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How to Choose a 3PL, Freight Broker, or Freight Forwarder

January 11, 2012 - 12:31 PM

We make quite a few sales calls in a week. Our response varies from hang-ups to conversions and we field quite a few rejections. Most of the rejection is centered around the premise that a freight broker is dishonest or because a service failure occurred the last time the customer used a 3PL.

As a transportation purchaser you should remember that a 3PL is based in a service industry. Customer service should be the #1 priority from your transportation provider. If you're not getting great customer service, I would encourage you to look elsewhere.

When you start looking keep the following in mind:

  1. When you call the vendor do they answer on a land line or cell phone? Do they work at home?

A strong case can be made that a representative who is not in an office regularly will be slower at completing your requests. For example, rating your shipment requires factoring many things such as spot market trends, fuel, and mileage. While a smartphone is robust, it is not the same as a desktop. If your 3PL works from home chances are they are a sole operator and that could mean in event of an emergency backup is not readily available.  Your 3PL should have an office with employees that know who you and your freight are. 

2.  When you email the vendor a rate request how long does it take to get a response?

It should be no more than 30 to 60 minutes during regular business hours.  I would suggest finding a broker who will send rates after business hours too.  The rate sent to you should be accurate and the cost should not adjust after the load is moved unless the terms of the shipment have changed.

3.  Do they save the past shipment details?  How is their memory?

Your broker should have software that will save all addresses and store all shipment specifics.   When you mention that the shipment is the same as the last load, they should remember the load and mention the specifics from memory. 

4.  When a carrier is dispatched on your shipment does the carrier know the shipment specifics when they arrive?

Many of the problems that occur on a shipment can be discovered during the dispatch process.   Your broker should convey the shipment details accurately and the carrier should be aware of your specific needs.  If the carrier is not aware of your needs when they arrive then the dispatch process of your 3PL needs improvement.   Dispatch is one of the most basic but vital parts of their job.

5.  When service failure occurs what happens?

100% of the time your broker should have a backup plan in place so that in the event a pickup/delivery is delayed you will be taken care of.   If an unavoidable service failure should occur your freight broker should be honest and fair with all parties.  They should work on your behalf and not the carriers.  

6.  How do they invoice you and are the invoices accurate?

They should have multiple delivery methods for invoicing.  The invoice totals should match the quoted rates.   If the costs changed they should have notified you in writing at the point things changed.   You should have an opportunity to control your costs.  

These are six small indicators that can tell a lot about the freight broker you're dealing with.  Making a change is never easy and inevitably there will be some red tape and a small period of adjustment.  

Hopefully if you stick to these basics rules the change will pay off in the long run.   

Great Employees = Long Term Value

October 29, 2010 - 2:22 PM

So...I think I am ready to start seriously thinking about changing the business name.  Going forward I want to make sure the name/brand can evolve with the business as it continues to grow. I think the name should embody the traits in which have lead to my success. It should epitomize the basis for anyone wanting to be successful in the industry. Fundamentally I feel those traits are reliability, honesty, and fair pricing. The name should clearly embody our successful traits and should be something that my current and future employees can be proud of. 

There are many companies in the industry that have named their business based upon the "speed" of their services. I feel that by going that route we would fail to differentiate ourselves and ultimately we would fail at capturing our role in the industry. I feel our immediate role is to negotiate pricing, choose reputable carriers, and manage those carriers throughout the transaction.

The term "Freight Broker" carries a negative connotation with both customers and carriers alike. It is often synonymous with dishonesty and most of the negativity is deserved. There are many fly by night brokers, many of which lack the skill set to run a successful business of managing carriers and customers. The Motor Carrier Protection Act of 2010 could seriously change the marketplace and well positioned companies could stand to benefit from upcoming legislation. The development of employees by many major industry players is typically done in a manner in which there is little energy placed into developing a well-rounded employee. Too often more energy is focused on increasing transactional volume at whatever cost in order to grow the company's revenue. In my opinion a company built under the former carries less long term value than a company comprised of valuable employees that grow the company through training and developing like-minded individuals. In short great employees equal long term value. Great companies don't need to produce the most revenue or have the most employees.

