Expert Advice: 8 Tips for Success From Freight Brokerage Owners

As a freight broker, your most important working relationship will be with the freight carriers you hire to move goods for your clients. Find out how to select the best carriers.


The following excerpt is from The Staff of Entrepreneur Media, Inc. and Jason R. Rich's book Start Your Own Freigth Brokerage Business, 5th Edition. Buy it now from Amazon | Barnes & Noble | IndieBound

Nothing teaches as well as the voice of experience. So we asked established freight brokers what has contributed most to their success and what they think causes companies to fail. Here's what they told us:

1. Use Advertising and Marketing Techniques that Work

Track your marketing efforts so you can concentrate on the techniques that work and eliminate the ones that don't.

Smyrna, Tennessee, freight broker Cathy Davis said small giveaway items, such as pens, note pads, caps and T-shirts, work well. Company newsletters with personal and industry information also get a good response. She said donations to fundraising events may be helpful (depending on the event and the degree to which it's promoted), but the impact of website sponsorships is questionable. She recommended developing a three-panel printed brochure that's easy to include with letters, invoices and checks.

Chuck Andrews, an Indianapolis-based freight broker, builds name recognition by placing periodic ads in association newsletters as well as in annual association and industry directories.

2. Prepare for the Future

It's understandable that if you're just getting started, that's your primary focus, but you also need to think about the future. Develop a succession plan that you review and revise annually. Know how leadership will be transferred when it becomes necessary—either through voluntary or involuntary departures.

3. Don't Reinvent the Wheel

Look around for good ideas and good products that people are already using that you can incorporate into your operation. Everything you do doesn't have to be original; get ideas from other brokers, carriers, shippers and even totally unrelated businesses.

Bloomingdale, Illinois, freight broker Ron Williamson learned this the hard way when he hired someone to develop a proprietary computer system. "That was a mistake because it wasn't a totally integrated system that would save us time and make us more efficient," he recalls. "Later on, we found a packaged program that had all the bells and whistles we needed."

4. Get Rid of Carriers That Don't Perform

Every trucking company will have an occasional service problem, but when the service failures become chronic, drop the carrier from your roster. "You won't keep your customers very long if you're having constant problems with your carriers," says Ron Williamson. Of course, he acknowledges that in the beginning, you probably won't know who all the good and bad carriers are. While it's one thing to be understanding and give a carrier a second chance, you need to draw the line before the problems affect your own business.

5. Maintain a Broad and Diverse Customer Base

You need enough customers so that losing one—or even several—isn't devastating. One of the biggest mistakes Davis ever made when she ran her freight brokerage was allowing one customer to control too much of her company's revenue. When that customer pulled away with very little notice, she was left scrambling to replace that business.

6. Get in the Spotlight

Because the freight industry is such a strongly relationship- and reputation-based business, it helps to put yourself in the public eye in a positive way as often as you can. Davis saw a favorable impact on her business from being the recipient of awards and by getting bylined articles published in trade publications.

7. Be Open to Evolution

Though a freight brokerage is extremely lucrative on its own, it's also a business that can lead to the development of other transportation-related operations, from consulting to buying trucks and being a carrier. Cherry Hill, New Jersey, freight broker Bill Tucker, for example, offers a wide range of logistics services.

Andrews started as a broker, then created his own separate trucking company to handle moves where the carriers he was using were short on equipment. Ron Williamson also started as a broker and has since created two trucking operations.

8. Protect Your Reputation

"Focus on building the highest-quality reputation you possibly can," advises Tucker. "When a shortcut presents itself but it's a little on the shady side, have the fortitude to pass it by, no matter how big the opportunity may seem. There are so many people in this industry who need good, solid, honest, reputable service—and long term, that's where the big money is. You survive, and you won't have a lot of doors closing to you because some bad story got out."

Tucker compares the industry to a small village. "Everybody knows everybody else's business. It's amazing how fast word travels. Nothing will put you out of business or limit your success faster than the story of one bad transaction or one nasty court loss because of bad practices getting out into the marketplace. You're going to have to sweat for a while, pull your belt in once in a while, and [endure] some tough times. But do it the right way every time, don't take any shortcuts, provide high-quality service and maintain your integrity, and you'll always have customers willing to pay a fair price and good carriers that want to work with you."

The Staff of Entrepreneur Media, Inc.

Entrepreneur Staff

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