A Freight Broker is a logistics specialist that serves as a liaison between a manufacturer that needs shipping services and an authorized motor carrier.  Logistics is the science of optimizing the distribution of freight and freight-flow from manufacturer to consumer to reduce inventories, cut transportation costs, speed delivery, and improves customer service.  It is the process of planning, implementing, and controlling the efficient flow of goods. 

Freight brokers play an important role in the movement of cargo; the broker doesn’t function as a manufacturer, buyer, seller, or a carrier.  Instead, a freight broker works to determine the needs of a manufacturer (or shipper) and connects that manufacturer (or shipper) with a carrier willing to transport the items at an acceptable price.  Freight broker services are valuable to both manufacturers (or shippers) and motor carriers. 

Freight brokers help shippers find and book reliable carriers that might otherwise be difficult to locate and dispatch.  They assist motor carriers in filling their trucks and earning money for transporting a wide variety of items.  Freight brokers use their knowledge of the shipping industry and technological resources to help shippers and carriers accomplish their goals.  Many companies find the services provided by freight brokers to be indispensable.  In fact, some companies hire brokers to coordinate all of their shipping needs. 

During the middle and later 1990s, private companies discovered the benefits of hiring or outsourcing outside logistics experts (freight brokers) to manage the total flow of products from raw materials to finished goods.  Recognizing the value of the freight broker’s strategic business counsel, companies utilizing third-party logistics providers (freight brokers) have become more efficient, competitive and focused on their core competencies.  It is like having a full or part time virtual assistant traffic manager.

Often, freight brokers are confused with freight forwarders.  Though a freight forwarder performs some of the same tasks as a freight broker, the two are not the same.  A forwarder takes possession of the items being shipped, consolidates smaller shipments, and arranges for the transportation of the consolidated shipments.  By contrast, a freight broker never takes possession of items being shipped.

Some freight brokers are “alter egos” or sub-divisions, of either a shipper or a carrier, bringing their particular bias into its operating philosophy and rate setting (pricing). 

Other freight brokers are stand alone businesses known as “pure” freight brokers.   

Duregger Logistics is a completely independent “pure” cost plus freight brokerage which moves freight efficiently, at or below, the current, lane specific, average market rates.

The work we do for you is a simple 8 Step process which goes like this:

1. Rate research from 2 major databases and/or direct carrier survey. You call with Origin, Destination & details.

2. Market Rate Quote is given as the result of our research. It is presented to you for your review. We propose to move your load at or below the Market Rate. Our fee, identified in the Market Rate Quote, remains fixed as we negotiate with carriers to your benefit and pass the savings on to you. You may have a Target Rate in mind, more on that in Step 3.

3. Assignment: You approve the Market Rate with the understanding that we are trying to get it done below the Market Rate. Or, you then give us your Target Rate and we will try to make this shipment happen at that price.

Assignment means that this particular shipment is to be exclusively represented by Duregger Logistics to move. If a carrier calls you for this shipment after it has been assigned you must tell that carrier that this shipment is not available from you, it has been assigned. Your regular haulers may call you when we post your shipment because they may spot it on a loadboard. If the carrier still wants this load he will call and book with us.

Assignment can be made with an agreed upon notification time. Definition: “Notification Time, that certain clock time & date to give the shipment back to the shipper, if we are not successful in moving it, when the shipper can resort to an alternative transportation source and still meet his/her shipment schedule”.

Notification Time: You tell us what time we have until to work on this shipment and we will work on Finding, Negotiating, and Booking a carrier on it until that time. When that time comes we will contact you and “give the shipment back” to you, if you desire. The earliest notification time which we can accept is 1500 Hrs. (3:00 PM) the day before pickup. Realize that “Prime Time” for finding, negotiating with and booking backhaul carriers is 1400 to 1600 Hrs. (2-4:00 PM) the day before P/U and 0700-1000 Hrs. (7-10: PM) the day of shipment. Giving us the widest window of opportunity (working time) yields the most cost effective results.

Payment Options are presented and decided upon at this time for new clients. Shipments can be pre-paid by wire transfer, or by Bank Letter of intent to pay post delivery by wire transfer, or by applying for an Open Credit Account (allow three to five business days for this).