My goals are to develop a solid base of core employees that branch out into small satellite offices mirroring what I have done here. The key is locating the employees and getting them to believe in the culture I've created. In my limited experience this quite difficult to do and we have our work cut out for us. Our current name, "Brad Eldeen Logistics, Inc" was never intended to serve as public entity and I believe the name could be hindering the hiring process. Therefore I believe it's time strategize and rebuild our brand.   Hopefully the new name and brand can carry us forward and attract those like minded employees.


Freight Forwarder vs Freight Broker

February 19, 2010 - 3:28 PM

Brad Eldeen Logistics is an agent for Network F.O.B. Below is excerpt from an article written by Network F.O.B. President, Tim Taylor

 

Network F.O.B is a freight forwarder, not a broker. There is an important distinction between the two.

Forwarders must adhere to Carmack amendment liability requiring proper claims handling. A forwarder has the same cargo claims and cargo insurance responsibility as that of a motor carrier. 

Brokers, on the other hand, do not have a statutory freight claims (Carmack) liability and can get by with contingent coverage (less than half the cost of primary coverage) because they're not liable in the event of a loss, absent negligence on the broker's part.  Brokers typically forward freight claims onto the carrier for handling.

The important part of the process here is responsibility and the approach to the application of that responsibility.

When a trucker uses a broker it's safe to assume that broker is not their bread-and-butter customer.  Whether that trucker  responsibly processes and pays a claim without being forced by a court of law sometimes is a matter of customer relations and, absent a true customer relationship, the outcome is not assured.

A forwarder, on the other hand, is not only more comprehensively covered by cargo insurance, but also willingly stands up for the customer and works diligently to resolve the issue with the motor carrier on the customer's behalf in a timely and satisfactory way.

A few key points to make in regards to accepting shipment:

Take photos before the shipment leaves your facility to ensure the condition of your freight prior to shipping. Take photos of the damaged material while it's still on the truck.

The bill of lading is an essential part of the claims the process.  When you notice damage open the box or inspect the equipment to avoid having a concealed damage claim after the driver leaves.  When you find damage note it on all copies of the bill of lading.  Many claims are dead in the water due to the driver leaving with a clear signed bill of lading.  

Make sure to save any parts or boxes that have been damaged.  The damaged goods are often the evidence of your claim.  Disposing the evidence can give the carrier or insurance adjuster a reason to deny your claim.

When in doubt call someone to help assess the situation.

Improved Truckload and LTL Rates

February 16, 2010 - 8:57 AM

Brad Eldeen Logistics is proud to announce our new tiered pricing effective April 2010.

Tier 1 Rates

The foundation of our business model has been built around servicing small businesses.   In Tier 1 many our clients shipments are never the same.   We understand that locating a carrier to provide regular and affordable service becomes complicated when you don't have the truckload volume of the bigger companies. Because BEL is the largest agent at Network F.O.B., we are able to leverage our buying power along with Network F.O.B.'s impeccable carrier payment into sourcing the best carriers at the most affordable freight rates. Clients are free to obtain guaranteed truckload or LTL rates via email, fax or phone.  We request that Tier 1 clients give BEL at least 1 day notice prior to requesting a pickup. 

Benefits Tier 1 Clients receive:

                -  Free Online freight estimates

                -  Paperless Invoicing

                -  Network F.O.B.'s Frequent Flyer Program

                -  Carrier Performance Evaluation

                -  Minimum $100,000 Cargo Insurance

                -  Managed Freight Claims

 

Tier 2 Rates

While we cater to small businesses on a daily basis many medium to large sized businesses can enjoy the service level of Tier 1 with reduced pricing based on shipment volume.   In Tier 2 many of our clients shipments typically originate from the same locations and can be tendered in advance.  Dependent on your companies truckload or LTL volume we will complete a free cost analysis.  In Tier 2 we can work with your existing carriers and find alternate sources in order maximize service and cost.  Through our Least Cost Routing system we can tender shipments directly to the best priced carriers in each lane.  Whether we handle the routing of all your shipments or we're the backup carrier or our primarily goal is to provide the best possible service we can. 

