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Three Ways to Recognize Double Brokering

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Global Logistics, Global Trade Daily, Trucking

Three Ways to Recognize Double Brokering

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The looming danger of double-brokering is on the rise, and it carries the potential for financial losses and legal troubles that could devastate your business. This, along with other fraud risks in the freight market, can quickly jeopardize your business and your reputation if you’re not careful.

Double-brokering can be prevented, but it requires careful attention to detail when verifying contact information, credentials, and documentation. Rushing the process is always a bad idea, but sometimes it can’t be avoided. However, there are indicators that should alert you to dig deeper.

What is Double-Brokering?

The most common type of double-brokering happens when a broker or shipper hires a full truckload carrier and vets their MC number, but the load is hauled by a different MC number without the knowledge or consent of the original contact. This practice is both unethical and illegal. It also puts all parties at risk should something happen to the cargo along the way.

Three Warning Signs of Double-Brokering

Here are three warning signs of double-brokering.

  1. A carrier with less than three months of authority and zero inspections
  2. Names or phone numbers are not provided for the carrier.
  3. A carrier with just a single truck, and the VIN doesn’t match the one you have on record.

Ways to Avoid Double-Brokering

Avoiding double-brokering can be done, but it involves a proactive approach to spot suspicious behavior before it becomes a problem.

Here are ways to effectively avoid double-brokering and prevent it from happening to someone else.

  • Have the customer confirm the MC and DOT numbers for every carrier and confirm with the broker or shipper.
  • Verify contact information and communicate with your partners.
  • Call phone numbers to confirm it is the fight carrier. Virtual numbers without a physical address can also be a red flag for fraud.
  • Implement a strict carrier vetting process that’s reliable and accurate using tools like RMIS.
  • Check carrier scores confidently with software tools like Carrier Assure. If the carrier has a low score (D or F), take additional vetting measures.
  • Report carriers who double-broker right away to law enforcement and the FMCSA.

Being on the lookout for and reporting double-brokering is important to maintain trust and security in the freight market. Double-brokering can lead to financial losses, higher rates, and a lack of control over shipments. By reporting it, you help increase transparency and accountability for all parties.

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Archives, Global Logistics, Global Trade Daily, News, Uncategorized

Newtrul and Tai Join Forces to Streamline Freight Broker Load Negotiations

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Tai TMS (Tai), a fully integrated, broker platform for freight management and transportation, today announced an integration partnership with Newtrul, a dynamic platform unlocking automation and digital booking growth for mid-market brokerages.

With the integration, brokers can now create shipments and send them to Newtrul’s private load board by simply updating the shipment status. From there, users can track how many quotes are received within Tai’s company loadboard and access a truckload quoting page to review quotes and accept or reject them. Without having to sift through multiple tabs, brokers can negotiate with carriers from a single page within Tai with quotes from Newtrul’s carrier network.

For Newtrul, partnering with freight broker oriented TMS providers, like Tai, provides an influx of automation to brokers who traditionally operated manually in spreadsheets. Newtrul’s book now automation and carrier negotiation tools make it easier for carriers and brokers to move loads while automation within Tai TMS complements this process by saving booking steps. The single page data view within Tai saves each agent at a brokerage 11 hours a week on average.

As automation efforts continue to ramp and scale across the industry, Tai has identified a number of partners across the industry that not only compliment Tai’s automated platform, but bring new capabilities to freight brokers. Tai’s integration with Newtrul is another step in a long-term plan to support human capital with top-level technology.

TAI
Archives, Global Logistics, Global Trade Daily, News

Greenscreens.ai and Tai Software Partnership Enhancing Rate Accuracy for Freight Brokers 

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Tai Software (Tai), a fully integrated, broker platform for freight management and transportation, today announced a customer update in their integration partnership with Greenscreens.ai, a dynamic pricing infrastructure that optimizes and enriches historical and real-time market data to predict buy and sell prices.

For GLS, a logistics and brokerage company out of California, partnering with Tai and Greenscreens.ai has ensured the seamless flow of transactional data and empowered their brokers to fully automate their rate accuracy experience within existing systems. Instead of having to manage loads across multiple pages, GLS leverages Tai and Greenscreens.ai to streamline all rate data into a single-page view allowing brokers to make informed and quick decisions.

