Freight brokers have an essential role in the U.S. transportation industry today. Their task is to skillfully link shippers and carriers, optimizing the work of all parties.
But what does it take to become a successful freight broker? The demand for brokering services is steady, so it’s a matter of having the right strategy in order to skyrocket your entrepreneurial endeavor, whether new or established.
While it’s difficult to pinpoint a recipe for success, prominent freight brokers do follow certain patterns in order to boost their businesses. In this guide, you will find ten of the most important tips that can help you fuel your brokerage’s performance on the market.
1. Craft your business strategy in advance
It all starts with a solid plan in the form of a relevant and timely business strategy. It should account for the specifics of the market at the current moment and the strong sides of your brokerage, among other things. Your business plan should also contain startup costs and steps, annual milestones and revenue projections, as well as your overarching goals. The U.S. Small Business Administration offers a free online business plan builder, which can be a good starting point.
2. Carve out your niche
In most industries, generalists manage to earn a steady piece of the pie. However, oftentimes the businesses that choose to specialize in a niche are the ones that truly stand out on the market. In order to do that, you will need to analyze the current business setting, and identify an opportunity which you can fill in. This would typically involve selecting a specific type of cargo or locations. The way you can differentiate your brokerage, however, can take different forms, such as the quality and approach of customer service, and your guarantees that you will provide.
3. Ensure your legal compliance
Running a winning business requires complying with the rules that govern your trade. In the case of freight brokers, this includes yearly renewal of your Federal Motor Carrier Safety Administration’s (FMCSA) operating authority and maintaining an active freight broker surety bond. By ensuring that you satisfy the full set of relevant requirements at all times, you can boldly focus on your business goals without worrying about administrative hurdles.
4. Get technology on your side
From fuel efficiency to GPS cargo tracking, technological innovations are reshaping the transportation industry. Don’t be the odd one out during this process. Your chances for success are higher if you use helpful technology for your business needs. Logistics mobile apps can be of great use in delivery logging, cargo optimization, lead generation, and practically all your brokering activities.
5. Choose the right freight management software
In recent years, freight management solutions have become the central place for organizing and streamlining a successful brokerage. You should choose the tool that best fits the needs of your business. The essential features you should look for are automatization of recurring administrative and operational tasks, shipment planning and management, service billing, communication tracking, and freight claims management, among others.
6. Don’t underestimate branding and relationship-building
The importance of branding for freight brokering companies should not be overlooked. As in any business field, you need to create a recognizable face and establish your position as a trustworthy partner, so that people consistently choose to work with you. Branding and relationship-building are essential in this respect, as they allow you to foster new business opportunities.
7. Dedicate efforts to proven marketing techniques
The marketing strategy for your brokerage should involve more elaborate activities than getting listed on business directories. A successful approach entails a steady and targeted social media presence. On social platforms, you can reach out to wider audiences with your business offers and establish your brand position.
8. Seek and maintain professional memberships
It’s difficult, if not impossible, to run a brokerage in a vacuum. If you stay connected with your peers, you have significantly better chances for success. This involves attending industry events, and being a member of professional organizations and forums, such as the Transportation Intermediaries Association (TIA). That’s how you can obtain important information about developments in the field and nurture key connections that can grow into winning partnerships.
9. Keep ramping up your skill set
Even if your business is successful from the start, that’s still a good reason to continue improving your brokering skills. The essential ones include communication and negotiation. Networking is also key, and is based on the previous two skills. However, you should also consider improving your foreign language knowledge, for example, as it can open up new business opportunities.
10. Never stop upgrading your knowledge
The transportation field in the U.S. is fast-paced, and requires players to be agile. Staying on top of the game entails that you keep enriching your industry knowledge. It also means that you have to be adaptable, and embrace innovations as they come. That’s why it pays off to undergo different trainings, and stay informed about trends in the field through networking and events.
These ten approaches for running a successful freight brokerage cover both your short-term and long-term performance. Do you have proven tips for boosting the performance of a freight business? Please share your valuable insights in the comment section below.
Vic Lance is the founder and president of Lance Surety Bond Associates. He is a surety bond expert who helps business owners get licensed and bonded. Vic graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan’s Ross School of Business.