Finding the Best Fit – Freight Brokers, Load Boards or Freight Marketplaces

There’s quite a bit of information out there about freight brokers, load boards and freight marketplaces, so deciding which of these models fits your operation best can be a challenge. If you aren’t sure what the differences are between the three, make sure you read our previous post which explains what role each model plays. When making this important decision, both shippers and truckers have a few things to consider:

  • Market Reach – How many shippers, loads and carriers are engaged with each model?

    1. Freight brokers tend to be on one end of the spectrum with a smaller network of carriers and shippers. While their networks tend to be relatively small, freight brokers build strong relationships over time with the shippers and carriers they work with.
    2. Load boards fall on the opposite end of the spectrum from brokers with large volumes of loads available and a large number of carriers looking at those loads. Load boards aggregate freight from many brokerages and shippers into one place and because there is little to no cost to access these load boards, there are often a very large number of participants involved.
    3. A freight marketplace is in a bit of a sweet spot since there are typically more loads available than a traditional broker, but fewer than a load board. The same tends to apply for the number of carriers engaged with a freight marketplace. As a relatively new model within an industry that tends to be slow to adopt new technologies, freight marketplaces will continue to grow in popularity but will likely remain smaller than load boards in coming years.
  • Flexibility – What impact do spikes in supply and demand have on shippers and carriers?

    1. A potential downside of freight brokers’ more limited capacity and load volumes s is the lack of flexibility. When unusual spikes in volume occur, freight brokers may find it difficult to scale and cover shippers’ loads at a moment’s notice. On the other hand, if there are fewer loads than usual, brokers may not have freight for drivers to haul. In an industry where margins are razor thin, this can be the start of more headaches and difficulties ahead.
    2. While high-volume load boards provide greater flexibility and more opportunities for shippers and carriers to connect, the flexibility may come at the price of building long-standing, reliable relationships with shippers and carriers that may be beneficial in times of market uncertainty.
    3. Again, freight marketplaces fall between two extremes with less risk than that associated with using a freight broker but easier access to vetted, consistent relationships than load boards. 
  • Resources & Level of Effort – What does each model require of shippers and carriers?

    1. In many ways, working through freight brokers requires the most resources. Limited market reach means they may not always have the capacity that’s needed and, as a result, shippers often need to work with multiple brokers at the same time. Matches between shipper and carrier are also time consuming since this is most often done manually through phone calls, e-mails and faxes.  Additionally, the settlement processes for the jobs are typically done through physical paperwork and traditional payment channels which require time and resources for everyone involved.
    2. Load boards require less effort and resource requirements than freight brokers to pair shippers and carriers. Aggregation of many loads from shippers and brokers translates to more load availability. Numerous carriers viewing the load boards mean the market reach is larger, which increases the likelihood that a load will fit well with available capacity. Matches are still negotiated manually like in the freight broker category which requires significant time and resources for both shippers and carriers.
    3. Freight marketplaces require the least amount of effort and resources among the three options. Shippers post loads as needed along with all the specifics a carrier would need to know to accept or pass on the job. When registering with the marketplace, carriers are fully vetted, capturing exact capacity configurations so only carriers with the right capacity are notified when a load is posted by a shipper. Once the carrier/shipper match is complete, the marketplace handles all documentation, paperwork and settlements making the entire process less resource intensive for everyone.
  • Time – How much time does it take shippers and carriers to get connected? Time is money and while this may be the easiest consideration, it is possibly the most important. Establishing the connection between shippers and carriers runs the full spectrum from manual to automated among these three models.

    1. A freight broker typically requires the most time as a result of limited market reach and a high level of effort/resources to ‘get the deal done’.
    2. A load board is faster than a brokerage because of larger market reach, but still requires the heavy lifting in the back office to handle all of the paperwork and settlements. Also, when services are free like so many load boards are, you’ll always need to consider quality on both ends. You’re also often left to negotiate with multiple parties and finalize “the deal” on your own, which takes time and may not necessarily be successful.
    3. A marketplace is the fastest and most “touchless” of the three models because it instantly and automatically presents shippers’ posted loads to vetted, qualified carriers.  Carriers with the available capacity can simply tap “accept” on a load that a shipper has posted, go get it, deliver it, capture documents electronically and get paid.  All of the back and forth discussions and exchange of paperwork is automated and touchless for both sides of the job.

Pointing to the strengths of a freight marketplace over other options seems obvious, doesn’t it? Bringing technology forward to address some limitations of traditional freight brokerage while also fostering the speed and ease of a marketplace certainly has its advantages. While the freight marketplace seems to be the best option for most loads when a marketplace is available, be sure to do your research. You’ll have the flexibility of a load board but will need to place your trust in the right marketplace to make sure they’re negotiating fairly on both the shipper and trucker end. Only then does a freight marketplace truly excel.

