Although carriers can collaborate directly with shippers, they seldom do. Finding clients is time- and money-consuming and particularly challenging for startups. As for the shippers, they don’t want to be concerned with selecting a carrier that fits their financial and schedule requirements, confirming its dependability, and maintaining contact until the items arrive at the recipient. Hence both parties favor using a freight broker as a middleman.
The US Freight Brokerage Market size was valued at USD 1.164 Bn in 2020 and is projected to reach USD 13.78 Bn by 2028, growing at a CAGR of 36.2% from 2021 to 2028.
Freight brokers must define the most efficient transport option that aids their business while fulfilling customer requirements but doing this involves a lot of challenges.
Challenges faced by freight brokers
Quotes Collection: Rates are gathered by brokers from various sources. Additionally, requesting quotations individually from each different carrier takes time.
Balancing between spot and contracted rates: Contractual rates are agreed-upon set rates for a specific channel and cargo volume. Spot prices are negotiated lane-by-lane and load-by-load and are subject to wide variations. Knowing when to review contracts, switch to a different bid for a specific lane, stop dealing with a carrier altogether and switch to spot rates because they are more desirable is far from guaranteed.
Managing carriers: Brokers that work with carriers under long-term contracts need to be aware of when the contracts expire and need to be revised.
Delivery Supervision: Brokers resolve any problems that may arise on the carrier’s end with timing, damages, or pricing while the shipment is being delivered. They must also update shippers on the status of deliveries and the location of merchandise.
Overcoming challenges using freight broker software
A small number of loads can be handled manually. However, as the network expands, brokers will have to put the first profit back into technology to grow their company. The freight broker software will standardize the shipping process, enhance the brokerage service offering generally, and ultimately improve how operations are organized. The use case has increased so much that the global freight broker software market is projected to reach USD 29.85 Bn by 2026, growing at a CAGR of 7.9% from 2019 to 2026.
A freight broker software is a modular platform that usually comprises five key modules:
- The load management module accepts loads from shippers and posts them to load boards.
- Rate engine to source and assign carriers with the most reasonable rates.
- A shipment tracking module to track shipments as real-time visibility for all the parties involved helps brokers decrease disruptions.
- An Invoicing module to manage customers’ invoices. The billing tool uploads all the required data and generates invoices when synchronized with the load page.
- Communication portal to keep stakeholders and customers informed and pleased.
If you have a freight brokerage business and are contemplating buying software, start with a freight broker software that best fits your business needs and requirements. It would be best if you explored an easy-to-use, customizable freight broker software solution, which is also highly scalable as and when your business grows. Not to mention, such SaaS solutions are the easiest to deploy, hardly require any training to start using, and are highly intuitive. These affordable solutions make it easier for medium and smaller companies to optimize their supply chain efficiencies cost-effectively.
Feel free to fix a free walkthrough demo of how GoComet can help you drive double-digit cost savings in your supply chain while eliminating all the pain points you may currently face due to the lack of automation. Get the best freight broker software solution now!