Freight Broker Blog


Factoring Funding

What Every Freight Broker Should Know About Factoring

Invoice factoring has been around for thousands of years and can be traced to the 18th century B.C. Babylonian king, Hammurabi. Over the past 10 years, transportation intermediaries are directing more and more of their carrier payments to factoring companies ‐ anecdotally, we hear as much as 80%. At Triumph Business Capital, we’ve processed carrier payments for over 500 freight brokers, and our experience is consistent with those reports.

Why Now?

It starts with economics. Lots of new capital has flooded the commercial finance sector, and many new factoring companies have entered the transportation space. And, why not? The collectability of a freight bill is terrific. As a result of increasing competition, carriers are solicited daily with factoring offers of high advance rates (the percentage of the freight bill advanced at time the invoice is sold or “factored”) coupled with factoring fees that are a fraction of what they were 10 years ago. In fact, factoring fees are typically at or below the same pricing which many brokers charge for quick pay.

The quality of factoring services has improved as well. Many of the top factoring companies offer online credit services, fuel purchase programs, equipment and insurance financing and mobile technology applications. The factoring industry has come a long way, too.

Frequently Asked Questions

Q. What is the difference between recourse and non‐recourse factoring? And, how does it affect me?

A. Recourse means the factoring client is ultimately responsibility for the payment of the invoice. Non‐recourse factoring allows companies to sell their invoices in a style in which the factoring company assumes the credit risks. Often misunderstood, non‐payment for legitimate disputes (such as shortages, claims, late delivery, etc.) remain the responsibility of the client regardless of contract form. The style of a carrier’s factoring contract should have no impact on the freight broker.

 

Q. What is a Notice of Assignment and do Freight Brokers need to acknowledge them?

A. The Uniform Commercial Code (§ 9‐406) outlines the business and law underlying the invoice factoring industry. The ability to assign payment obligations (accounts) from the
broker (account debtor) to a factor (assignee) was a purposeful and intentional provision that the UCC drafters identified to provide businesses with opportunity to raise working
capital. Remember, the assignment of pay proceeds is separate and distinct from the assignment of services or other responsibilities in a legal contract (i.e., Broker‐Carrier
agreements). Payors cannot restrict the assignment of proceeds and are subject to double‐payment liability if they choose to ignore proper notification. Notice of
Assignments (NOA’s) can be presented by an invoice “stamp”, separate communication (letter) or both. Once you have been “effectively noticed” all payments must go to the
factoring company, whether the invoice has a stamp or not, and regardless of any claims by the carrier whether or not a particular invoice was factored. Never stop sending
payments to the factor until you receive a release letter, which the factoring company should be willing to provide

 

Q. What makes a Notice of Assignment binding? Is a signature required?

A. The effectiveness of an NOA is a question answered by case law, but the practical guidelines are simply and widely accepted. The account debtor is not required to
acknowledge the NOA with a signature and, even if there was a signature, it might not be clear as to whether the person signing the NOA had the proper authority to do so.
So, you don’t have to sign them – but that doesn’t really matter. Once an account debtor sends payment to the factoring company, it’s broadly understood that they did so based
upon receiving notice. (Why else would you send money to someone other than the carrier who hauled the freight?) If you pay a factoring company one time, then the NOA
is probably effective and you’re most likely bound by its terms. Now, you can refuse to use carriers that work with factoring companies, or even certain factoring companies,
but you can’t ignore a valid NOA once received.

 

Q. Am I obligated to pay a carrier’s factoring company if we haven’t received a Notice of Assignment.

A. Short answer is No. With more and more “online” or “cash advance” lenders entering the space, this question is more likely to come up than you may realize. A business may
grant a factor or lender a security interest in its accounts receivable, and perfect that security interest by filing a UCC financing statement. Security interests establish priority
among secured creditors, but do not impact payment remittance. It’s all about assignment and your receipt of effective notification of that assignment.

 

Q. Does the presence of a factoring company restrict our ability to offset future payments for claims?

A. Frankly, there’s a lot of “urban myth” surrounding this subject, but it ultimately depends on the broker‐carrier agreement. UCC § 9‐404 provides the factor (assignee) with certain
protections against claims and defenses – but only to the extent that the contract was silent on those provisions. Generally speaking, the broker’s obligation to the pay the
factor are identical to the contractual obligations for paying the carrier. As a practical (and ethical) matter, the factor is entitled to the same level of communication regarding
claims and setoffs that you would reasonably provide the carrier.

 

Q. What can be done about factoring companies which report slow payments and delinquencies to credit reporting agencies, regardless of how timely those payments are sent?

A. There are two primary reasons for unfair credit reporting: the U.S. Postal Service and bad factoring companies. Mail times are continuing to deteriorate, and payors using mail
service providers are likely experiencing additional delays. If you’re committed to mailing your payments, utilizing the “Intelligent Bar Code” will reduce USPS time and
processing errors. Alternatively, most reputable factoring companies will accept payment by ACH or wire, particularly if your TMS or accounting system can provide
reasonable instructions for correctly applying those payments.

 

Q. What about the “bad actors” in the factoring community, who are unreasonable, annoying and difficult to deal with?

A. The International Factoring Association (IFA) is an engaged trade organization which is elevating its constituency through education, best practices and advocacy. Over 450 IFA
members ascribe to a Code of Ethics and the organization actively responds to inquiries and disputes. You can contact the IFA at (800) 563‐1895 or info@factoring.org.

 

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Making Sense Out of Carrier Payments

Freight brokers pay carriers – that’s what you do.  You do it for fuel advances and again when the load’s settled and billed. You pay when it’s due and sometimes you pay quick.  You pay by fuel card, by express check, by bank draft, by paper check.  And mostly you pay factoring companies – after they call to verify the load, again to check for advances and yet again to collect.  You’re ready to pay the trucks who’ve been with you forever, the one that showed last week and the one which may still call back.  You pay carriers – but is that what you do best?

New Technology, More Options

Large industrial firms have been outsourcing vendor payments for decades. It’s become a standard practice in medical, hospitality and government contracting.  The consistent premise is to operate your business within your business systems, and to have your systems feed payment instructions to payment processors – seamlessly, safely and cost effectively.  That’s the goal.

The evolution of technology integrations has also resulted in a proliferation of financial solutions.  Some of these solution structures make particular sense in certain industries, not so much in others.  Some providers offer credit capacity, others focus only on technology solutions.  Just to make things more confusing, the terminology isn’t consistent.  But overlooking the labels just a bit, we can identify three general categories of payment processing solutions.  For purposes of this road map, let’s call them Dynamic Discounting, Supply Chain Finance and Virtual Card Payments.  And, of course, there are combinations of the three, but let’s get started anyway – paying particular attention to what makes sense in for-hire transportation.

Dynamic Discounting

The simplest form of payment processing involves an arrangement between a buyer (such as a freight broker) and vendor (carrier) whereby payment for goods or services is made early in return for a reduced price or discount.  Dynamic Discounting has been primarily a technology service offer with the following characteristics:

  • Transaction unchanged between buyer and vendor
  • Servicer may or may not provide credit or liquidity
  • When credit is provided, it’s most typically in the form of a loan structure (to buyer)
  • Often combined with other tech-based services, such as freight bill auditing

We haven’t seen huge impact of Dynamic Discounting in the trucking space, largely because of the complexity.  Most truckers are happy with two payment terms: standard and quick.  The market saturation of factoring companies has probably simplified quick pay requirements as well.