Greenscreens.ai analyzes historical pricing information in relation to real-time market conditions to determine a spot rate that is two-to-three times more accurate than traditional pricing methods. Intelligently priced rates are accessible within Tai and become an instant component within load execution workflows. By fully automating the buy rate and sell price process, Greenscreens.ai and Tai save brokers time while mitigating risk. Brokers can leverage automated and accurate rates to improve operational efficiency while closing more deals, issuing more quotes and increasing their volume per rep.

As manual processes continue to dominate the industry, Tai has continued to facilitate relationships with industry leaders such as Greenscreens.ai. With direct integrations to carriers, load boards, automation and capacity tools Tai provides unmatched speed and scalability for brokers looking to drive their business forward.

Brokers remain resilient despite continued freight market softening in the third quarter
Archives, Global Logistics, Global Trade Daily, News

Brokers Remain Resilient Despite Continued Freight Market Softening in the Third Quarter

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A slight rebound of the broader economy in the third quarter failed to translate to strength for the freight market. Brokers nevertheless managed to grow their business quarter over quarter and year over year, a trend that continued from the second quarter and is expected to carry into the fourth quarter, according to the latest data from the Transportation Intermediaries Association’s 3PL Market Report, Third Quarter 2022.

“There’s no doubt the third quarter proved to be a weaker environment for freight,” said TIA President and CEO Anne Reinke. “But we’re seeing relative stability among our members, who outperformed the broader market for total shipment volume. Their expertise and efficiencies in a tough marketplace have carried them through and the data points to a lasting resilience among brokers post-pandemic.”

Third-quarter real gross domestic product rose 2.9 percent, but key contributors to that gain, including weaker goods imports and increased consumer spending, didn’t lift the portion of the economy linked to freight. Imports count as a negative in the calculation of GDP, but they are important to the freight economy. Meanwhile, the rise in consumption occurred in services while spending on goods eased slightly. Increased pricing power among shippers led to a decrease in invoice amount per load for the second consecutive quarter. Brokers’ services have been fueled by high consumer spending and a constrained supply chain environment over the last two years. We anticipate this strength in the marketplace continuing into the fourth quarter as capacity constraints continue to loosen.

TIA’s 3PL Market Report is released on a quarterly basis and uses data collected from 35 participating TIA members to analyze shifts in broker activity, which is largely dominated by the truckload sector. FTR Transportation Intelligence prepared this quarter’s report.

Additional Takeaways and Trends Include:

  • Consumer spending remained stronger than expected for the quarter given inflation-led price increases, but that spending has been mostly in services. The personal savings rate recently fell to a nearly record-breaking level — a strong indicator that consumer spending is about to drop off in the coming quarters, which will negatively impact the freight economy.
  • Intermodal, which makes up about 15 percent of all brokerage activity, experienced quarter-over-quarter and year-over-year declines in volume owing to a combination of subpar rail service and labor uncertainties at West Coast ports. Ocean shipments are instead going through East Coast and Gulf Coast ports where they’re more often transferred to trucks than rail. Long-term, the segment is proving less reliable for freight networks than other segments.
  • The glut of small carrier failures first noted in the second quarter of 2022 carried into this quarter. Yet, the number of new for-hire trucking companies remains strong, a trend that points in part to technology advancements enabling intermediaries to work more efficiently with small operators using digital freight platforms.
  • The automotive sector remains a bright spot for freight as real inventories of motor vehicles and parts are still about 21 percent below Q419. Unless vehicle sales weaken substantially, auto manufacturers likely would maintain production levels and that benefits the freight market.
Less than a year after spinning off its contract logistics business, XPO Logistics has said that it will separate its North American
Archives, Global Logistics, Global Trade Daily, News

XPO splits business to simplify and increase value

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Less than a year after spinning off its contract logistics business, XPO Logistics has said that it will separate its North American less-than-trailer load operation and freight brokerage into “two focused, publicly traded companies at the top of their industries”. In addition, XPO said that it “expects to divest its European business and North American intermodal operation to simplify its transportation service offering.”

The truck brokerage will be launched as a separate company by the end of 2022. XPO Logistics said that it had “an exclusivity agreement in connection with a potential sale of its intermodal business, which provides rail brokerage and drayage services”.

