the NYC market was so impressed with the melons they received that they started ordering from this shipper exclusively.

What do you have to offer? Service! Does it cost you any more to be magnanimous? No! Call us at TruckMaster Logistics Systems, 888-891-9550, or visit us at our website and let us show you how you can stand out as a leader in freight brokerage service.

Dale Clark
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

Why should a shipper choose to use your brokerage company to move their freight, rather than dealing directly with carriers? Unless you add something of value to the transaction, they will not choose you. Let’s look at some of these value added services and how you can improve your customer satisfaction rating.

One reason a shipper will choose to use a broker is to avoid adding additional manpower costs to his payroll. As long as the services you are providing are less expensive than additional employees, shippers will continue to use brokers. These services include carrier certification, driver communications, handling claims, and carrier payables. If these are handled well, you will have a satisfied customer that will continue to value your partnership. There may be other services that are unique to your market niche. Be aware of the services that you are expected to provide and do them well.

A second reason to use brokers is to provide a more stable rate structure. For example, if a company uses a broker for a specific lane, his rate will remain fairly constant for that lane. But if he is using many different carriers, the rate will fluctuate drastically. When shippers are planning the cost of moving freight, this ‘rate stability’ is important to them when determining the cost of the product they are shipping. Forward forecasting relies heavily on rate stability.

A final reason that some shippers use brokers is to insulate themselves from lawsuits. If the shipper deals directly with the carriers, he is responsible for insuring all his carriers and their drivers are safe and all the carriers all have cargo and liability insurance. If he uses a broker, however, he has an insulating layer between himself and the carrier. But that means that you can also be involved in possible lawsuits. I cannot emphasize enough the importance of brokers establishing and following proper carrier certification and having cargo and liability insurance. Shippers also need to know your certification policies and insurance information.

Add value for your customers and you will be partners indefinitely. However if you just coast along and do not add much value, soon you will be without customers. If you are too busy to handle the small issues that pop up, soon you will have plenty of time.

Using TruckMaster’s Freight Brokerage Software will help you manage your business and keep track of the small things that make a world of difference to your business. Contact us today for a free demo.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

I was talking to a friend of mine, who runs a small freight brokerage business with satellite offices (agencies) in six locations across the US. I asked how business was going, he told me fine except he wished he had a better handle on what all of the agents were doing. "Like what?" I asked. He said that a couple of the agents only send what they have "invoiced" to the main office, nothing else. He said he knew they were missing loads, but didn’t know what, and didn’t know how to find out. I asked how all of his offices were connected, or if they were connected. He explained their operation as follows:

Each evening, just before closing, each agency is required to fax all of the loads that were loaded and the loads that were "invoiced" that day to the main office. The next morning, his billing clerk enters all of the information received the previous night into the software they are using, and creates a ‘duplicate’ original invoice that is actually mailed to the customer. Then the loads that are in transit are posted on a grease board in the main office where he can see pending invoices.

What he is afraid of is that some of his agents are taking freight and then realizing they can’t move it so they give it back or worse – just ignore it, fail to perform, and ruin his reputation with his customers. He calls this his lost revenue.

I explained that with good freight brokerage software, like that available from TruckMaster, all of his offices can be tied together in such a way that each office can only see the freight specific to that office, and at the same time he has total visibility. In other words, if one of his offices can't move a load, he can see it and offer to help. If he wants all of his agents to see all of the freight in all of the offices, or if he has agencies that want to share information, that is easily done.

With TruckMaster brokerage software and real time connectivity, each office can create its own loads, print carrier confirmations, create, print and mail its own invoices to the customers. A billing clerk in the main office doesn't have to waste time recreating loads and invoices that are already there, but would only manage the various receivables from the agents.

Agents can truly manage their own agencies while still under the umbrella of the main company. Additionally, as freight is entered by satellite offices, the master planners are able to see all of the freight, offer suggestions for efficiently handling the freight, or even move the freight as necessary. Also, corporate freight entered by the master planners can be assigned to localized agents for effective movement. It’s a case of agents helping the main company and the main company helping the agents. It’s a win-win situation.

Is connectivity right for you? If you have multiple offices or agents and you want to keep up with what they are doing on a real time basis, the answer is an emphatic yes!

Visit the TruckMaster Freight Brokerage Software website or call us at 888-891-9550 today and request a demo. See what connectivity can do to enhance and grow your business. Ask about our multi-office freight brokerage special.

Dale Clark
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™