Supply Chain Finance

Often called “Reverse Factoring”, the basic premise is that buyers (freight brokers) can become more attractive to their vendors (carriers) by incorporating working capital options from the onset. Unlike traditional factoring, where carriers sell their accounts receivable, reverse factoring is a financing solution initiated by the broker to help its carriers to finance their open accounts more easily and at a lower cost than what would normally or otherwise be available.  In Europe, where factoring is more prominent than in the U.S., Supply Chain Finance has become more prevalently adopted than traditional factoring.  Characteristics include:

  • Cost benefits to both buyer and vendor
  • Proactive alternative to “Factor Fatigue”
  • Optimal in markets where buyers deal with a large number of small vendors and can rely upon the payment processor to minimize onboarding costs

Our company’s payment processing platform, which we call TriumphPay, is a form of Reverse Factoring or Supply Chain Finance.  There are a few other very good products coming to the transportation intermediary market in this style as well.  From a broker’s perspective, the quality of the carrier experience, and consequently their rate of adoption, will largely drive the cost saving benefits to be realized.

Virtual Card Payments

Despite several transaction models, this is a style of B2B payment processing that uses a single-use credit card number. Virtual card payments have become extremely popular in certain industries and offer distinctive advantages to buyer, including fraud deterrence and revenue opportunities.  However, processing costs are transferred to vendors which has resulted in limited adoption in other industries.

  • Highly controlled, buyer-centric process
  • High adoption rates in stable and/or contractual vendor communities (i.e., hospitals/medical providers)
  • Low adoption rates in markets with high factoring penetration

To be fair, Virtual Cards are a valuable tool to have in your payment processing toolbox.  You’ll need to determine whether it’s a platform you lead with or use to supplement other transaction models.

Outlook

Payment processing options are coming.  If the U.S. trucking industry is similar to other markets around the world, it will be coming quickly. But please understand, these are customized solutions that can be tailored to fit your business like a glove.  The more time you invest in learning about the various structures, including their relative strengths and weaknesses, the better equipped you’ll be to make these financial products works for you.

 

 

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7 Common Bookkeeping Mistakes Freight Brokers Make

Freight brokers have a lot of responsibilities, from matching shippers and carriers to making sure each piece of cargo gets to the right place. Another essential task in this busy industry is bookkeeping. Freight brokers who don’t prioritize bookkeeping can end up losing money in the long run. Here are seven common bookkeeping mistakes freight brokers make and how to avoid them.

1. Attempting to DIY

In order to save money, many business owners insist on handling the books themselves or delegating the task to an inexperienced employee or family member. While you may initially save time and money, costly errors can result in higher bond premiums, more expensive financing terms, and other unforeseen expenses in the long-run.

Hiring a competent bookkeeper will save you money, because the job will be done quickly and efficiently, with fewer errors.

2. Postponing important tasks

Running any business is hard work. Many freight brokers find themselves too busy doing the day-to-day work to focus on important bookkeeping tasks such as reconciling bank and credit card accounts each month. Reconciling statements helps you catch errors and know how much cash or credit you actually have.

Although postponing this task may be tempting, you should reconcile your bank and credit card statements every month, preferably as soon as each statement is available. That way, you can identify any missing deposits, lost checks, or fraudulent charges and address these problems in a timely manner.

3. Not tracking invoices and receivables

If you’re not properly accounting for receivables, you can’t get paid. Getting paid equals cash, the lifeblood of every business.

Experienced freight brokers know that the delay between when you must pay your carriers and when you receive payment from your customers can strain your cash flow.

If tracking and collecting invoices takes too much time, consider invoice factoring. For a small fee, an invoice factoring company like Triumph Business Capital will purchase your invoices. You’ll get paid immediately without the time and expense of dealing with collections.

4. Ignoring liabilities

When a surety looks at your business financials to underwrite a bond, one of their major considerations is whether you have enough assets to cover your liabilities. Inexperienced bookkeepers sometimes remember to record a liability, but then forget to reverse the liability when the payment is made. This error results in an overstatement of liabilities and an understatement of net income, making your business look less financially stable than it actually is.

You can avoid this type of error by hiring an experienced bookkeeper. It’s also a good idea to have another set of eyes (either an owner or a CPA) review the balance sheet regularly and look for unusual account balances.

5. Miscategorizing expenses

Another common error made by inexperienced bookkeepers is miscategorizing expenses or creating too many expense categories. Most businesses and industries have a fairly standard set of expense categories. Miscategorizing expenses or creating too many categories can be a big red flag, signaling to a surety or loan underwriter that your books are not well prepared.

Set up your accounting software correctly from the start with the help of an experienced bookkeeper or accountant and don’t add new expense categories without careful consideration. If you’re unsure of how to classify an expense, ask your CPA or accountant for guidance.

6. Missing details on invoices

When invoicing your customers, you need to provide sufficient detail on each line item. For example, is the charge a flat fee, or do you invoice per mile, per piece, or by weight? If you include additional charges, such as reimbursement for fees or fuel, you should list these as separate line items. Make sure the charges are properly detailed so there is no confusion.

Including the necessary details on your invoices will prevent pushback from your customers for charges they don’t recognize. Any missing information can cause delays in payment—a headache no business owner needs.

7. Missing out on accounting software functionality

Often, in an effort to get their business running, freight brokers purchase an accounting software package but never take the time to learn how to use it correctly. If you’re outsourcing all your accounting and bookkeeping tasks, this is probably not an issue. On the other hand, if you’re using the software at all, even just to enter checks and run reports, you should take the time to learn all of the available functions.

The right accounting software, when used correctly, can save you time and give you real-time information on the state of your business—information you can use to make important business decisions.

Get paid instantly

Want to take one task off your endless to-do list? Learn more about how invoice factoring can put cash in your bank account, while Triumph Business Capital handles the time-consuming task of calling shippers to collect on invoices.

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Finding the Right Freight Broker Training

When you search for freight broker training courses on Google, you will inevitably find pages and pages of results. How can you decipher which one is best for your freight brokerage? More importantly, how can you determine which one will provide the best return on your investment? Let’s take a look at a few of the key features to look for when choosing a freight broker training program for your business.

Experience

The goal of any freight broker training program is to gain as much knowledge and value as possible in order to grow your freight brokerage. To improve the chances of achieving this goal, you need a training partner that has specific experience in the freight broker industry. For example, the Transportation Intermediaries Association (TIA) training program is backed by over 30 years of experience in the industry. Typically, the longer the company has been in business, the more reliable their training program will be.

Reputation

Along with extensive experience comes a host of satisfied customers. The reputation of the training provider you choose should be an important factor in determining whether their program is worth the investment. Are there other freight brokers or those in the transportation industry talking about this program? Look for reviews to find out if it’s legitimate. If you’re not careful and don’t do your homework, you could end up with a training program that is sub-par and fails to produce the results you’re after.

Convenience/Flexibility

Freight brokers often find themselves being pulled in a number of different directions. To accommodate this somewhat chaotic schedule, you need a training program that supports the busy freight broker lifestyle. This may include online classes or courses that can be completed at home. Of course, some people are just naturally more successful attending a physical class. Figure out what best fits your schedule and plan from there.