4. We Find interested & available carriers in real time. Carriers are contacted directly who we think may be interested or who may have available equipment in position. We also post the shipment publicly and carriers call us as well.

5. We Negotiate with available and interested carriers aiming at the Target Rate first, next… below Market Rate, then… at Market Rate. We will go above Market Rate only with your approval when truck availability, your time constraints, and service requirements dictate this. You are kept in the loop as every viable option develops.

6. We Book the carrier at the rate and service level which you approve. Every carrier booking is pre-approved by you. At this time the price is set and we send you a “Pick Up Request and Load Agreement (PURLA)“ which serves as the purchase order for the shipment. We ask you to sign this and fax it back.

Note: All carriers used come under contract with Duregger Logistics (copy of contract available upon request) and are pre-qualified and constantly monitored by us with regard to: Authority and Lawful Operations, General Liability & Cargo Insurance Coverage, FMCSA Safety Ratings, and Carrier Performance Ratings. Carrier specific information is available to our clients upon request. Cargo Insurance certificates are routinely requested by our clients for High Value Shipments. We can supply a Draft of the Bill of Lading, if needed.

7. We Track your shipment from pre-pickup to delivery and give you daily updates.

8. We Follow-Up with Quality Assurance calls to the Consignor and Consignee locations. Any problems will be attended to, reported to our client, & processes improved.

Or – “Two ways to stop losing money on transportation which you do or can control”.

Someone who controls the freight in any buy/sell transaction can benefit two ways by either earning money or saving money on the selecting of and payment for the transportation.

By engaging the services of the right kind of Licensed Property Broker of Transportation a purchaser of transportation (Shipper) is outsourcing essential transportation management services: carrier selection, price negotiation, contract writing (by the load), and contract enforcement over the carrier for transportation management fees which are contained in the freight cost per shipment at or below the actual Average Market Rates.

1) A SELLER can EARN MONEY on transportation by selecting and paying the transportation provider (Broker or carrier) himself and invoicing his customer for the freight by the “prepay and add” method. That is, to sell his wares with a delivery price as a line item in the sales contract labeled “Ship Best Way……..$Amount”.

Some sellers do this cost effectively for their customers (preferred) and many do not. It is perfectly legal and ethical to modestly mark up the transportation cost to arrive at your invoicing figure. Your earned Mark Up is for providing a legitimate service to your client by hiring a transportation provider to his benefit (he simply orders your product and waits for its arrival, (Prepaid-Ship Best Way, F.O.B Destination).

It is essential that an accurate Bill Of Lading (BOL) be supplied to the consignor’s shipment loading location (Origin). We are able to draft a proper Bill of Lading for you for each shipment and fax or email it to the point of origin for use by your consignor.

The Bill of Lading is a very important document which spells out legal obligations to the carrier, and all parties concerned, what is being transferred (Description), who the property is being transferred between (the Consignor and the Consignee), who is paying the freight charges to the carrier (“prepaid”, “collect”, or “third party” (We are the “third party” for all carriers supplied by us)), into whose legal responsible custody the shipment is being temporarily placed while in transit (Carrier), and at what point responsibility for freight damage claims against the carrier, if any, transfer from the consignor to the consignee (the notation will usually be either “F.O.B. Origin” or “F.O.B. Destination”).

F.O.B. means “Free On Board” indicating that the consignor is free of responsibility for damage claims against the carrier, if any, at the point designated. The F.O.B. point is a negotiable item in the sale. We draft and supply BOLs routinely for our shippers.

2) A BUYER can SAVE MONEY (“a penny saved is a penny earned”) on transportation by selecting and paying the transportation provider (Broker or carrier) himself, electing not to have the seller do it for him. (He buys a product, selects the transportation provider, is interested in the shipment from beginning to end). Not as simple, but he is earning money by saving money, he is providing this service on behalf of himself).

This frees him to try and get the best or possibly the worst deal on freight on his own. Many occasional, small, or medium sized shippers get taken advantage of by carriers because they are not savvy (knowledgeable) credit approved, volume buyers of transportation. This is where having a good, honest, and cost effective transportation providing broker represent him as a recognized (by the carrier industry), savvy, credit approved, volume buyer of transportation.

