How to break up with your broker

As we enter into a new year, we are seeing more and more companies with goods to ship ready to say “out with the old and in with the new”. The introduction of new technology in the freight industry has now provided shipping companies with more choices and thereby more freedom. Changing an age old process however and growing out a new way of doing business within your company can be a tough move to make. The “new” not only needs to make better business sense but given the current freight environment, it must also show significant cost savings, a strong level of sustainability and be easy to implement.

Where does all of this “new” leave the traditional freight broker? Is this type of a relationship still a viable, cost-effective or even necessary one to keep? As in any good relationship, you must first start with a solid foundation and then begin building based on mutual benefit. Here are a few tips to help ensure your broker relationship is on the right path:

1. Have you established common trust and honesty? Running a business is hard regardless of its size. You need to know that you’re working with someone you can trust to bring your company the best rates, with dependability and is honest enough to share true market data helping you best strategize your freight volume and spend for the future.

Best Break-Up Line: “This just isn't for me. Nothing personal. I just want to be able to tell people that I don’t use a broker.”

2. Is he or she a good teammate? In order to truly help you in an ongoing fashion, your broker needs to not only understand the freight you need to move but also how your company operates to help them best understand your pain points, to communicate schedules, detect patterns and help handle potential carrier issues as they arise.

Best Break-Up Line: “I’m not saying it’s you, but I know it’s not me…”

3. Do you have a good level of transparency? Your company is going to need it as capacity continues to tighten. The days of hidden margins are a thing of the past for any company looking to control their freight spend.

Best Break-Up Line: “I'm sorry, but there just isn't room in my life right now for both you and Uncle Sam”

4. Are you getting value or perks? Even the best of us can be lured into a relationship by offering free vacations or other fringe benefits. This however is an all too common mistake companies make when dealing with freight brokers. A business and its employees must be making business decisions, not buddy decisions.

Best Break-Up Line: “I don’t have any freight right now but I am still interested in the free cruise.” (trust me…they’ll break up with you.)

If you find that your current relationships with your freight brokers only embody some of these four qualities or even worse, none, then I’m sorry to say but it’s time to break up with your broker.

In the words of Paul Simon, “The problem is all inside your head she said to me. The answer is easy if you take it logically. I'd like to help you in your struggle to be free. There must be fifty ways to leave your lover broker"

I’m clearly having a bit of fun at the broker’s expense here but in reality, the only brokerages that will be able to maintain these qualities are ones that employ a business model of high volume and low margins rather than today’s model of low volume and high profit margins. Companies also need a way to engage carrier competition in order to realize continuous cost savings. Continuing to leveraging one broker against another in order to get the best pricing is not only an exhausting communications nightmare but it is also a game that will yield only marginal savings at best.

We have been witness to many companies breaking up with their freight brokers and understand that it is human to want to avoid confrontation and sales pressure. Only you can decide when an “out with the old and in with the new” strategy will work for your company but unless change is on the horizon in the traditional freight brokering industry, I say…

“You just slip out the back, Jack, Make a new plan, Stan, You don't need to be Coy, Roy. Just get yourself free. Hop on the bus, Gus. You don't need to discuss much. Just drop off the key, Lee. And get yourself free.”

Photos Courtesy: istockphoto.com