Cost

For most freight brokers who are just getting started, the cost of training is also an important factor. Not only do you need to find a program that will provide quality course material with training options that suit your schedule, but it will also likely need to fit within a particular budget. Companies looking to free up extra capital to fund training may consider freight broker factoring as an option. Simply sell your outstanding accounts receivables to a factoring company, like Triumph, and you could have cash in your pocket the same day. Freight broker factoring is a great alternative to other quick cash options.

As with anything else in business, choosing the freight broker training program that’s best for your freight brokerage is an important step in ensuring a qualified, well-trained staff. Knowing what characteristics to look for – such as the ones listed above – can help take you from overwhelmed to confident when choosing the best freight broker training option for you.

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The Importance of Finding Your Niche While Maintaining Flexibility

The freight brokerage industry is one of intense competition. While being flexible is important, identifying a specific niche to focus on can help your firm stand out and improve your chances of sustained profitability. Some freight brokers naturally know what markets they should target based on their experience within the industry, but others – particularly those who are just starting out – may not find this decision as straightforward. If you find your company is taking on too much, or you’re struggling to differentiate yourself from your competitors, here are a few tips for locating and capitalizing on your most lucrative market.

Benefits of Niche Marketing

The reason focusing on one or two key areas is so advantageous, especially in the freight brokerage field, is because doing so allows your firm to develop a higher degree of expertise. By working in the same market segment day in and day out, you will become immersed in all of the elements that make that sector unique. Over time, this in-depth experience will help your company emerge as a trusted resource, both for existing and prospective customers. You’ll also be able to dedicate your time, effort and marketing dollars to a much more targeted audience, increasing your ROI.

Identifying Your Freight Broker Niche

Some freight brokerages find it easy to identify the specific niche markets where they’d be most likely to succeed. For others, this process takes a concerted effort. If you’re in the latter group, here are a few tips for determining which areas would be best for you to focus.

  • First, assess your company’s unique value proposition. What makes your firm so special? Why should your prospects choose your freight brokerage over another? Identifying these strengths and key competencies can help you further define the area in which your services would be most effective.
  • Next, consider the various segments in the industry to determine which most closely matches what your firm has to offer. Some niches to consider include:
    • Regional
    • Type of product/material being shipped
    • Type of trucks used
    • Specialized brokerage cargo
  • Finally, once you’ve decided on an area of focus, immerse yourself in it. Learn everything there is to know about that particular segment and start marketing your firm accordingly.

Additional Tips

Now that you’ve figured out which market your firm is best suited for, the real work can begin. Developing a strategy and establishing yourself as a key player in your chosen area of expertise isn’t something that happens overnight. It takes time and effort to truly achieve the results you’re after. That said, here are a few tips to get you moving in the right direction.

Leverage Your Experience – On-the-job experience is extremely valuable and a critical component of successfully establishing yourself as a niche market expert.

Build Your Portfolio – Focus on landing a few good clients and then build on that momentum. Over time, this will help your freight brokerage to develop a reputation as a leader in your chosen market.

Establish Alliances – In such a competitive industry, putting down roots in a specific segment can be challenging. Linking up with other professionals who are also related to the industry (but not direct competitors) can help. One example is you can find other professionals through the TIA.

Promote Your Specialty – Once you’ve identified and begun conquering your particular niche, make sure your marketing efforts are aligned accordingly.

Invest Wisely – Lastly, you cannot expect to be successful, unless you’re maximizing your firm’s cash flow. If this area still isn’t your strong point, freight broker factoring might be an option to consider.

The freight brokerage industry can be fiercely competitive. While it may seem like a good idea to be open to all areas of business, taking on too much could potentially harm your company in the long run. Focusing on a specific niche market, on the other hand, can really help your firm stand out. The tips provided above should help you identify what areas to focus on for optimum results.

Want more industry tips and tricks? Check out our Freight Broker Blog.

Truck who uses freight factoring pulling into truck stop

Freight Factoring Can Keep You Rolling

Cash flow problems can cause you to put the brakes on your trucking business. Before you find yourself running on empty, take a look at freight factoring; it’s cash flow without debt.

You may have heard of this type of financing before around the truck stop or at trade shows under different names like truck factoring, accounts receivable financing or even transportation factoring. Despite the name, the purpose is the same: to get you cash when you need it.

What is Freight Factoring?

Factoring companies like Triumph Business Capital can purchase your outstanding invoices for a small fee, so you don’t have to wait 30, 60 or even 90 days to get paid.

With that extra cash in hand, you now can pay your drivers (or your salary), insurance costs, fuel and other expenses eating at you. If you’ve been thinking about growing your trucking business, freight factoring can help you buy more trucks and hire more drivers.

With truck factoring, slow paying customers don’t have to slow you down.

Freight bill factoring isn’t one size fits all. It grows with your business. Through recourse and non-recourse factoring, you can tailor factoring to fit your business.

What to Look for with a Factoring Company

Your transportation factoring company will be dealing a lot with your money, so the first thing you want to look for is a team you can trust. Make sure you have the ability to see the status of your funding whenever and wherever you need to.

Yes, a rate is important, but a freight factoring company you can trust is of greater importance. That low rate isn’t going to do you any good when your factoring company won’t communicate with you about when you will get your money.

You should also look for a trucking factoring company that partners with others who offer helpful services to truckers. For example, Triumph Business Capital is exclusively partnered with DAT Solutions, allowing load board users to see which loads are factorable directly on the load board.

Stability is another important aspect to look for in your freight factoring company. Because your factoring company deals with your cash, you want to make sure it is financially stable. Along with Triumph’s financial stability in Triumph Bancorp, it also has the ability to offer your business various financial services- insurance, equipment financing and even asset based lending.

Freight factoring could be the answer to your inconsistent cash flow. Feel free to give an expert at Triumph a call at 866-368-2482.

For up to date information on the trucking industry, follow us on Facebook, Twitter and Google+.

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Get Ahead with Your Carriers: 5 Freight Broker Software Products

Utilizing software product can play a big role in the success of a freight brokerage for a number of reasons. First, it can help streamline operations. It can also dramatically improve efficiency and productivity levels. Finally, it’s one of the most effective ways to maintain compliance at all times. The problem is not all freight broker software products are created equal. To help making your selection a little bit easier, here are few of the more popular options, in no particular order.

Tailwind Transportation Software – The Tailwind product is great for freight broker companies that handle a variety of load types, including local, flat bed, intermodal, and long haul loads. It includes multiple load boards, accounting functionality, customizable quotes and is cloud-based and paperless. The company offers free demos so you can see how the product works prior to purchasing.

Ascend TMS – With their FREE TMS, AscendTMS manages loads, financials, document management and much more. If you need to pinpoint your carriers within your TMS, the AscendTMS tracker allows you to see where your drivers are located using their cell phone’s GPS. Also with this integration, carriers can send a text message with the status of the load, allowing you to keep tabs on the load from pickup to drop off. With AscendTMS, you also have the ability to post to 52 load boards, so your loads have the best chance of getting picked up. Learn more about AscendTMS’ features, here.

McLeod PowerBroker Software – This product is extremely popular among many large freight brokers because it is incredibly robust and feature-rich. It offers a fully integrated freight brokerage operations management system and a complete accounting software solution all in one package, from one company. Furthermore, the company also offers mobile applications so freight can be managed from anywhere.