The restructuring is the result of the creator and CEO of XPO, Brad Jacobs, manoeuvring his assets to get the best possible valuation for his companies from the capital markets. Like the oil trader that he was, Brad Jacobs is trying different pitches to investors in order to maximize his returns, describing “a large universe of investors who want to invest in a pure-play like LTL that’s asset-based with a high return on capital and levered to the ongoing industrial recovery.” Whilst a different group of investors “want to invest in an asset-light, tech-enabled truck brokerage platform that the spin-off will be”. Brad Jacobs said that the difference in valuation was huge, with other more focused LSPs valued at “around fifteen times EBITDA, we are trading at about seven and a half EBITDA.”

There is an operational reality behind the move, with Mr Jacobs admitting that “when a management team is focused solely on one thing, they do a better job”, but the main motivation appears to be shareholder value.

Once one of the largest logistics companies in the World, XPO Logistics will essentially be no more, rather it will create a legacy of a string of still quite large, focused firms across much of the logistics services markets, including contract logistics, LTL and ‘truck brokerage’. It is a singular approach, with much of the rest of the logistics sector pursuing acquisitions and diversification at a furious pace. That an investor as successful and experienced as Brad Jacobs is so strongly moving away from such a strategy is worth thinking about.

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3pls, Archives, Global Logistics, Global Trade Daily

Proven Ways to Grow your Freight Brokerage Business

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A quick look at the current shipping industry will show you that there is no shortage of freight brokerage businesses. Numerous companies offer their services all around the world, with various degrees of quality and cost. So, among all that competition, is there a way for you to grow your freight brokerage business? The short answer is yes, there is. But, like with most things in freight shipping, it is not going to be easy.

Understanding the ongoing changes in the freight industry

Growing your freight brokerage business is a multilayer process that we will elaborate on in the following passage. But before we do, it is important to give you a perspective of what the current shipping industry is like. Even before COVID-19 hit, the shipping industry as a whole was experiencing some significant changes. So, while we will go over the most notable aspects, keep in mind that these are just some broad strokes. Technological advancements, both in logistics and in shipping capabilities, came as quite a surprise.

Developments in AI allow for a much greater sense of efficiency and safety, which is why future freight companies won’t be able to stay competitive without it. Eco-friendliness is also a significant concern as fossil fuels tend to be the least-favorite choice among the current companies. We are still far from relying solely on renewable energy sources, but energy development is going in an eco-friendly direction. The final point to keep in mind is that modern customers’ demands are higher than ever. Due to offers like overnight shipping, customers have grown to expect a high degree of service. So, if you are going to stay competitive, you need to ensure top efficiency.

Grow your freight brokerage business – step by step

Seeing how big the freight shipping industry is and how many emerging technologies there are, you shouldn’t try to tackle all of it. The safest way to grow your freight brokerage business is to outline a particular aspect of freight shipping and excel at it.

Step 1: Identify your target audience

Who your target audience depends on numerous factors. Your location, which services you have available, which industries are predominant in your area, etc. If you wish to grow your freight brokerage company, your primary job is to first outline your target audience. The clearer you can pinpoint to whom you can cater your freight brokerage service, the better. Seeing that finding new customers will likely be an ongoing task, we suggest that you outline the “Ideal customer”. That way, your employees can more easily identify potential customers.

Step 2: Outline their needs and requirements

The second step you need to take is to clearly outline the needs of your target audience. You will likely have an idea of what they need. But you won’t have the complete picture until you start doing research and asking questions. Most agents will be more than happy to outline their needs and whether the current provides are satisfactory. Some might even give you ideas on which services are most lacking and where you can easily get ahead of your competition.

Step 3: Improve your technology so that it can facilitate the needs of your customers

Once you understand the needs of your audience, you need to alter your company so that it can best fulfill them. By this, we mean implementing new technologies that allow for more efficiency. Apart from logistics technologies, you can look into CRM solutions and communication technologies to help your customers more expediently.

Step 4: Tackle marketing with due care

One of the common mistakes people make in the freight industry is not tackling marketing with enough vigor. Believing that having a simple website or running a social media profile is enough for a serious company is something you ought to avoid. To draw in and keep your audience, you need to run an active website. This not only means tackling your SEO and posting the necessary blogs. But also managing your social media and ensuring that you have the proper brand recognition. Good freight brokers know that projecting an idea of efficiency and stability is essential to drawing in new customers. And the only way to make that possible is to adapt your online presence to your needs and ensure that your marketing is on point.

Step 5: Set up performance metrics and keep track of your endeavors

Finally, to ensure that your effort produces results, you need to set up performance metrics. Besides measuring how many new customers you get each month, you also need to track how effective your marketing is. Even in B2B marketing, you need to invest substantial funds to develop an online presence. So, do yourself a favor and ensure that your investments are paying off. By setting up clear performance metrics, you can see how your business decisions impact your revenue and whether you need to make any alterations.