Benefits Tier 2 Clients receive:

                -  Free Online freight estimates

                -  Network F.O.B.'s Frequent Flyer Program

                -  EDI

                -  Paperless Invoicing

                -  Least Cost Routing

                -  Carrier Performance Evaluation

                -  Minimum $100,000 Cargo Insurance

                -  Managed Freight Claims

We look forward to servicing our existing clients and are excited at the opportunity of earning new business through our tiered pricing.  If you have freight that fits into either pricing scenario please contact Brad Eldeen at 866-700-0770 or at [email protected]

Price vs Service

February 9, 2010 - 4:26 PM

As you know we are not always the cheapest quote you receive on shipments as a large part of our pricing strategy is geared around providing exceptional service. Our rates could be lower however we find that we often sacrifice on time pickups and deliveries. One thing I've learned is that regardless of price the customer always expects exceptional service. Which is why one of things I've never been willing to sacrifice is our service level. Our commitment to service has been our guiding light for many years and has been one of the main reasons we've weathered this recession better than most of our peers. 

One of the areas we are going to start focusing on is obtaining more volume style shipments. A point to be made here is that I am going to assume that our service level is among the best you will receive among transportation vendors. If I may make that leap, one could project that our office could improve the service level on the shipments where the manufacturer is used to arrange the transportation. If this is true then we should talk more in regards to how we can work with you on these types of shipments. 

One essential part of the equation would be your willingness to allow us to know the manufacturers shipping rates. By doing this we can target our cost and evaluate whether or not we can handle the shipment at a reduced profit and not sacrifice our commitment to service. I believe that through this type of agreement we can both profit.  

I am sure you have some thoughts and when you have some time to digest please give me a call or shoot me an email.

Market Trends

April 13, 2009 - 3:18 PM

Hello, and welcome to our new website. We hope that through our site we can engage new and current clients. From time to time I plan on posting my thoughts and interpretations about the current market. I've been moving shipments for over 10 years. I've always felt that our business is on the front line and typically we're one of the first to see market changes. For the last three months I feel that we've been bouncing on bottom. All of our indicators point toward this conclusion. Rates and Fuel Surcharges have been consistent and truck demand has been low. In this climate our clients have benefited directly from our ability to quickly adjust pricing to the current market demand.

Typically as spring sets in we start to see changes in truck availability in the South East and the West Coast due to the impending produce seasons. As those areas begin to see an increased truck demand, we will start to see changes in virtually every truck market across the lower 48 states. Inevitably we're going to see some prices increase for Van loads. The Heavy Haul market will change as well. Construction and agriculture equipment start moving again in the North and Midwest. A good point to make here is that by giving us more notice on your upcoming shipments, will greatly reduce the possibility of service failures. It will also enable us to find best carrier and price for your shipment.

A concern we have for remainder of the year is trying to figure out just how many truck lines and drivers have left the market. If our hypothesis is correct only the strong have survived this recession. One can only assume that if truck demand or fuel prices increase we will see significant change in pricing. For an example of a past market condition similar to what could see, look back to 2004-2005. Truck demand and pricing were high and new carriers were entering the market daily. Our goal at that time was to find the best, most affordable carrier we could to meet your service requirements. Many of the business practices formulated in 2004-2005 we still use today. We start by interrogating a carrier's authority history, and looking for past issues that may reflect the carrier's commitment to service. After the carrier is tendered the shipment our internal systems are built to force potential service failures to the surface which has lead to 95% on time ratio in 2008!

Whatever happens in the coming year, we will continue to manage your freight the same way we always have — with honesty and superior customer service. Thank you for your business!

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