Aljex– Aljex is a cloud based TMS with products for brokerages, carriers and intermodals. For freight brokers, they provide daily support, giving you the help you need when you need it. Their support is unlimited, allowing you to best use their robust system for all of your needs. From document imaging to posting to load boards, Aljex has many features available to users. You can even request a free demo of the product before you purchase.

3PLSystems, Inc. – The 3PL product branded as “BrokerWare™ Transportation Management System” is designed to operate freight brokerage from A to Z utilizing a wide variety of unique and highly-effective features. These include such options as least cost routing, sales portal, customer portal, and a bi-directional accounting integration. They’re also known for their user friendly interface. The company offers a number of demo videos as well as the option request a live demonstration.

When it comes to choosing the right freight broker software, the options are many. The five listed above should at least give you a decent starting point to help you narrow your selections and choose the ideal product for your business needs.

For more freight broker tips, see what we are up to on Facebook and Twitter!

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How to Find the Right Transportation Management System (TMS)

The most important freight broker software system that anyone in the freight brokerage industry needs is a Transportation Management System (or TMS for short). A quality TMS can help you match the right carriers with the appropriate loads, route those loads most effectively and streamline other critical organizational needs you have. Unfortunately, not all Transportation Management Systems are created equal. Here are some criteria to keep in mind when researching which product is right for you.

Stability – The first thing you want to look for in a TMS is how stable its developer/provider is. Even if you’ve heard of the company before, getting recommendations and checking references is highly recommended. You should also verify the financial stability of the company you’re considering. This may require work upfront, but worth it to avoid having the TMS company you chose go belly up after you’ve implemented it in your freight brokerage.

Compatibility – Regardless of how stable a TMS company happens to be, it’s also important to ensure that it’s compatible with the needs of your freight brokerage operation. For instance, a big-name company might meet the stability challenge, but their product might be way too complicated for the needs of a small brokerage. Conduct a needs assessment prior to comparing products so you’ll know which TMS would make the most sense for your firm.

Service Levels – Many software developers are super hands-on and attentive during the sales process only to disappear without a trace once the product has been purchased and implemented. You’ll want to look for a company that offers proven service and support after the sale. Ask as many questions as possible during the selection process, such as whether they offer training and convenient support hours. Also, ask for and check references.

Carrier Relationships – The purpose of adopting a Transportation Management System is to make your life easier. One significant way in particular your TMS can accomplish this goal is by organizing your carrier relationships. A quality software system will allow you to manage your carrier contracts as well as keep track of important contract details. It can even help you identify which carrier is best for each load and calculate cost so you’ll know better how much to charge.

Shipment Tracking – Finally, though equally important, a great TMS should allow you to track your freight brokerage shipments in real-time, right down to the tiniest detail about in-transit items. This will allow you to keep your customers more informed and therefore more satisfied. Ultimately, the most effective system will provide visibility into truckload, less-than-truckload (LTL) and parcel shipping details.

Choosing the right software product is important, particularly in terms of maximizing your freight broker leads and shipments. Knowing ahead of time what factors will truly make the difference can help ensure you end up with the TMS product that’s perfect for your needs.

For additional freight broker tips, including how to leverage freight broker factoring to improve your brokerage firm’s cash flow, give us a call today or check out our other blog posts here.

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How to Keep Your Freight Brokerage on Target with Invoice Factoring

The freight broker life can be a stressful life. You spend your days as a middle man working with shippers and carriers to get loads from point A to point B. Stress really sets in when it’s time for your carriers to be paid, but the shipper hasn’t paid you; because, let’s be honest, to retain quality carriers, you need to be able to pay them fast and consistently.

Sure, you can pre-pay your carriers, but you would need to have a lot of cash on hand. This option is hard for most freight brokers, because not many have that kind of capital lying around. Not to mention the strain that pre-paying carrier puts on your cash flow!

There is another solution to keeping your freight brokerage rolling – invoice factoring.

With freight broker invoice factoring, you sell your invoices to a factoring company for a small percentage, allowing you (and your carriers) to get your money fast. This solution keeps your quality carriers loyal to running loads for you. This kind of solution really can set you apart from the thousands of other brokerages out there.

With freight broker factoring, you can grow your business at your pace, and your financing will grow with you. Invoice factoring is a scalable financing option. Factoring isn’t like a loan that can overwhelm you with a heavy payment during a slow month. Also, there is no pre-determined limit on how much you can factor. You are only limited by the number of invoices you have to sell.

It’s also much more than just quick money to you and your carriers. Established invoice factoring companies, like Triumph Business Capital, provide a back office for their clients. Calling your shippers to chase down payments no longer has to be on your to-do list, because collection calls and services are included with your factoring relationship with Triumph.

Building credibility among carriers can also be a long road to haul when you are a broker trying to grow your business. Triumph Business Capital offers you a way to build your credibility while using their factoring services. When you factor with Triumph, you will automatically earn a green check mark on the DAT load boards, showing every carrier on the load board that you are financially stable and partnered with the industry leader in invoice factoring.

Freight broker factoring can be the key to an efficient freight brokerage, allowing you to pay quality carriers consistently and quickly.

To learn more about the freight brokerage industry, visit us on Facebook, Twitter and Google+.

Freight Broker and Trucker Relationship

Break the Ice With Your Carriers: 3 Relationship-Building Tips for Freight Brokers

Even in the age of social media, there’s no substitute for real relationships.
With today’s online load boards, social media networks, and nationwide WiFi, it’s possible for a freight broker to schedule a load without ever coming face-to-face with the carrier. You might not even have to pick up the phone. However, just because it’s possible doesn’t mean that you should.

The most successful brokers build their businesses the old-fashioned way: by creating and maintaining relationships with people they trust. Getting to know carriers is good for both parties. You’ll gain the confidence of working with someone you can count on. And they’ll feel better about working for you, which may translate to more favorable rates. This doesn’t mean you shouldn’t use technology. Load boards can be incredibly helpful in forming contacts and finding carriers for hard-to-fill needs. Still, nothing beats a real network of reliable people. Here are three tips to help build carrier relationships:

1. Listen to Your Carriers.

Listening is key to any relationship — whether you’re asking your spouse about their day, or asking a carrier about their last load. Start new business calls by asking questions, and listening to the answer. Ask carriers which lanes they prefer, and what weights they typically haul. Are there any routes they would they like to run, but aren’t currently hauling? Maybe you can help fill a deadhead section in their route, or contact them when you have a load near their home. Carriers will appreciate the fact that you asked, even if you can’t accommodate them immediately.

After a load has been delivered, follow through by asking your carrier whether everything went smoothly. If there were problems, address them quickly. And, if the carrier liked the lane, perhaps you could make it a recurring route.

Beyond business, show carriers you care by remembering personal details. You might consider creating a list of carriers with notes on each one, and referring to it when you call. A conversation that begins with, “Hi, Bob. How are the kids? You enjoying that Texas heat?” seems a lot more personal than “Are you available Wednesday for a load coming out of Fort Worth?”

2. Build Trust and Loyalty

Now that you’ve noted preferences, contact your preferred carriers first when matching opportunities become available. This shows loyalty. And, if your carrier isn’t available, they may refer you to another trustworthy carrier, filling the need and expanding your network.

