Do Brokers really give the best price?

Many companies decide to use brokers for a variety of reasons. Some of the reasons may include:

One stop shop
1000s of carriers to choose from

The Shipper gets their lower discount.

We are using 1995 pricing.
No negotiating of rates with the carriers
Auditing of freight bills
Lack of a knowledgeable trained staff

But some of the hidden aspects of the brokers can cost more than the service.

One Stop Shop

"I only have to deal with one person when I have an issue." This can be true, but when you only speak to a certain individual within the brokerage, what is the cost.

We use 1000's of carriers to choose from.

Many brokers use the advertising slogan that they have 1000's of carriers in their system. The problem many shippers incur is what is the quality of those carriers, so they remain with the carreirs they have chosen.

You get their lower discount.

Many times only a select number of the carriers are offered. These are generally the best discount for the broker, not the shipper. Some of the concerns for the shipper should be claims; could I get a better or same discount level on my own? One of the biggest issues is will you ever receive another discount increase. The broker will use the excuse that prices haven’t gone up. The brokers are then making more money on each load you ship through them.

We use 1995 pricing.

This is a common selling tactic used by many brokers and depending on the discount may or may not save you money versus current base rates. In addition, it over looks economies of a scale. If a large retailer opens a distribution warehouse in an area, the carriers may provide extremely low pricing to that area to get trucks into the distribution center. Therefore if the center was built after 1995, you will lose these savings.

No negotiating of rates with carriers.

Although you are not negotiating directly with the carriers, the broker is, and it is not so much on your behalf as that of the broker. Many times the carrier representative will provide competitive bidding for your business depending on your volume. If you volume is greater than $500,000, you should be doing your own bidding.

Auditing of Freight Bills

In a recent case study, N2TMS went into a client who was doing approximately $1.5MM in LTL. They were using a broker. They were paying $80,000 for their auditing fees although this information was actually a hiddenline item in their statement. Although the audit caught some items, the staff of the shipper was still performing an internal audit. Therefore auditing of their shipping was being paid for twice.

Lack of a Knowledgeable Staff

Staff employees do not need to be the traffic manager having an extensive knowledge of all aspects of freight.

So Is there a solution?

Check out N2TMS and see why our solution could save you money and provide you with a better solution than brokers. We use the latest technology to let you run your own freight for a modest subscription fee, not per load. You choose 6-8 carriers, you control your negotiations making the carriers compete for your business.

Auditing is not a problem, N2TMS allows you online auditing of your freight bills.

Some shippers have saved as much as 30% from their use of brokers using current base rates.

Training of your staff takes less than a day to implement and techincal expertise is alaways available.