Technology is becoming indispensable in all aspects of transportation management, especially in third-party logistics (3PL) and freight brokerage businesses. On the one hand, one may claim that technology is upending the established order. On the other side, one may argue that it contributes to leveling the playing field. How important is technology in assisting freight brkers, particularly small and medium-sized enterprises, in remaining competitive?
It’s an understatement to say that freight brokerage and logistics are competitive, especially in recent years. Due to the pandemic, many individuals purchase items online and have them delivered to their homes. In June, July, and August last year, truckload volumes and prices reached new highs. Each week, it appears that a new record is established in the industry. Finding vehicles has become increasingly challenging as a freight broker or third-party logistics provider due to high volumes and rates, supply chain issues, and a labor shortage.
Using technology to optimize freight operations is one of the most successful strategies for coping with market volatility and capacity constraints. Freight brokers may leverage various techniques to keep one step ahead of their competition and thrive in a continuously changing market. Below are some ways through which freight brokers are using technology to remain competitive and profitable.
Secrets To Making More Money As A Freight Broker
1 Align Your Marketing With Your Business Goals
Technology is becoming indispensable in all aspects of transportation management, especially in third-party logistics (3PL) and freight brokerage businesses. On the one hand, one may claim that technology is upending the established order. On the other side, one may argue that it contributes to leveling the playing field. How important is technology in assisting freight brkers, particularly small and medium-sized enterprises, in remaining competitive?
It’s an understatement to say that freight brokerage and logistics are competitive, especially in recent years. Due to the pandemic, many individuals purchase items online and have them delivered to their homes. In June, July, and August last year, truckload volumes and prices reached new highs. Each week, it appears that a new record is established in the industry. Finding vehicles has become increasingly challenging as a freight broker or third-party logistics provider due to high volumes and rates, supply chain issues, and a labor shortage.
Using technology to optimize freight operations is one of the most successful strategies for coping with market volatility and capacity constraints. Freight brokers may leverage various techniques to keep one step ahead of their competition and thrive in a continuously changing market. Below are some ways through which freight brokers are using technology to remain competitive and profitable.
2 Play To Your Strengths And Stand Out From The Competition
You want to expand your freight brokerage business, that’s great. But in what direction? There are hundreds of niches in the freight broker business, and it is almost impossible to be an expert in all of these. Creating a niche in the freight broking business can be an excellent way to build connections and trust. Suppose you pick one or two niches and specialize in those industries, geographies, trailer types, or lanes. In that case, the shippers and carriers operating in those areas will easily identify with your business. The more of an expert you become in those niches, the higher premium you can charge for your expertise.
The goal is to dominate a niche in your line of business. If you try to be all things to all shippers, you might spend too much time chasing unprofitable business just for the sake of growth. Instead, you need to be strategic because it’s all about profits. Focusing your freight brokerage on where you can build the best relationships and add the most value will deliver you the best results in the long run.
And when you do decide to expand to other types of freight brokerage, make sure to begin by partnering with an experienced freight agency so that you don’t need to worry about leads.
3 Reduce Fixed Costs To Grow Profit Margins
Acquiring new customers, grabbing new opportunities, and staying on top of business management all demand your time and money. The most successful freight brokers identify the most efficient ways to manage their time and reduce costs by outsourcing tasks to other professionals when it is beneficial to the business.
The simplest yet most often overlooked aspect of growing your profit is reducing your fixed costs. Unfortunately, growing businesses are prone to hiring more employees than needed, and business owners end up spending more time trying to get the best productivity out of non-performers rather than focusing on business growth.
Freight BnB’s experience over the past half-decade has shown that freight brokers who outsource instead of employing freight agents can increase their profit by up to 50% just by eliminating this fixed cost of staffing.
Additionally, by outsourcing to an agency, you’ll get the advantage of flexibility and potential for expansion in an ever-evolving market; it will shield your business from the supply and demand fluctuations.
4 Deploy Information Technology For Long Term Benefits
Like many other industries, the freight broking industry is quickly moving toward a digitized business model. Every freight broker needs to extract the highest gross margin between selling transportation and buying transportation. Thus, it is vital to invest in technology and freight data that helps you understand real-time load demand and trucking capacity in individual freight markets.
The use of software tools designed to give you business analytics and make managing financials, communication, and marketing easier can leave more time and energy for exploring more growth opportunities. Instead of being concerned about the investment of new technology or a steep learning curve, look forward to adding customized digital tools to fit your business model and needs over time.
Real-time and trustworthy information on supplier and carrier activity is essential to be a profitable freight broker. This is another aspect where an outsourcing partner can get you reports and business intelligence that can be vital for decision-making and business growth.
Way Forward
Even though the freight brokerage industry is very competitive now, there is tremendous room to grow. If you can invest some time and resources in some of the key factors listed in this article, you should start seeing excellent results in your business pretty soon.
Implement these ideas and see your freight brokerage business take a massive leap. For example, instead of building your in-house sales and marketing team, you can easily hire freight agents from platforms like Freight BnB to eliminate your fixed cost on salaries and enjoy much higher margins.
To know more about how Freight BnB can help you grow your business, call +1 (779 ) 256-7779 or write to us grow@freightbnb.com for any queries today!