Loyalty improves relationships — and it may save you money. For example, it may be tempting to choose cheaper carriers to raise profits, but if service is poor, you may end up losing business in the long run.

You can also build loyalty by reaching out to carriers throughout the year — not just when you have business for them. Many companies send cards or small tokens of appreciation to customers — such as a tin of popcorn or cookies — during the holiday season. For a more personal touch, note carriers’ birthdays, and send cards. It’s an inexpensive gesture, but it can go a long way.

3. Be Transparent.

If you make promises to a carrier, be sure you can keep them. If rates change, tell your carriers why. And, if you are considering using another carrier because of pricing, let your preferred carrier know. He or she may be able to work with you. Sometimes communicating the reason for a rate change, such as the season, supply and demand, location, fuel cost or miles, can help a carrier understand your point of view and avoid an awkward conversation.

Building relationships with carriers takes time, but it’s worth the effort. Of course, carriers also value relationships with brokers who pay quickly and reliably. If you need assistance with capital funding, contact Triumph Business Capital. We look forward to forming a mutually beneficial business relationship with you.

Freight Broker Authority

How to Earn a Freight Broker Authority

Good pay. Control over your hours and benefits. Less time behind the wheel — and more time with your family. There are many reasons to become a freight broker, especially if you have a history of working in the trucking industry. According to payscale.com, freight broker salaries can range from $30,015 – $72,756, and a majority of brokers report being highly satisfied with their jobs. If all this sounds good to you, we’ve got good news: applying for freight broker authority may be easier than you think. Here’s how:

  1. First, apply for your USDOT (Department of Transportation) number.

    You’re going to need it on a lot of other applications, so it will speed things up if you get it ahead of time.

  2. Next, register with the Federal Motor Carrier Safety Administration (FMCSA).

    You’ll need to fill out the OP-1 Application for Motor Property Carrier and Broker Authority, to receive your MC number or FF number. There is a $300 filing fee that must be submitted, along with your application. You can file in one of three ways:
    Online: You must have a credit card to process your online application. However, this method is faster than others.
    By Mail: You can complete and print your OP-1 form and mail it to the address on the form, along with payment. This method doesn’t require a credit card, but it is a bit slower.
    By Phone: You can request the form by calling 1-800-832-5660. It will be mailed to you, and you can then complete it and return it by mail. This option is good for people who don’t have Internet access, and/or aren’t comfortable using the Internet. However, it’s also the slowest method. It can take up to four weeks to process your application by mail.

  3. Obtain a Surety Bond and apply for proof with the FMCSA.

    Freight brokers are trusted by both shippers and carriers — so it’s essential that you’re properly insured. This protects you and your customers. In the event that a shipper is unable to pay for a shipment, the freight broker is responsible for paying the cost. And, if you’re unable to pay, your Freight Broker Bond (BMC-84) will act as insurance, covering the expense. To apply for a bond, you’ll need to submit an application to a reputable insurance firm, which will conduct a background check and credit check. The cost to obtain surety bonds for freight brokers may range from $1,800 and $10,000 a year, for $75,000 of coverage. Once you receive coverage, your insurance provider will need to provide proof of that coverage to the FMCSA.

  4. Designate a Process Agent.

    Within 90 days of receiving your MC or FF number, you will be required to designate a process agent for any state in which you will do business. This will be someone who represents your company and can receive documents in the event of legal action.

  5. Receive your License.

    Step 5 is the easy one — and it’s also the most exciting. It’s a great day when you receive your License of Operating Authority. This means that you can begin doing business as a freight broker. Welcome to the world of Logistics. We wish you a safe and successful journey.

Want to learn more about being a freight broker? You’ll find lots of information on the Triumph Business Capital blog. We can also help you access capital funding to grow your new business, through our invoice factoring services. Want to learn more? Give us a call.

Freight Factoring

The State of Freight Brokerage Industry in 2015

High pay. Growing demand. Stable industry. It’s a good time to be a freight broker. Here’s what the industry looks like today.

If you’re considering becoming a freight broker — or wondering if you’ve made the right choice — we’ve got good news for you. Despite recent setbacks, the industry is currently doing quite well. In this blog, we’ll look at the benefits of being a freight broker, the state of the industry, and the reasons why we’ve arrived where we are today.

Low Supply. Growing Demand.

Just a couple of years ago, a great number of freight brokers were forced to go out of business, creating a gap in supply. Why? In 2013, the Federal Motor Carrier Safety Administration (FMCA) increased the bond requirement for freight brokers from $10,000 to $75,000. Many brokers simply couldn’t afford it.

Originally put in place in the 1930s, the freight broker bond requirement was designed to protect shippers who do business with brokers. The bond guarantees that freight brokers will pay carriers, and will not use unethical business practices. The required amount had remained at $10,000 since the 1970s — so the large increase was a shock for many brokers. Bond price is dependent on a broker’s credit score, so those with credit problems and a lack of financial resources were pushed out of the industry. This caused a drop in supply, and a growing demand for the brokers who remained.

Improved Credibility. Reliable Stability.

New bond requirements mean the freight brokers who are still in business have better credit scores, and more stable operations. They also have a lot less competition. This has led to improved job security for brokers, and better security for shippers. As a result, the industry is enjoying a more stable and trustworthy reputation.

Better Credit Means Lower Bond Costs.

Because today’s operating brokers have higher credits cores and stronger financial resources, bond prices are beginning to go down. This makes it less expensive for new brokers to enter the business.

High Salaries. Strong Future.

Freight brokering is a lucrative industry, with U.S. salaries typically ranging from $30,000 to $80,000. New brokers will start out making less, but experienced brokers can make upwards of $90,000. This salary range puts brokers well above the national median income of $32,140 or even the average household income of $53,657. High salaries continue to attract new brokers to the field.

Growing Industry. Bright Future.

The freight brokerage industry has grown 15% since the beginning of 2014, but the market still needs more brokers. Freight brokers play an important role in helping shippers and carriers. Now that we’re seeing better credit, higher salaries and less competition, brokers may experience even greater success in the future.

For freight brokers to be successful, they need excellent credit and strong financial resources. Triumph Business Capital can help. Our Invoice Factoring services help brokers collect payment for completed work, so they can pay truckers faster. This results in better credit, easy access to capital, and improved collections processes.

Freight Broker Training

Fear and Loathing in Freight Brokering

Hunter S. Thomson wrote, “Anything that gets your blood racing is probably worth doing.” What he did not specify is HOW to get your blood racing. If you know Mr. Thomson and his work (“Fear and Loathing in Las Vegas,” among others) you know he probably meant something illegal! However in business, getting your blood racing can be good and bad. Few industries can get your blood racing like being a Transportation Intermediary – or a freight broker.
Freight brokers inhabit a unique space in the overall transportation market. Brokers voluntarily insert themselves between shippers who want their freight delivered 100% on time, every time without a single error or loss, and trucking companies who most of the time do a good job, but who have to deal with the real world of stolen trailers, bad weather, road construction, flaky drivers and Acts of God. This is a recipe for “getting your blood racing”.

The First Year
First year brokers face a lot of challenges, depending on where you come from and your background. It should be much easier if you’ve been in the trucking or brokering world before, since you’ll have an understanding of everything a broker does – either way, being a broker is challenging and can be rewarding. What’s the old saying: “If it were easy, everyone would be doing it.” I know…it seems like everyone IS doing it, so here are some tips that might make it easier.