CARRIER PERFORMANCE ENHANCEMENT occurs when using the right kind of broker because a good broker is recognized by the carrier as an important volume buying customer. Also as an entity who is able to effect his carrier reputation among his customer base for reliability and the honoring of hauling contracts. Every load is contracted in writing by the Broker to the Carrier. Brokers and Carriers have the ability to effect one anthers’ reputation publicly thru main loadboard Carrier and Broker Performance Reports.

This exertion of positive and negative pressure has a very positive influence on both parties towards the honoring of each and every contract (load). That is why a good broker writes a detailed contract for each and every load tendered to a carrier. You may order a load hauled verbally, then, your broker gets busy with contract negotiation, writing, and enforcement. We intend to be the right kind of good and reliable transportation brokerage to the benefit of our shippers and our carriers.

Let’s take an example from the real estate industry. How confusing and inefficient it would be to have more than one broker representing the sale of a home at any one time? Can you imagine several different “yard signs” out in front of a house, and interested parties trying to decide which one to call? Then, having several agents trying to schedule “Open Houses” & “Showings” with the seller. Or, worse yet, (from the sellers standpoint) having a great buyer prospect negotiating along with an agent in good faith, and then, finding out that the house had already been sold, perhaps all along? Can you imagine interested buyers working the several agents against one another for the best buy or how the agents would be working the price down or up in order to be the first agent to bring together a deal? This confusion and duplication of activity, for obvious counter-productive reasons, is just not tolerated in the Real Estate industry.

Similarly, in the Truck Finding and Booking Industry (Brokering) the practice of listing the same load(s) with multiple brokers creates this same type of confusion. It happens that some loads are posted (listed) at the same time by several to a dozen or more brokers on the same internet load boards, some with no prices and some with varying prices listed. You can bet, in a hard market (more loads than trucks) with stiff competition for available trucks, that the Carriers will work this scenario to their best advantage working that shipper’s own brokers against each other and many times utilizing their shipper’s highest allowable ceiling price in order to be the one to book the truck first.

This practice sets up a scenario where the shipper’s own load, represented by it’s use of multiple brokers, falsely “increases competition”(hardens the market) for available trucking capacity, actually making it more difficult and less likely for the shipper to obtain the desired best service at the lowest cost. Sometimes the results are fast, but are they cost effective? How many trucks “fall off” of these loads?

The competition for available trucking capacity should only be the freight of other shippers. In a soft market (more trucks than loads) carriers avoid these type of load postings (same load, multiple brokers) preferring to call on the solo (non-duplicate) postings in order to speak with the responsible party (by making one phone call) to see about the load desired, being busy people (now enjoying the superior negotiating position) who have no time for “Shell Games”.

I believe that the best practice towards obtaining the best result is when the Shipper calls upon only one Broker to represent any one given shipment at any one time, working for a fixed (agreed upon) mark up (commission), this broker could then negotiate with the available interested carriers who know that they are dealing with the party which will, eventually, book the load. The interaction becomes less of a shell game and more of a business negotiation and transaction. This broker would also be able to contact back haulers to find out who is or is going to have equipment in the pickup area in the very near future. Also, this approach encourages repeat hauling from these backhaul carriers when they know which trusted broker to contact to satisfy their backhaul needs in the future (for repeat loads) in a given lane. The Shipper, through clear and timely communication with his broker(s), remains in control over each and every load in a cool, calculated fashion, obtaining the best transportation for the least cost. Thank you for your time and consideration. Please let me know how I may best serve you now and into the future.

Sincerely,
Tom Duregger, JTC, President

He saves his clients money 5 ways:

• By defining the actual average lane specific Market Rates being paid for similar shipments.  This alone provides a huge savings for many shippers.

• By moving shipments quickly at or up to 20% below the average Market Rates for Flatbed, Stepdeck, Van, and Reefer Loads.  Greater savings are possible for RGN, Oversize, Heavy, Super Heavy, and Extreme Heavy Haul shipments.

• By attempting to moving shipments at lower, Customer Set Target Rates.

• By using backhaulers I access the wholesale transportation marketplace getting the best service at the lowest costs as a known credit worthy wholesale buyer of transportation.

• By providing anonymity for my clients to bidding carriers I am able to get lower prices.  These savings are passed directly on to my clients.  The actual carrier costs and fixed brokerage commissions are clearly communicated to my customers.