Less than truckload freight (LTL) is a good way for carriers to fill trailers with multiple stops in a single area that make their loads more worthwhile and profitable. However, finding these loads takes a certain amount of work, and doing it quickly and efficiently is vital to a carrier’s success.
That is where an LTL freight broker comes in. They use load boards and their relationships with shippers to connect carriers with the right load in the right area at the right time. This ability to bridge both shippers’ and carriers’ needs is one of the things that makes the service they provide so valuable.
What is an LTL freight broker, and what are the benefits of using one?
What is an LTL freight broker?
LTL freight brokers are intermediaries that fill a specific role: matching freight shippers and their goods with freight carriers who have the right capacity, lanes or routes, and timetable to handle the shipment efficiently.
Usually, this kind of broker has many contacts in the industry and relationships with various LTL carriers. They often have an online system for shippers that simplifies the freight booking process. Likewise, because they deal with a large number of shippers with varying load sizes, they also help carriers find LTL loads to fill their trailers.
8 benefits of using an LTL freight broker
The systems and relationships you develop as a broker benefit both carriers and shippers. Here are some of the biggest reasons carriers and shippers might use an LTL freight broker.
1. LTL Brokers obtain volume discounts.
First, because LTL freight brokers deal with many carriers, they can provide shippers with volume discounts the freight originator would not be able to negotiate on their own. It takes volume to reach a point where a carrier sees the advantage of offering a discount, and brokers deal with significant freight volume.
Because brokers do the heavy lifting in keeping trucks full and moving, carriers have an incentive to work with them and honor those discounts. The carrier spends less time looking for loads and more time working, making their business more profitable. The broker plays a key role in providing volume discounts to benefit both shippers and carriers.
2. LTL brokers shop the best rates.
Most LTL freight brokers get at least part of their income from commissions. So it’s in their best interest to negotiate the best rates for both shippers and carriers. Shippers get better rates due to the volume discounts mentioned above and the negotiating power they have.
However, a freight broker must also balance the rates they offer shippers so that carriers can still do business with them and make a profit. Shippers and carriers can both count on better rates than they could negotiate on their own. For the broker, the better their rates, the more volume they will attract, and the more money they make in the long run.
3. Brokers vet both carriers and shippers.
The beauty of the LTL broker job is the relationships they develop with both shippers and carriers. They know which carriers are best for different load types. They also know which shippers pay promptly and well, offer flexible terms for drivers, and will work best within a certain region or lane.
With a good LTL broker, shippers are assured reliable, trustworthy carriers. Those carriers can count on shippers to be fair, pay invoices on time, and prioritize the ones they have the best relationships with.
4. LTL brokers help with classifying freight.
It’s a common mistake for shippers to misclassify their freight during the freight procurement process. This can come back to bite them later on. Properly classifying is complex and time-consuming. It can be challenging for smaller shippers to learn and fully understand freight classifications, which often causes issues later in the shipping process. An LTL freight broker can help.
This also benefits carriers. Knowing the freight they carry has been classified correctly ensures they can handle it accordingly. The broker can then ensure the shipment is handled correctly and will be less likely to be delayed.
5. LTL brokers make sure all the paperwork is in order.
An LTL broker does a lot more than match-up shippers and carriers. Through their relationship with both parties and their knowledge of the industry, they make sure that freight is not only classified properly but that any required documentation is in order and complete.
This can save the carrier time at pickups and prevent delays due to regulatory issues, allowing the shipment to be delivered smoothly.
6. Brokers can facilitate other services shippers might need.
While most LTL freight brokers don’t take possession of cargo the way a freight consolidator would, they can help negotiate other services the shipper might need, from temporary warehouse storage to cross-docking, refrigerated LTL shipping, and more. This makes LTL freight brokers an even more valuable partner.
7. LTL brokers assist with freight claims.
What if something goes wrong during the shipping process? An LTL freight broker can help with claims, as they often have arranged the shipping from end-to-end. Because of their relationships and connections, brokers can sometimes talk to insurance companies and other authorities to help process claims as quickly as possible.
8. LTL brokers help personalize the shipping industry.
Finally, and perhaps most importantly, LTL brokers bring a personal touch to what can be a very impersonal business. Working relationships are their most important assets. These connections allow them to facilitate shipping in various circumstances, find carriers who can respond quickly, and help the process go smoothly.
For example, if a shipper has an urgent order and a carrier has a truck nearby, the broker will often know if the freight is a good fit. They can reach out directly to ask questions before making a blind connection. This means the shipper is far more likely to get what they need promptly with a reliable carrier. The carrier is assured the shipper is legitimate and reliable because of their relationship with the broker.
How LTL brokers use load boards to secure the best freight rates.
So how does all this work? Brokers often use load boards like Truckstop.com to connect shippers with the right carriers.
Here’s how the process might work from start to finish:
- A shipper contacts a broker with a shipment, including weight and density information. They determine how much capacity a carrier will need to handle the load.
- The LTL broker performs a truck and lane search to determine what carrier has the right amount of capacity and enough time in their schedule to ensure the cargo can be delivered on time.
- Decision tools from Truckstop.com show the ratio of freight to trucks in a given lane, revealing supply and demand. This helps brokers know where to start with rate negotiations.
- The broker can then look at the carrier performance rating: How are they rated? Do they have complaints or compliments from clients? Do they run on time? What about inspections and their history? The broker can use this information to determine if the carrier is reliable and a good fit for the shipper.
- The Truckstop.com Rate Estimate tool shows current spot rates, rate trends, and helps brokers know whether rates are trending up or down.
- The broker then books their chosen carrier to fulfill the needs of the shipper.
This is just one example of how the shipping process can work and how an LTL broker can quickly and accurately connect the right shipper with the right carrier.
Are you a broker looking to develop a connection with carriers and expand your network? Are you looking for a simple way to connect shippers with the right carriers? The Truckstop.com Load Board is a great place to do just that. To see how it works, request a free demo.