Freight procurement has been the most volatile aspect of the supply chain in recent years. And that’s due in no small part to the massive disruptions that have plagued the industry. Meanwhile, the threat of increased risks continues to drive more shippers to leverage brokerage partnership opportunities.
As further noted by Supply Chain Digital, “Recent trends in federal and state court decisions demonstrate that shippers and brokers will continue to face increased liability (including multi-million dollar legal judgments) caused by the unfortunate – and often negligent – actions of contracted carriers. Courts are increasingly holding shippers liable under theories of vicarious liability; negligent selection or entrustment; as well as the contractual assumption of risk.” With the right freight brokerage partnership and strategy for freight procurement, a company can more confidently and proactively work to reduce freight costs, improve their freight network, and collaborate strategically to improve the overall supply chain. But freight procurement can be quite confusing. The strategy used by a new and upcoming freight brokerage may be radically different from that of a more traditional brokerage. Brokers by definition are able to help shippers move freight more consistently.
Regardless, those with a broader understanding of the supply chain and what it takes to move freight in this manner are best poised to help shippers achieve stability. Brokers with warehouses, trucks, and experience can become an extension of the shipper, managing yards and procuring freight on behalf of many shippers. In this article, the PortCity team walks shippers through five reasons to outsource freight procurement to a freight broker.
Outsourcing Offers Freight Procurement Efficiency
When procuring freight capacity, the company needs to have connections and a host of other things — ranging from proper documentation to licensure — to establish a solid business. A freight brokerage helps establish those connections for both the shipper and the carrier. The brokerage has the knowledge and resources to streamline freight procurement faster and more efficiently. In addition, outsourcing to a brokerage firm can make complicated chores, such as billing, a no-brainer. No company can say no to efficiency.
Increased Brokerage Relationships Increase Competition Among Carriers
Carriers have a substantial burden in today’s shipping world, and as times change, competition among carriers affects freight procurement. But competition is never a bad thing if used right. Increased competition drives down costs for freight brokers, which then gets passed to the shippers. More competition means more savings for the transportation companies because there is more demand as well.
Outsourcing Lessens the Burden of Vetting Carriers
When obtaining carriers for freight, it can be tough to downright impossible to get anyone with readily available capacity. When outsourcing freight procurement, the brokerage has a vast network of pre-vetted and qualified carriers. And rather than vetting more carriers in-house, shippers can outsource with the confidence that carriers will hold up their end of the bargain. Outsourcing these fundamentals adds a gain to your carrier network that helps the company when in stable or disruptive peak shipping seasons.
Brokerages Offer a Scalable Solution to Freight Procurement
With a brokerage, freight procurement becomes a one-stop-shop and allows for better management so that the process doesn’t get “out of hand.” Also, if there ever needs to be a change in volume or capacity commitments associated with freight procurement, the brokerage can set it up for the company. Anything that needs to be changed in the background, the brokerage firm can handle it so long as it treats your company as it treats theirs. This aspect of brokerage-provided logistics management solutions is the company’s greatest asset.
Outsourcing Also Consolidates Freight Management
When simplifying an operation, a brokerage is what is needed. A brokerage can consolidate all of your e-commerce shipping or freight management needs, such as billing, zone-skipping options, drayage service, and more. A broker can easily make an operation flow smoothly in the background while the transportation company takes care of the customers and its reputation out front. A company values its customers and wants to treat them well. Why not go with a truck brokerage a company can trust and value as much as their clients?
Increase Throughput by Outsourcing Freight Procurement to the Right Brokerage: PortCity
Partnering with the right brokerage firm, a company can transition and operate smoothly through the transportation world. A brokerage can help any transportation company or shipper sort through the chaos of the modern world and find more carriers and capacity despite disruption. Learn how to get started today by contacting PortCity.