Opinion: The Broker’s Role
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By Marc MeskinPresidentDiversified Transportation ServicesAccording to the most recent Federal Motor Carrier Safety Administration census, there are now 16,930 registered transportation brokers. These numbers have been growing at a rate of 30% over the course of the past three years. This is a good indication that brokers serve a useful purpose in the transportation marketplace with both carriers and shippers.
Why then is there so much friction and animosity between carriers and the brokerage community? Why is it that all too many carriers have developed a love/hate relationship with brokers? Carriers appreciate and need the business that brokers generate, but hate the fact that they had to get that business from a broker and not from their own direct sales force.As the president of a transportation brokerage, I often feel as though I am a goodwill ambassador for the entire brokerage community. I try not to forget my own roots in carrier management, and I know from experience that carriers have had some bad results with a few brokers over the course of time. It hurts our reputation as a transportation brokerage when carriers have bad experiences with brokers who: • Pay slowly or go out of business without paying them at all. • Don’t know their customer’s freight, i.e., product classification, value, loading capabilities, etc.• Don’t get involved when there is a problem.• Don’t care about the carrier’s perspective.• Oversell the carrier’s services.• Conduct their businesses in an extremely self-serving manner. To put it bluntly, there is a percentage of the brokerage community that just doesn’t care about the carrier’s interests the way it should. Unfortunately, these bad experiences serve as further evidence in support of the anti-broker sentiment that, as I see it, now permeates the corporate offices of too many trucking companies. The antidote for that is for brokers to: • Respect the carrier’s profit motive and customer base, so as not to “back solicit” and potentially dilute the carrier’s revenue base.• Remit payments in a timely manner — whether or not they have been paid by their clients.• Teach shippers and salespeople the rules affecting the movement of their product. • Act as the carrier’s advocate when issues arise, and truly strive to be a good business partner.Although I can speak only for my own company’s philosophy as it relates to carrier relations, I can speak to the fact that if carriers are selective, they will find a great many brokers that can become valuable, long-term partners. Just as travel agents are important to airlines, carrier relations are vital to the success of any transportation brokerage. It should be obvious to carriers that the brokerage community serves a vital function in the marketplace and collectively manages an extremely large book of business. The carrier-broker relationship is one of interdependence and should not be adversarial in nature. We need each other; selectivity is the key to establishing solid broker-carrier relationships.Of course, there are good brokers and there are bad brokers, just as with any other industry. Carriers must make sure to choose their brokerage partners carefully. If a carrier chooses to partner with a mismanaged, undercapitalized, start-up brokerage, the likelihood of perpetuating the anti-broker sentiment will be great — a classic example of a self-fulfilling prophecy.The bottom line is that transportation brokers are an integral part of the shipping process and play a vital role in the transportation community. Assuming that the numbers do not lie, brokers appear to be here to stay. If carriers do their homework, they will surely find that there are a large number of good, reputable, well-capitalized, well-managed brokerages available that aspire to establishing mutually beneficial, long-term partnerships with carriers. These alliances can be invaluable in enabling a carrier to become more productive and more cost-effective, making optimal use of assets and meeting business goals.Choose your broker partners carefully.This opinion piece appears in the Feb. 26 print edition of Transport Topics. Subscribe today.
By Marc MeskinPresidentDiversified Transportation ServicesAccording to the most recent Federal Motor Carrier Safety Administration census, there are now 16,930 registered transportation brokers. These numbers have been growing at a rate of 30% over the course of the past three years. This is a good indication that brokers serve a useful purpose in the transportation marketplace with both carriers and shippers.
Why then is there so much friction and animosity between carriers and the brokerage community? Why is it that all too many carriers have developed a love/hate relationship with brokers? Carriers appreciate and need the business that brokers generate, but hate the fact that they had to get that business from a broker and not from their own direct sales force.As the president of a transportation brokerage, I often feel as though I am a goodwill ambassador for the entire brokerage community. I try not to forget my own roots in carrier management, and I know from experience that carriers have had some bad results with a few brokers over the course of time. It hurts our reputation as a transportation brokerage when carriers have bad experiences with brokers who: • Pay slowly or go out of business without paying them at all. • Don’t know their customer’s freight, i.e., product classification, value, loading capabilities, etc.• Don’t get involved when there is a problem.• Don’t care about the carrier’s perspective.• Oversell the carrier’s services.• Conduct their businesses in an extremely self-serving manner. To put it bluntly, there is a percentage of the brokerage community that just doesn’t care about the carrier’s interests the way it should. Unfortunately, these bad experiences serve as further evidence in support of the anti-broker sentiment that, as I see it, now permeates the corporate offices of too many trucking companies. The antidote for that is for brokers to: • Respect the carrier’s profit motive and customer base, so as not to “back solicit” and potentially dilute the carrier’s revenue base.• Remit payments in a timely manner — whether or not they have been paid by their clients.• Teach shippers and salespeople the rules affecting the movement of their product. • Act as the carrier’s advocate when issues arise, and truly strive to be a good business partner.Although I can speak only for my own company’s philosophy as it relates to carrier relations, I can speak to the fact that if carriers are selective, they will find a great many brokers that can become valuable, long-term partners. Just as travel agents are important to airlines, carrier relations are vital to the success of any transportation brokerage. It should be obvious to carriers that the brokerage community serves a vital function in the marketplace and collectively manages an extremely large book of business. The carrier-broker relationship is one of interdependence and should not be adversarial in nature. We need each other; selectivity is the key to establishing solid broker-carrier relationships.Of course, there are good brokers and there are bad brokers, just as with any other industry. Carriers must make sure to choose their brokerage partners carefully. If a carrier chooses to partner with a mismanaged, undercapitalized, start-up brokerage, the likelihood of perpetuating the anti-broker sentiment will be great — a classic example of a self-fulfilling prophecy.The bottom line is that transportation brokers are an integral part of the shipping process and play a vital role in the transportation community. Assuming that the numbers do not lie, brokers appear to be here to stay. If carriers do their homework, they will surely find that there are a large number of good, reputable, well-capitalized, well-managed brokerages available that aspire to establishing mutually beneficial, long-term partnerships with carriers. These alliances can be invaluable in enabling a carrier to become more productive and more cost-effective, making optimal use of assets and meeting business goals.Choose your broker partners carefully.This opinion piece appears in the Feb. 26 print edition of Transport Topics. Subscribe today.
