Executive Briefings

Leveraging the Benefits of Transportation Brokers

Transportation brokers play an important role in the supply chain, but they often do not receive the respect they deserve, says Robert Voltmann, president and CEO of the Transportation Intermediaries Association.

"Brokers bring many benefits to shippers and carriers and they serve both," says Voltmann. In addition to bringing their knowledge and expertise to the task of matching shippers with carriers that best meet their needs, brokers also invest in technology that can be leveraged across a large customer base. One of the biggest advantages to shippers is that brokers typically pay the carrier's invoice and then collect from the shipper. "In this way a shipper can have product moved to market and possibly sold before it has to pay for the transport. That is a powerful opportunity," Voltmann says.

He acknowledges that fraud has been an issue with the freight brokerage industry but says that "there is a tremendous amount of fraud in the transportation industry as a whole." He faults the Department of Transportation for failing to actively enforce regulations. "The DOT has basically stepped off the field," Voltmann says. "If your check clears, the DOT will give you whatever authority you want." He notes that it is not uncommon for DOT to issue 20 to 30 motor carrier numbers to the same address. "When you have 20 to 30 carriers licensed to a single person a shipper might give a load to carrier A, which brokers it to carrier C, so the shipper pays carrier C. Two weeks later somebody else grabs the load and it turns out they are associated with carrier A. They have now parked the truck or taken the goods to a warehouse and are demanding payment for both loads."

TIA advises companies to make sure they are dealing with legitimate companies by having a qualification framework in place. "This is the market to put such steps in place --when trucks are plentiful and freight is scarce."

To view this video in its entirety, click here.

"Brokers bring many benefits to shippers and carriers and they serve both," says Voltmann. In addition to bringing their knowledge and expertise to the task of matching shippers with carriers that best meet their needs, brokers also invest in technology that can be leveraged across a large customer base. One of the biggest advantages to shippers is that brokers typically pay the carrier's invoice and then collect from the shipper. "In this way a shipper can have product moved to market and possibly sold before it has to pay for the transport. That is a powerful opportunity," Voltmann says.

He acknowledges that fraud has been an issue with the freight brokerage industry but says that "there is a tremendous amount of fraud in the transportation industry as a whole." He faults the Department of Transportation for failing to actively enforce regulations. "The DOT has basically stepped off the field," Voltmann says. "If your check clears, the DOT will give you whatever authority you want." He notes that it is not uncommon for DOT to issue 20 to 30 motor carrier numbers to the same address. "When you have 20 to 30 carriers licensed to a single person a shipper might give a load to carrier A, which brokers it to carrier C, so the shipper pays carrier C. Two weeks later somebody else grabs the load and it turns out they are associated with carrier A. They have now parked the truck or taken the goods to a warehouse and are demanding payment for both loads."

TIA advises companies to make sure they are dealing with legitimate companies by having a qualification framework in place. "This is the market to put such steps in place --when trucks are plentiful and freight is scarce."

To view this video in its entirety, click here.