Truckstop Partner Marketplace: The Importance of Carrier Relationships
In a tight spot market, relationships play an important role in the success of the small independent freight business, whether you’re a carrier, broker, or shipper.
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Why Are Carrier Relationships Important?
| Tyler Roatch, Parade
February 10, 2023
While great carrier relationships can and do happen organically, that tends to be the exception rather than the norm. Getting away from the one-and-done carriers is a common goal for brokerages, but how do you turn those one-and-dones into go-to relationships you can rely on to cover loads? Is building your network and nurturing carrier loyalty worth the time and trouble?
4 Benefits of Strong Carrier Relationships for 3PLs, Brokers, and Shippers
The power of scale equals more capacity and better rates.
Great relationships oftentimes mean high carrier re-use. When you have a great relationship with a carrier, you can turn to them again and again for specific lanes and loads. When a broker is using more of a carrier’s capacity, especially if that broker is using that capacity regularly, that carrier can afford to allocate more capacity to that broker.
Because that carrier knows the broker will book a significant portion of their capacity, they might be able to offer slightly better rates.
Along with getting better rates, brokers, 3PLs, and shippers can turn to carriers they already have relationships with instead of spending time and money onboarding new hires.
Room to negotiate
When a carrier has the assurance their trucks will be booked, it gives them a little wiggle room on price. A carrier might be more inclined to give a little if they know the broker is going to book out several other trucks that week and help make up for a rate that’s less than ideal.
This only works when brokers or 3PLs are using this wiggle room wisely and not trying to lowball a carrier simply because the broker knows they account for a lot of the carrier’s business. When brokers use the volume of trucks they’re booking to take advantage of a carrier, it’s a recipe for a business divorce.
Improved level of service
I think we can all agree that we do a better job when we know what is expected of us, when we really understand the nuances of a task we’re being asked to complete. When brokers and carriers work together frequently to service the same shippers, everyone goes in knowing what they need to know for a successful shipment. The carrier is aware of the hours and policies of the shipper and can relay those to the driver. The broker knows what information this carrier needs and the ins and outs of their equipment’s capabilities. Carriers who know they’re going to get repeat business also have a great incentive to do their best work.
This doesn’t mean that a one-and-done carrier isn’t trying to do a great job of providing excellent service to the shipper. It simply means that a carrier has a better chance to provide excellent service if they’ve dealt with the shipper and/or broker before.
More positive experiences
When brokers and carriers have a good working rhythm going, everyone is going to have a more positive experience. There are fewer urgent phone calls to field, fewer miscommunications, and fewer late or delayed shipments. Conversations can shift to be more relationship-building and around business goals and shared successes.
What do carriers get out of good relationships?
When a carrier is working with the same broker or shipper frequently and they’ve proven they do a good job, that carrier is likely to receive more of that broker or shipper’s volume. This is especially helpful when there’s plenty of capacity available and it’s hard to find loads.
Room to negotiate
Carriers also get to cash in on the whole ‘room to negotiate’ thing in carrier relationships. When a carrier just can’t bend quite as far as a broker is asking on price, they’re more likely to still win the load if they have a relationship with the broker. Brokers are often willing to flex a little to work with a carrier they know and trust.
Continuity for reps and drivers alike
When carrier reps work with brokers day in and day out, there’s a sense of continuity. They’re talking to the same people, carrying out the same processes, and working towards the same goals each day.
Drivers get some continuity as well. When a carrier is working with the same broker, 3PL, or shipper regularly, pickup and delivery locations are likely to stay the same.
How to Start Building Stronger Carrier Relationships
Here are a few tips for building stronger carrier relationships.
Get to know your carriers.
Carrier relationships aren’t that different from real-life relationships. When you want to build a relationship with someone in real life, you ask them questions about themselves to get to know them. You learn what they like and dislike, what their hopes and goals are. You learn about their experiences and expectations.
Building a great carrier relationship starts the same way. Ask about their lane preferences, their equipment, and the types of loads they like and dislike. Learn about their business goals and talk about ways you can support them in those goals. Get to know the reps you speak with often.
Relationships are give and take. To reap the rewards of a relationship, sometimes we’ve got to be the one to bend. Carrier relationships are no different.
If a carrier who has always given you fair rates and done good work for you says they need a little more to make a load work, it might be worth it to bend a little. Be flexible with carriers you’ve established relationships with; it gives them a good reason to return the favor.
Use carriers you have relationships when possible.
In relationships between brokers and carriers, loads are the lynchpin that brings the two parties together. When you’ve got a load that fits a relationship carrier’s parameters, make sure you reach out to them first to see if they have available capacity, even if it’s not a load they’ve previously taken for you. Make carrier re-use a priority, especially with carriers with whom you wish to build stronger relationships.
This can be difficult if you don’t have a system in place to facilitate carrier re-use. Particularly when brokerages handle a high volume of loads, remembering which carriers like which loads is tough, and it’s almost impossible for every rep at a brokerage to have all the knowledge they need to effectively re-use carriers.
Use the right tools to manage relationships effectively.
Once upon a time, the telephone was the only technology brokers needed to build carrier relationships, but the industry operates on a different scale now. Competition and volume have drastically increased, so brokers are turning to freight tech to help them achieve their business goals.
Load board technology helps brokers get their loads in front of a new audience and facilitates onboarding and booking to smooth the way for budding relationships. They’re not just for finding one-and-done carriers!
Track-and-trace tech helps brokers and carriers communicate effectively about loads, saving both parties time and anxiety.
Capacity management tools like Parade help brokers keep track of their carriers’ preferences and communicate those preferences to the entire team, enable simple carrier reuse, and offer up digital booking and quoting tools to give carriers the chance to book how they want to book.
Strategize Your Way to Stronger Carrier Relationships.
Modern brokerages and 3PLs know that strong carrier relationships help them be more competitive, though many still struggle to make them happen, relying on reps to build relationships. Relationship- building is a slow burn, though. It doesn’t magically improve margins or remove the need for one-and-done carriers overnight. Instead of waiting for connections to “just happen,” brokerages should be including relationship-building in their strategy, giving reps the time and tools they need to make those relationships happen so all parties involved can benefit.
The Truckstop Partner Blog occasionally publishes articles contributed by Truckstop Partners as a service to our community. The views and opinions expressed in these articles are solely those of the contributor. Truckstop is not responsible for and does not verify the contents of the information or claims contained in partner supplied blogs.
Conquering the Economics of Freight Management with Digital Booking (Webinar)
In Q4 2022, Parade’s Lindsay Watt, FreightWaves’ Kevin Hill, and Truckstop’s Brent Hutto discussed the economics of today’s freight brokers. The economics is volatile and evolving, and success depends on giving preferred carriers quick and easy access to the right loads for them.
Review the fireside chat these leaders had as they delve into ways leading brokers drive 10-35% digital bookings by matching capacity, personalizing carrier interactions, and building stronger carrier relationships.
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