  1. As a first year broker, very few carriers are going to want to haul for you because you have no published credit and you’re new. Make sure you have trucking companies already lined up BEFORE you get into the business – you cannot move freight without them – and moving freight is ultimately what it’s all about!
  2. Shippers are going to be hesitant to work with you because…you guessed it…you’re new. You have no history of either being able to deliver freight on time and reliably. From a liability standpoint, shippers are paranoid about giving loads to someone that is unknown.
  3. Insurance will be relatively easy to obtain. Paying for it is more challenging. You can certainly write a check for your first year’s premium, but most people cannot afford that. In that case, you’ll have to deal with making a large (20%-30%) down payment and then qualifying to make 10-12 additional payments. If you’re personal credit is bad, this may a problem. There are some programs, like with Triumph Insurance, where you can pay 12 equal payments and forget about that big down payment.
  4. You need software! Trying to do this all on a spreadsheet is possible for a “baby” broker, but even having 10-15 loads in transit at once will quickly overwhelm even the most organized of people – thus it’s better to have a software program figured out (there are lots…some are even free for the first couple of users!).
  5. Financing – once you’ve hauled a load and issued the invoice…then what? The carrier is screaming that you need to pay them, and you’ve still not been paid by your customer. What now? You need a factoring company that specializes in factoring freight brokers. Do your homework on this – having a factoring company that knows and specializes in freight brokers can make or break your business – and can make life much easier.
    Shameless Plug: Triumph Business Capital has a broker program that has one of the most important features I can think of: When you sign up with Triumph, you can automatically offer your carriers “quick pay” AND, maybe more valuable than anything, you get a “Green Check Mark” on the TransCore/DAT freight load board. What does this mean? It means carriers will haul for you BECAUSE you’ve been approved for factoring with Triumph and have that green check mark on the load board.

OK – so this last one may seem a little self-serving since I work for Triumph Business Capital. I’m guilty of that – but even if you don’t use Triumph, there are still 5-10 other factoring companies out there that have special programs for freight brokers. The main feature is this:
Any factor that knows what they are doing in the freight broker market pays the carrier on behalf of the broker. Do not play the float – it will eventually catch up to you and quickly sink the ship.

Past the First Year
Once you’re past the first year as a freight broker, congratulate yourself – most brokers don’t survive this long or they give up in frustration.
The long-term survival of a freight broker is obvious: You need a consistent flow of freight to move or you’re out of business. I’m not being biased because I’m in sales too – dispatching and operations is critically important to being a freight broker. But let’s face it – you can have the most efficient, technologically advanced dispatch and driver management process anywhere in North America, but if you’re not moving loads, it does not matter. Another old saying is, “nothing happens until someone sells something.” That was probably said by a salesman looking to keep his job, but it’s essentially true – the sale of a service or product is the first step in the delivery process. You may be excellent at managing drivers and all the details of dispatching, delivery, financing and office management – but if you’re not good at sales, find someone who is and pay them to make sure you have a consistent flow of new business coming in the door. If you ARE good at sales, then the opposite is true – pay someone to do all the technical stuff and you FOCUS on sales. Do what you do best and pay someone well to do the stuff you do not like to do or are not good at.

Margin preservation is the other monster challenge. If you’ve been moving loads for the same customer for 18 months and a new traffic manager comes along, that person may not know you as well as the outgoing traffic manager and suddenly you’re under the microscope. Also, corporate America is always grinding on all their vendors for lower rates, better terms, etc. Be READY for this, have a plan in place to deal with this WHEN it happens, not IF it happens. The larger your customer is, the more likely it is to happen. Make sure you keep statistics that you can use to make your argument to keep the pricing in place. These are all things you do anyway, but keep good records and written policies for each one that you can show your customer when it comes time for a review:

On time performance statistics;
Claims history (or mainly, lack of claim history!);
Carrier qualification process;
Documentation process and storage;
Financial stability;

This will also help your sales process when talking to new customers – show them how organized and sensitive you are to their concerns: On time, 100% delivery, low liability, organized, stable. Notice I’ve not listed PRICE…show them the value of your organization first and then talk price.

One more area new Freight Brokers should give some attention. Shippers are more and more concerned with the liability of using a broker to move freight. There have been some high profile cases in which large freight brokers were sued for millions of dollars because one of the carriers they hired to move a load was a bad risk and a fatality crash occurred. Be sure you are operating as a broker and not treating your carriers like company drivers. Lastly, above all, do your due diligence on all carriers you use.

Being a transportation broker in many ways is about curing a shipper’s pain of having to deal with hundreds of carriers or drivers delivering loads all over the place. Address that pain – solve the shipper’s problem. If you do that, your margins may actually increase as well as your longevity!

Transportation Intermediaries Association, TIA, freight brokers

Benefits of Joining the TIA

Freight brokers and other transportation intermediaries, commonly known as third-party logistics companies (3PLs), play a key role in domestic and international commerce. You may not be aware that there’s an organization specifically dedicated to advancing your interests by marshaling that collective power: the Transportation Intermediaries Association.

The premier organization for 3PL professionals doing business in North America, the TIA serves as the voice of this $157 billion-plus industry, representing 1,400 member companies. Small, family-owned businesses comprise 70 percent of TIA members, who serve tens of thousands of shippers every day and adhere to a strict code of professional conduct. Globally, TIA serves as the U.S. member of the International Federation of Freight Forwarder Associations (FIATA).

The TIA provides resources, education, information, advocacy and connections to establish, maintain and expand ethical, profitable and growing businesses in service to their customers.

What’s in it for you as a member?

Benefit from the TIA’s activities, resources, education, advocacy and connections on your behalf:

  • Lobbying to protect your business from harmful regulation and a strong voice for this important industry within Congress, the Administration, states, courts, shippers, carriers, and international organizations
  • Education, research and networking aimed at improving your current operations, enabling you to expand into new disciplines, and equipping your business with a competitive advantage
  • Member-only benefits, discounts, services and products to enhance your business while delivering a strong return on your investment
  • Upholding the highest ethical standards within the professional 3PL industry
  • Promoting preference for TIA members by shippers and carriers

Advancing and protecting your business

As a member, you save on registration for TIA programs and events, such as the annual Capital Ideas Conference & Exhibition and the Intermodal EXPO, offering networking, dialogue and education. You’ll also boost your visibility with a listing in the TIA Online logistics services directory and Buyers’ Guide.

Protect yourself and your business with access to the TIA Watchdog reporting system, which allows TIA members to alert each other to fraudulent operators within the industry. Use it to avoid the headaches of unauthorized re-brokering of shipments, no-shows and no-calls, cancellations after loads are accepted, theft or unjustified losses of freight, and other reportable issues.

