In 2022, the freight trucking industry is valued at $269.7 billion. One of the ways to make money in the freight industry is to become a freight broker.
If you’ve started working as a freight broker, however, you may quickly find that there are a lot of challenges to face. There are some common problems that freight brokers deal with when working to become profitable and gain leads.
Here are the 7 major challenges of being a freight broker and how you can overcome them.
1. Running a Brokerage With a Lack of Experience
A key challenge that freight brokers face is not recognizing how valuable experience in the trucking and logistics industry is.
There’s a lot of opportunity in freight brokering. At first glance, it seems that all someone needs to get started is a leads list and a phone.
However, it’s not quite so simple. Freight brokers really need to know what they’re talking about and should have a thorough understanding of the industry.
For freight brokers who don’t have hands-on industry experience in transportation and logistics, it can be a challenge when running a freight service company. It can also be difficult to have the connections and business relationships when getting started that those with industry experience will already have.
To combat this challenge, make sure that you do everything you can to learn deeply about the industry before trying to make money as a broker.
2. Not Having a Marketing Plan
One of the challenges that freight brokers face is marketing their services effectively. Many freight brokers fail to focus on marketing enough and their businesses suffer as a result.
Fortunately, there are many ways to market a freight brokering business these days and plenty of digital marketing strategies that you can use. You can also automate much of the process by running email automation, online ads, and using other useful online marketing techniques.
3. Failing to Provide Quality Service
Many brokers fail to put in the effort to provide a quality level of service to clients.
Many freight brokerages have trouble offering top-of-the-line service and meet deadlines or providing reliable carriers. Brokerages who can’t provide great service and satisfy their customers completely probably won’t be in business for very long.
To deal with this challenge, it’s important to leverage technology and stay organized. Always ensure that you can provide a superior level of service to clients.
4. Having High Overhead
One of the problems that a brokerage will face is having too much overhead.
There’s a lot of pressure on margins in a brokerage business so it’s important to have as low an overhead as possible to ensure that you can remain profitable. Look for ways to minimize your expenses as much as you can. This could include making use of remote agents, eliminating the need for office space, or finding other ways to save money.
All you really need is a computer and a phone to run a freight brokerage, so make sure that you’re not using anything that you don’t actually need.
5. Failing to Quote Accurately
One of the challenges that freight brokers face is failing to stick to the prices that they’ve quoted.
For a new and small brokerage, it can be especially difficult to stick to quoted rates and to set the right pricing from the very beginning. A broker may set their rates too low or too high and may not be realistic about their margins and their competition.
To avoid this, it’s important to find out about industry trends when it comes to pricing. You should ensure that all freight rates are set correctly from the very beginning and remain accurate as time goes on.
6. Not Communicating Well
A major mistake that new freight brokers make is that they don’t communicate well with their clients.
Failing to respond in a timely manner to requests and communication is a big mistake. It can lead to a poor reputation and missing out on customers.
Many small brokerages can get overwhelmed easily in the beginning when there are a lot of prospects asking questions. To avoid this, it’s important to use lead management tools such as LoadPilot Freight Broker Software to send quotes and stay on top of all communications with prospects and leads.
7. Failure to Deal With Issues
One of the biggest issues that freight brokers face is not being able to take an adequate amount of action when problems arise.
When there are problems, it can be tough for a freight broker to solve them based on the data that they have. Working with outdated data can cause problems with managing shipments and ensuring that issues can be addressed to satisfaction.
To deal with these issues, it’s important to use real-time data so that there will be plenty of clarity about what is happening with a shipment. When communicating and addressing problems, real-time data will be the most useful tool for helping customers and responding to their needs successfully.
Facing These Common Challenges as a Freight Broker
If you’re working to get business as a freight broker, it’s important that you know how to face the common challenges that you’ll come across in the industry.
Being a successful freight broker can be hard work, so you need to ensure that you’re planning for all of the potential problems ahead of time. Be sure that you work hard to improve communication, give accurate quotes, provide quality service, and resolve issues.
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