When we are talking about trucks, some people might think about the big slow-wheeler creeping their way on the highway, but some people would also think of commercial supply chains, delivering shipments, and even potential business. Trucking companies and freight brokers are business models that contribute a lot to society, especially the supply chain that sustains modern societies.
Now today, we would learn more about the relationship between trucking companies, and freight brokers, why trucking companies would want to work together with freight brokers, and what are benefits for each of them. Here, you can also see our other dispatch course training for trucking, and brokers, if you are interested in becoming a trucking businessman.
Visit our website if you want to know more about truck dispatchers, how to become a professional truck dispatcher, how to start your own trucking company, and learn more at our dispatch course training for free. For now, let’s get into the discussion, shall we?
The Relationship and Work of Trucking Companies and Freight Brokers
To understand more about each of them and their relationship, first, we need to take a look at each of them, how their business model works, and how they manage to earn profits for each of them.
- Trucking Company
Just like the name, the trucking company is a Business Company that owns, or at least invests in trucks. The trucking company handles all sorts of things from delivering shipments, managing truck drivers, dispatching trucks, and so on. A trucking company doesn’t have to own trucks, but rather it can borrow or use other company trucks to make a profit before it can invest its money into trucks.
Trucking Company earns their money from contracts from the shippers that want to ship their loads somewhere. These contracts can be bought, and earned for them, meaning that they will have rights to deliver the shipments and earn profits from delivering them.
- Freight Brokers
Freight brokers are middlemen that come between shippers (people or businesses that want to deliver shipments of goods), and carriers (people or businesses that want to deliver goods). It is essentially helping to connect the supply chain, helping truck drivers, and trucking company owners to find shippers who have loading contracts for them.
For shippers, freight brokers offer their help to find truck drivers that can deliver their load, and for carriers, the freight broker provides new business ventures, and leads, helping their truck drivers to get more jobs, and income. In return, the freight brokers will have their share for each successful delivery.
Freight brokers are operated by hiring some individual brokers whose job is to match and find truck drivers or trucking companies for the shipments. These individual brokers would then get a brokerage fee from each successful load delivery. This brokerage fee is the margin of what they claim from both the shippers and the carrier, and it is mostly on the contract before they agree on their share.
Freight brokers in it are a pretty lucrative business venture, and with the rising demands for commercial trucking business, the freight brokers industry would also grow. In the US alone, by the time of 2018, there are more than 18.000 freight brokers that are active in the state, becoming an irreplaceable part of how the freight and trucking industries work.
The Relationship Between Trucking Companies and Freight Rokers
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There are many ways that freight brokers could help trucking companies, from providing additional capacity, providing more flexibility on their asset carriers, giving better networks and relationships with shippers, and so on. This way, freight brokers could easily handle the jobs that truck dispatchers would need to do, levitating a few of the burdens of the truck dispatcher.
Freight brokers can provide more additional capacity for trucking, especially during the increasing demands such as with the surge of the COVID-19 pandemic, and the Christmas holiday season. Brokers would also provide more flexibility on their assets and contract, bringing more shippers’ contracts along the way.
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