Broker-focused education and career development

Take advantage of TIA’s practical, targeted, hands-on educational programs to carve out a competitive edge, keep abreast of technology changes and stay up-to-date on regulatory matters impacting the industry. Its training resources and industry research are also designed to help you excel in running your independent business:

  • Training opportunities span a wide spectrum of courses tailored to your needs. These include courses for new brokers, Marketing Transportation Brokerage Services, Introduction to Intermodal Transportation, Ethics in Transportation Brokerage and Temperature Control Transport, among others.
  • Career development opportunities for members include the industry’s only professional certification program for individual transportation brokers. The Certified Transportation Broker (CTB) Program incorporates home study and exam components, enabling you to pursue certification on your own timetable.
  • Actionable research materials equip you with tools and metrics to support your career in the third-party logistics arena. TIA products include the comprehensive 3PL Market Report on trends and practices, the Compensation Report, offering salary guidance, and the New-Broker Kit, chock-full of tools to get freight brokerage careers off to a great start.
  • Additional educational resources include free monthly webinars addressing such critical topics as cash management, regulatory changes and insurance; informational videos; and subscriptions to the TIA Logistics Weekly and the monthly Logistics Journal, publications not available to nonmembers.

Advocating for your interests

TIA Advocacy efforts promote the interests of freight brokers on important issues and legislation through research, developing and communicating policy, and educating and lobbying lawmakers. Key TIA advocacy issues focus on broker regulation, cargo security initiatives that strengthen our nation’s global supply chain and national security, and fighting industry fraud. Other issues of concern include government compliance, safety and accountability programs; national standards for hiring motor carriers; insurance requirements; hazardous materials transportation; and TIA’s veterans’ initiative.

If your principal business is arranging transportation of freight as a third party, joining the TIA is an invaluable way to work smarter, access best practices and extend your network.

Freight Brokers

5 Steps to Starting Your Own Freight Brokerage

Make more money. Be your own boss. Spend less time on the road, and more time with your family. There are many reasons why you may want to start your own freight brokerage, and the payoff can be huge. However, according to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. If you want to go the distance in the trucking industry, follow these 5 steps to start your own freight brokerage the right way, so you can make it in the long haul.

1) Get experience.

One of the best ways to learn how to operate your own business effectively is to work in someone else’s for a while. Whether you spend time as a shipper, carrier, agent, or in another capacity, your experience in the field will help you understand the business, and build your network.

2) Create a business plan.

When you put your goals on paper, you’re more likely to achieve them, so take the time to create a detailed business plan. Include your financial goals, mission and vision, and unique market position. Then, describe your action plan for achieving your objectives. Include strategic aspects, like how you will find carriers and shippers, and what special value you bring to both parties, as well as financial details, including rates you will pay carriers, your commission, a budget for expenses, and your projected profitability after paying business costs. This part of your plan is especially important if you intend to apply for funding from a bank. If you need help writing a business plan, there are many online resources available, such as this one from the Small Business Administration.

3) Take care of legal issues.

There are a number of legal requirements by which freight brokers must abide. Here are the most important ones:

  • Apply for operating authority with the Federal Motor Carrier Safety Administration (FMCSA). You’ll need to file an application (form OP-1), pay a $300 filing fee, and arrange for a surety bond or trust fund in the amount of $75,000. You can obtain these bonds using your own resources or a bonding company.
  • Obtain insurance coverage. Obtain liability insurance, and secure bonding in the amount required for your location.
  • Complete the Unified Carrier Registration and pay an annual fee, currently $76 per year.
  • Abide by state and local requirements. Check with your state and local government for any other requirements to establish and operate a business in your state.
  • Follow recordkeeping requirements.
    Freight brokers must keep accurate records of each transaction for three years, and make records available to all parties. Records must include:
    Shipper’s name and address
    Carrier’s name, address, and registration/USDOT number
    Bill of lading/freight bill number
    Freight brokering rates and the name of the person who paid for the brokering service
    Other non-brokerage services you performed, how much you were paid, and the person who settled the obligation
    Freight charges you collected and the date the motor carrier was paid

4) Get finances and banking relationships in place.

Create a business banking account, and establish a relationship with a commercial banker. Invoice factoring companies like Triumph Business Capital can also help you access working capital.

5) Open your office and get started.

Whether you’re establishing a home office, or setting up a commercial space, you’ll need a phone, desk or other workspace, filing system, and computer. Now is also the time to start marketing your company, if you haven’t already. You can create a website, purchase ads in industry publications or websites, and use direct mail to advertise to potential clients.
Triumph Business Capital specializes in helping freight brokerages succeed, so let them know if they can help with working capital for your new business. And, be sure to check out these social media sites for freight brokerage tips:

Twitter
Facebook
Google Plus

Invoice Advance

Freight Broker Bond Renewal Deadline is Looming

The October 1 deadline for renewing your annual freight broker’s bond and license is fast approaching. Unfortunately, despite the shock and industry opposition following the increase from $10,000 to $75,000 in 2013, there is no point to putting off this expenditure in hopes that it will drop significantly. Instead, here are some tips for easing your bond renewal headaches and cost – even if you don’t have stellar credit – and avoiding any lapse in coverage.

1) Get ‘er done sooner rather than later

First and foremost, your BMC-84 bond renewal is typically due 30 days before your current policy expires. While it’s human nature to wait till the last minute, the flood of freight brokerage policy renewals around October 1 can put your bond at risk of not being renewed in time. (Don’t flaunt the two-month grace period ending December 1.) You can’t legally broker trucking freight without a current license, so save yourself the aggravation and risk of losing business over a missed deadline. Get going on your bond renewal now and make sure you pay the invoice by the due date.

2) Judiciously explore opportunities to save money

An early start gives you more time to compare bond renewal offers and secure the most favorable policy. Costs will vary from year to year depending on your credit score, potential credit issues, years of professional experience, and the strength and liquidity of your financial statements. If you think you’re overpaying for your freight brokerage bonds and are unhappy with your service, another surety agent and/or bond agency may offer more aggressive rates or be able to negotiate a better deal on your behalf.

3) Don’t be pennywise and pound-foolish

Shopping multiple agencies on price can actually jeopardize your credit score and cost you more by generating multiple hard credit inquiries. Instead, identify a solid surety agency that has access to the best bonding markets and will only do a soft pull on your personal credit. What’s more, in the event of a claim, you need a knowledgeable, experienced bond agent who will act as your advocate. For your money, you want an agency that will fight for your interests, maintain the flow of information, and help you get the potential claim resolved with minimal disruption.

4) What to expect in freight broker bond premiums

  • Applicants with solid credit should expect to pay annual premiums that range from 1 to 4 percent of the $75,000 bond.
  • Applicants with credit scores of 650 or below may see their rates go up to a range of 5 to 15 percent.
  • In rare cases of poor credit, the bonding company may charge premiums as high as 20 percent or require collateral in order to issue the bond.

5) Yes, you can still secure a bond with bad credit

Despite what you may think, you’re likely to get a freight broker bond regardless of your credit score – unless you’re currently in open bankruptcy or you’ve been late with a child-support payment. It will just cost more. Some of the factors that will drive up premiums are the presence of tax liens, a past bankruptcy or civil judgments, among others.

6) Take steps to improve your credit

The better your personal credit score and history, the lower the risk surety agencies perceive in bonding your business and the lower your premiums. That’s why it pays to clean up any lingering negative items in your credit history before you start the bond renewal process.

7) Put your best financial foot forward

In addition to your credit history, surety agencies also look at your profitability and years of freight brokerage experience as indicators of financial strength and stability. Even if you’re a relative newbie, if your business is well-operated and making good money, present your financials in the most advantageous way to showcase a low-risk, stable, trustworthy business.