Final thoughts

The main point to keep in mind to grow your freight brokerage business is to stay within your niche. The better you can outline what your target audience needs, the easier it will be to make cost-effective business decisions. If you manage to become the top local freight brokerage business within an area, we are sure that you will have no problem spreading your business out to other areas. But, it is essential to develop a healthy base and a firm understanding of what your customers need. Modern industry requirements don’t allow you to spread yourself too thin. Doing so is not only ineffective but is likely to cause you substantial loss in revenue. And seeing how fierce the competition is, it has become more important than ever to excel within a relatively small niche.

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Ryan Smith has worked as a shipping manager and a logistics consultant for over 20 years. He now focuses on writing helpful articles for tbmoving.com and other relocation and shipping companies, as well as providing consultation for large-scale logistics planning.

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Archives, Global Trade Daily, International Trade

It’s All About Relationship with Freight Brokers. Here’s Why.

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Several moving parts exist to make the transportation and logistics industry succeed. From truck drivers and innovative technology companies, to shippers, carriers, and freight brokers, each part of the marketplace helps create smoother transfer of goods while improving efficiencies across the board. When it comes to freight brokers – the licensed intermediaries who work to connect carriers and manufacturers – the ability to run a successful operation relies on a foundation of business relationships. Freight brokers must take the time to cultivate their partnerships and connections from day one to ensure they have what they need to sustain a viable business.

Understanding the Freight Brokerage Business

Recent statistics estimate the total number of freight brokers working in the United States to be slightly more than 17,000. Some work independently under their own business structure while others are employed by large brokerage firms. In either scenario, licensed brokers have to go through distinct steps to ensure they are operating within current federal laws. The most important part of the licensing process is registration and obtaining motor carrier authority through the Federal Motor Carrier Safety Administration.

Along with this requirement, freight brokers must also go through formal training at a freight broker training school to learn what is necessary to become effective in the field. The licensing regulations also require brokers to hold a bond or a trust, with the most common choice being a freight broker bond. Obtaining a freight broker bond is one of the first situations where a strong relationship is necessary.

A bond is a form of credit extended to the broker, based on their financial track record and credit history. If a claim is made against the bond because the broker has engaged in business practices outside the lines of federal regulations, the claim amount is paid from the bond on behalf of the broker. This structure means that the surety company offering the bond must trust that the freight broker is a good candidate for the bond, meaning there will be minimal claims in the future. Maintaining a relationship with the surety company is beneficial when bonds renew, and it can be helpful when claims arise.

Relationships and Cash Flow Help

Business relationships are also a crucial aspect of a freight broker’s business when it comes to financial partners. Banks, credit unions, and online lenders exist to help small businesses fund large projects, expansion, or to cover cash flow when the need arises. However, without a relationship with certain lenders or finance companies, freight brokers may find themselves in a hard to navigate position.

For some freight brokers, cash flow can become tight when customers are slow to pay or when business slows down. The business still has overhead to pay, and there may be a need for increased marketing or advertising to entice new customers to connect. Each of these issues requires available capital. A relationship with a finance company, such as an invoice factoring, small business loan, or line of credit lender can make all the difference in getting through a dry spell or a time of high growth.

Keeping Customers Satisfied

Finally, relationships are essential to freight brokers when it comes to working with their customers. Although the size of the freight brokerage market is small compared to other facets of the transportation or logistics industry, competition grows each day. The barriers to entry to start a brokerage business are minimal, as are start-up costs, and so many with industry experience join the ranks of freight brokers consistently year over year. The increased number of licensed brokers can make it challenging for seasoned professionals to keep the upper hand on competitors.

Maintaining strong working relationships with customers, business connections, and networking partners are necessary to keep ahead of the competition. When other professionals in the industry know that a particular broker is known for delivering on his or her promise to shippers and carriers, they are likely to stay busy with work. Similarly, having processes in place for clear communication and managing issues when they come about helps strengthen relationships over time.

Being in the freight brokerage market can offer a lucrative career path for those with a passion for moving freight efficiently. However, healthy relationships are a must throughout nearly every aspect of the business. Brokers need to ensure they have built up and can maintain good connections with their surety company, finance partners, and of course, their customers and business partners, if they want to be successful now and in the future.

 

Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.