One way is to work directly with carriers to negotiate prices for transportation. The carrier will then be responsible for finding its own customers and delivering the product to the destinations in the manner and time agreed upon.
Another option is to partner with a middle man such as a certified transportation broker. These intermediaries bridge the gap between a shipper and a carrier, facilitating all the communication and details of the contract.
There are many reasons why both carriers and shippers might want to use a certified transportation broker, which we'll dive into more below.
What is a Certified Broker?
A certified transportation broker, or CTB, is a third-party company that serves as an intermediary between a shipper and a carrier. They are responsible for handling all the communication and details of the project, leaving the shipper and the carrier to focus on what they do best.
Many shippers like to work with a CTB because it provides them with a single contact point for the entirety of the shipment. Shippers in this arrangement don't have to negotiate with any carrier, work to plan the routes or even track their own freight.
What Does a Transport Broker Do?
On the carrier side, there are benefits to working with a CTB as well. For one, the transport broker will work to optimize the delivery routes. This removes a lot of work and potential headaches that mapping out unfamiliar routes will take.
In addition, CBTs are skilled at reducing "dead-head miles," which allows carriers to actually increase the amount they earn from jobs in much less time. The CTB provides a lot of benefits to the carriers, as a lot of duties come off their plate, allowing them to just handle the delivery of products from Point A to Point Z.
What is CTB Certification?
Companies can earn a Certified Transportation Broker certificate that rubber stamps the fact that they are a trustworthy company in the industry.
Companies that complete CTB certification are able to show both their potential shippers and potential carriers that they are on the cutting edge of the industry.
Companies with CTB certification are able to separate themselves from their competition, as completion of the program shows customers they are very knowledgeable, professional and committed to doing the job well.
Many transportation brokers desire this certification, as it allows them to market themselves in a better light to potential customers.
Can a Trucking Company Broker Loads?
Only companies that have the CTB certification are able to broker loads between a shipper and a carrier. This is a specific license that companies must first acquire before they are able to take on this work.
Without the CTB certification, a trucking company is not allowed to broker its own loads.
What's the Difference Between a Dispatcher and a Broker?
In many ways, a broker may sound like a dispatcher. After all, they are responsible for communicating with the carriers while a load is being delivered, and they help with various issues and problems while drivers are on the road.
However, there is one major difference between a dispatcher and a broker: A broker works for both the shipper and the carrier, while the dispatcher works just for the carrier usually.
Dispatchers will represent carriers when freight prices are being negotiated. They may never end up dealing with the shippers directly, since they are the official representative of the carrier.
In order to be able to deal with the shipper, too, a dispatcher must have the authority to broker a deal. This is where the CBT certification comes into play.
Which is Better: Freight Broker or Dispatcher?
Trucking companies may think that having a dispatcher working directly for them would be the preferable option. After all, this gives them a dedicated person/company who has just their interests in mind.
However, the downside is that, unlike a broker, a dispatcher isn't able to negotiate a fair deal for all sides. Since they don't communicate with shippers at all, they aren't able to provide solid information to carriers on what the shipper once and expects.
This open line of communication both ways provides a lot of value not just to shippers, but to carriers, too. This is one of the main reasons why freight brokers are often preferred to dispatchers.
How Do Freight Brokers Find Carriers?
While there are many different ways to find carriers, freight brokers will often use load boards to connect a shipper with a carrier. These load boards are essentially open listings that the entire trucking industry uses to find loads and connect a need with someone who can fulfill it.
Shippers are able to post their load and specific requirements on the load board, and then freight brokers can use that information to connect the shipper with a carrier that can handle the load.
CTBs are well-versed in these load boards, and use them to find the best loads for carriers to handle.
Are Freight Brokers in Demand?
As the global supply chain continues to expand, it's expected that freight brokers will continue to be in high demand. One of the biggest challenges the world is continuing to face is the tie-ups in the supply chain.
There are many reasons that this happened -- including the COVID-19 pandemic -- but bottlenecks are also exacerbated by inefficient routes and shipping lines.
Freight brokers can help to ease these bottlenecks by creating efficient routes and connecting the right carriers with the shippers for which they are good fits. As such, it's expected that freight brokers will play a vital role in the global supply chain over the next few years, helping to bring efficiency to the shipping industry.