8) Be wise when selecting your surety bond agency

Look for agencies that work with a larger number of surety companies – but only those that are A-rated and T-listed. Why? The more likely they can match you with the best bonding option and provide a low rate that actually provides adequate security if there’s a claim on your bond. Get what you pay for in peace of mind.

Marketing for Freight Brokers

Fierce Digital Marketing for Freight Brokers

The loads you broker to carriers may travel for days over the road, but the impressions conveyed by your brokerage via digital channels can be more immediate and impactful. That’s why it pays to invest in engaging with your customers online. Tap the power of web-based, social and mobile marketing tools, such as social media, blogs and social advertising, to build your business and stay top of mind.

A digital marketing strategy can support prospects in researching the purchase decision, ease pressure on your sales department, shorten the sales cycle, and even help prequalify prospective customers. Acquisition, retention and upselling can also be streamlined with a great cross-channel digital marketing strategy.

Educate, engage and impress

For starters, use your website to educate prospective and current customers alike. Provide information that is valuable to your audience, then share and promote that content through your own website and the most relevant social media sites or platforms. Rather than scatter shooting, figure out the top two or three social networks your customers, partners and referral sources use and establish an online presence there. It’s not about accumulating thousands of likes or followers; it’s about capturing their interest and conveying that your people are knowledgeable, professional, approachable and capable.

Some key pointers for making positive impressions online:

  • Establish goals for your social media marketing efforts and how you will measure results.
  • Identify a team member who has the time and familiarity with content marketing and your chosen platforms to consistently maintain your online efforts.
  • Allocate the time and resources to feed the beast – to develop and publish a steady stream of content. This can include trend reports, blog posts, videos, comments on other articles or posts, photographs, infographics, etc. Focus on creating original content, which you can supplement with content from other sites if you secure permission and attribute it properly to the original source.
  • Ensure your own website is ready for its close-up. Is site content updated, polished and professional? Are page links and contact forms working properly? Can it handle a boost in traffic?
  • Engagement is a two-way conversation. Solicit input; respond promptly to comments and questions; offer content that prompts your community to talk about it and share with others.
  • Get real. Don’t expect a modest investment in social media efforts to propel your sales into the stratosphere or make you an online media darling. However, interactions can reveal more about what it’s like to deal with your company.
  • Be prepared for customers who use social platforms to complain about your company. If it happens, turn that lemon into lemonade. Social media can be a powerful vehicle for showcasing great customer service in real time. So make sure you respond quickly, acknowledge the customer’s concern, and resolve it in a caring, efficient manner.

Online can equal on-the-go

Also consider that digital marketing connects you to your increasingly mobile market. Today, an estimated 91 percent of U.S. adults have their mobile devices close to them and within reach at all times. It’s not just about online consumer purchasing. Today, more business people are using their mobile devices to conduct business and research providers – and they may be on social platforms at any time of day or night.

To reap the rewards of digital marketing, make sure you have a solid cross-channel strategy and a compelling, clearly defined value proposition that differentiates your services. Your social marketing needs to be integrated with traditional media and response channels. You’ll also need to be willing to try new approaches and to continuously improve on your efforts by compiling, reviewing and acting on analytics.

Factoring Contract

3 Tips to Find Quality Carriers

It’s every freight broker’s worst nightmare: You finally landed the big account you wanted, and you’ve been awarded a contract to serve as freight broker. If you can keep your client happy, you could see your business grow by double. But on the day their first load arrives, you get a call from your client — and they’re not happy. The driver was late, his service was terrible, and worst of all, the freight was damaged. Now, you won’t get paid the full amount for the load, and the shipper has cancelled your contract. Why did this happen? And, more importantly, how can you keep it from happening again?

If you’re a startup broker or a smaller broker, finding quality carriers can be a struggle — but it doesn’t have to be. You can protect your reputation and your bottom line by learning a few simple tips:

1. Get Connected.

One of the easiest ways to build your carrier database is to ask other freight brokers for referrals. Even if you don’t know any other brokers, you can start networking by joining an industry organization, such as the Transportation Intermediaries Association (TIA). TIA is a freight broker membership community that can be a great source for building relationships, accessing resources, and getting educated on important topics in third party logistics.

Members of TIA can access a Freight Broker Directory to find qualified drivers, and take advantage of the organization’s widely used TIA Watchdog feature. Think of it as the Angie’s List of the trucking world: it allows TIA members to inform one another about fraudulent operators. Users can report unauthorized re-brokering of shipments, no-shows, cancellations, theft, unjustified loss of freight, and other issues.

2. Get what you pay for.

If you needed a life-saving operation to remove a brain tumor, you wouldn’t go to an unlicensed, back-alley surgeon and ask for their best rate. You’d want the best doctor money could buy (assuming you’re insured.) Why? Because the more experienced and credentialed the doctor, the higher fee he or she can demand. While truck driving isn’t brain surgery, the same idea holds true: experienced drivers charge more. Generally speaking, low-paying loads attract low-quality drivers, and high-paying loads attract high-quality drivers. Be sure to understand the going rate for loads that are similar to yours, and offer a rate that is in line with the market.

You can get an idea of what other brokers are paying — and search for quality drivers — on reputable load boards, such as DAT Solutions. While load boards like these aren’t free, the freight matching services they provide may pay for themselves. You can use these services to post your loads immediately, and find safe trucks and reliable carriers fast. According to DAT’s website, their load board is searched by carriers an average of 303,000 times per day, increasing the likelihood that you’ll find the best match for your load quickly.

While it is possible to get a low quality driver from what seems to be a high quality carrier company, many load boards include tools that can help you minimize risk. Look for one that verifies carrier credentials and provides independent, third party information on carriers’ operating authority, insurance, and CSA safety scores. You can also read reviews to see what other brokers have to say about prospective carriers.

3. Get quality drivers by being a quality broker.

One of the best ways to attract a reliable, responsible carrier is to be a reliable, responsible broker. That means treating truckers the way you would like to be treated, and conducting your business in an ethical manner. If you pay carriers on time, communicate respectfully, and follow through on your commitments, they are more likely to do their best work, and even refer others to you. If, on the other hand, you don’t treat carriers well, word will get around. Truckers talk — and you want to be sure that they’re saying good things about your business.

It’s also important to understand the rules and regulations of the trucking industry, including Hours of Service (HOS) regulations. These rules establish maximum hourly driving limits, required rest breaks, and sleep requirements for drivers. They are essential to ensure the safety of drivers, passengers and other vehicles on the road — and it’s against the law for drivers to violate these rules. When truckers are assigned loads with unrealistic delivery deadlines, they are placed in a tough position that can compromise safety for everyone on the road. Be sure to set realistic expectations for your clients, and never ask a driver to stay on the road longer than HOS regulations allow.

Finally, show that you’re a reliable broker by never double-brokering carriers. Not to be confused with co-brokering, double brokering is illegal and takes place when a carrier (who may also own a freight brokerage) accepts a load from a freight broker under the guise that he will transport the load, but then brokers it off to another carrier. Be transparent in all of your dealings. You’ll avoid legal battles, and show carriers and shippers that you’re a trustworthy partner.

Quality carriers are attracted by fair brokers who pay well, and pay reliably. If you need assistance to working capital that can help you pay drivers faster (even when you’re waiting for payment yourself), contact Blaine Waugh, at Triumph Business Capital. He can provide you with a few more resources to help you become a more successful freight broker.