These Are The Most Crucial Elements to Assess When Selecting a Freight Broker for your Business:
Licensing Compliance
Ensure the freight broker holds the necessary licensing, as mandated by federal law, issued by the Federal Motor Carrier Safety Administration (FMCSA). Verify the broker’s licensing status through the FMCSA Licensing and Insurance Verification portal.
The following link is the site to use to evaluate whether the broker is properly licensed: FMCSA Licensing and Insurance Verification.
Financial Stability
Assess the financial health of the freight broker, recognizing that financial instability can pose risks to your business. Conduct thorough credit checks to gauge the broker’s financial standing and mitigate potential liabilities.
Insurance Coverage
Scrutinize the broker’s insurance policies, particularly contingent cargo or shipper’s interest policies, to safeguard against unforeseen losses or damages during transit. Also, connect with your legal department to gather the other policies and coverages they want to see from a freight provider on commercial liability, automobile liability, errors & omissions, cyber, workers compensation and employment liability.
Carrier Compliance
Inquire about the broker’s carrier qualification process to ensure alignment with your standards. Evaluate criteria such as insurance, safety records, financial strength, and operating authority.
Years of Experience
While not definitive, longevity in the industry often signifies reliability and resilience. Consider the tenure of the freight broker as a factor in assessing their track record.
Diverse Services Offered
Opt for a broker offering a range of freight modes and services, providing flexibility and scalability to meet your evolving logistics needs.
Operational Model
Understand how the broker operates, whether through a distributed task-based system or dedicated customer managers. The latter fosters stronger relationships and personalized service.
Technology Infrastructure
Assess the broker’s Transportation Management System (TMS) capabilities, ensuring they leverage modern, cloud-based systems for optimal efficiency and transparency.
Reputation and References
Seek references from the broker and explore their reputation within the industry. Membership in reputable trade associations can serve as an indicator of credibility and professionalism. The following associations are a good place to start.
- Transportation Intermediaries Association (TIA)
- Intermodal Association of North America (IANA)
- SmartWay Carrier
Digital Footprint
Evaluate the broker’s online presence through their website, social media profiles, and professional networks. A robust online presence reflects a commitment to transparency, communication and knowledge in the industry.
In the end, the right freight provider partner should be able to leverage multiple modes when possible – truckload, intermodal, LTL or a combo – to get the job done in the most efficient manner. And it should incorporate the latest technology to plug in to market conditions, capacity availability, license and safety information, and shipment track and trace (shared with the shipper as well).
