As a broker you should have 3 primary types of insurance to protect yourself. After all, if something goes wrong, you don't want to be held holding the bag. Cargo Insurance: If the shipment is lost or damaged, and the carrier's insurance company refuses to pay, then it pays the shipper. Contingent Cargo Coverage: This second level of insurance protects you in case the carrier goes out of business, or their insurance company becomes insolvent. If this happened and you didn't have contingent cargo coverage, guess who has to pay? You. Liability/ Errors and Omissions Insurance: Despite your best efforts, it's still possible to make mistakes. This protects you and your business in the event that YOU screw up.
First of all, admit that you don't know everything and assume you don't know enough. For instance, did you know it's illegal to inter-mingle your freight brokerage and trucking company? The fact is, the most successful business leaders in the world are constantly seeking information and learning more about their industry and business in general.
Bill Gates, the richest man in the world and founder of Microsoft is a voracious reader, always improving upon his ability to run his corporation. When asked what kind of superpower he would like to have, he replied "the power to read super fast." He understands the value of knowledge. Unfortunately, four out of five new businesses fail in the first two years. Why? The answer is simple. They don't know how to run a successful business. There are countless stories of people who had fantastic products or services that failed, simply because they didn't understand the business side of things. You need to understand how to manage money, manage people, keep track of financial information, and make smart business decisions. The right freight broker software will greatly help you in this area, but you will still need to seek out more information. Read current books about running your own business. Study the industry. Take a freight broker training class from a reputable school. Read transportation-related news, and do whatever you can to understand YOUR industry. Self education is probably the most important key to success.
Keep in mind that everyone you deal with is working to create profit in their businesses. Your need to negotiate a good deal for yourself, but also make sure it is a good price for the shipper and for the carrier. If the carrier realizes that he isn't making any profit off of a load, he may not want to work with you in the future. Similarly, if you rake the shipper over the coals just because he's desperate, he too will do business elsewhere next time when you might need him. By keeping track of your profit margins, along with your days-in-collection on the receivables from shippers, you'll be able to know what deals you can and can't afford to make.
Sometimes when a shipper requests a quote, he may just be fishing around to figure out what he should charge for that load. Or sometimes he may just put your quote in a pile of other quotes, and you never hear from him again.
So here are some suggestions to avoid wasting time putting together quotes that never go anywhere.
Before quoting, ask these questions:
1.) What type of equipment do they need?
2.) How often are loads available (every day, every week, every month?)
3.) When will they be deciding who to give the load to?
And if they tell you your quote is too high:
4.) Ask what they're willing to pay. If it sounds reasonable, and you can still profit from it, take the load. Then go back to the carrier and see if they are willing to flex on their end too. This way you and the carrier absorb the lower rate together and everyone still profits.
This is a big one. As a freight broker, a big part of your job is handling paperwork. If a lot of it seems like the same thing over and over again, that's because it is. So the faster you can get paperwork done, the more loads you can move, and the more money you can make.
The solution is to automate. Good freight brokering software takes care of many routine tasks, thereby helping you get a lot more done in less time.
Your best bet is to find web-based software as opposed to software that you actually install your computer. Internet or "web-based software" is a new concept developed in the past few years. As the moniker implies, you access your software program through the internet. So instead of being installed on your computer, the software is installed on a large, secure server located in a secure location, and your information is automatically backed-up every night.
Benefits of web-based software over standard software include:
1) If your computer dies, you won't lose any important data;
2) You don't have to buy any expensive software upgrades – ever;
3) You can do business from anywhere in the world; you only need an internet connection.
Probably the most widely-known and fastest growing of the web-based freight broker software programs is LoadPilot (www.loadpilot.com.) Special features of this program include the ability to send and receive faxes right from the program, posting to the most popular load boards with the click of a button, 140,000 carrier database, online video tutorials, automated invoicing, automated rate confirmations, etc. But regardless of the program you choose to run, make sure it also gives you the ability to manage your agents as your business grows.
Here's to your exciting and prosperous future!
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