Questions about how Cargomatic can help you succeed? Connect with us today!

Freight Broker, Load Board and Freight Marketplace…Do You Know The Difference?

Freight Broker, Load Board and Freight Marketplace…Do You Know The Difference?

Terms like freight brokers, load boards and freight marketplaces might be ones you hear often in trucking but they’re often used interchangeably and many people aren’t clear on exactly what they mean or which one best fits their operation or needs. Each of these play an important role in transportation logistics, but they’re also three very different options shippers and carriers utilize to get the job done. Do you know the difference in order to know what works best for your business? This should help:

Level 1: Freight Brokers (The Original)

Freight brokers are essentially the middlemen between shippers and carriers. This can be either an individual or a company that acts as a transportation intermediary. Brokers are typically hired by shippers to find qualified drivers or carriers to haul loads to their final destination. Not only do brokers negotiate pricing with the carrier and arrange transportation for the load, but they also track the load, manage its timely delivery and keep the shipper updated on the load’s status. In order to make money, the shipper pays the broker a certain amount to ship the freight. The broker finds a qualified trucker who will move the load for the best price and is able to keep the difference as payment.

Level 2: Load Boards (The Next Level)

A load board is an online system where people can post or search for loads that need to be moved. While freight brokers can use these load boards to connect shippers and carriers, it’s also used by truckers and shippers to network and match loads themselves. Some load boards are free to use while others charge for a monthly subscription plan. Utilizing a load board gives both parties a large degree of control over the process and an expanded audience, but also requires them to manage contacts, paperwork, billing and other processes involved with load transportation.

Level 3: Freight Marketplaces (The All-in-One, One-Stop-Shop)

Unlike a load board, a freight marketplace is an all-in-one solution for shippers and carriers. This is where Cargomatic shines. Truckers and shippers get connected and conduct their entire transaction via the marketplace. Shippers post the loads they need moved to the marketplace and are instantly quoted a price. Carriers get quick and easy access to job offers and load notifications via a mobile app. Truckers in the region are instantly notified with details and how much the jobs pay. With the Cargomatic marketplace, once a driver accepts a load and the connection with the shipper is made, we handle all the load tracking, billing and paperwork online in real-time. Within the world of the freight marketplace, shippers have access to free technology, on-demand capacity, real-time shipment tracking and alerts, paperless billing, just-in-time delivery, and fair pricing. Truckers receive quick payments within days of delivery at no additional cost and gain access to a diversity of different shippers with different shipment types and routes. This gives them the ability to maximize the use of their trucks, make more money and regain control over their routing and home time schedules.

Not sure which option is the best for you? Check out our next blog post, which will help you decide! Finding the Best Fit – Freight Brokers, Load Boards or Freight Marketplaces.

How to Address Local LTL Shipping Challenges

How to Address Local LTL Shipping Challenges

In our last post, we discussed several challenges associated with local LTL shipping. Some of these include rates, capacity, quality and time. While it’s good to identify issues, it’s even more important to know how to address them.

Many times, shippers will work with brokers or use load boards to combat these LTL challenges. These are good options, but shippers may find quicker and more comprehensive support (and very competitive rates) from Cargomatic’s Local Freight Marketplace. We understand the challenges of local trucking and LTL shipping because that is what we do. We have created an entire platform to help you ship your local freight as easily, efficiently and cost effectively as possible. We are your local freight connection.

Rates can vary across the board in this industry, but our pricing is both fair and transparent. At Cargomatic, we’ve already done the job to find and vet trustworthy drivers for you. You can trust that when you choose a driver through our marketplace, you’ll be working with a professional, quality trucker to deliver your shipment. This reliability, paired with our competitive pricing, will help you get the most out of our local LTL shipping services.

Aside from the rates and quality of service, two other challenges we discussed in our last post are time and capacity. It can often take LTL shipments longer to arrive at their destinations as “traditional” LTL carriers strive to fill their trucks. Cargomatic’s large network of truckers helps you cast a wider net when searching for a reliable truck driver to haul your shipment. This helps you find the untapped capacity in your area and also helps those local truckers make the most of their available capacity – a rare win/win for both sides of the equation.  Each of your shipments includes our just-in-time delivery (with same day 2-hour pickup and drop-off windows), GPS tracking and real-time status updates. You’ll never be left wondering where your shipment is in the delivery chain, and you won’t be stuck tracking down your shipment yourself via phone or email.

At Cargomatic, we also handle all the billing, settlements and ”back office stuff” to make shipping as easy as possible for everyone involved. Instead of going through different billing systems every time you go through a different carrier, you’ll be able to streamline your billing process by letting us handle it for you. You can trust that our paperless billing process will take care of your needs accurately and in real-time. For more information about what Cargomatic can do for your business, contact us at 866-513-2343.