Freight Agents: Red Flags When Selecting a Broker
When selecting a brokerage partner, freight agents generally know what to look for. They look for a partner that offers a generous gross profit revenue split, capable support, and sufficient insurance. But, sometimes freight agents should pay less attention to what is there and more attention to what is not there. In particular, these red flags can help agents to know which brokerages to stay away from.
Red Flag 1: A Disconnected Team
In the transportation industry, teams rely on each other for information and support. Effective teamwork is an essential part of a freight agent’s success. In the transportation industry, nearly all companies are made up of virtual teams, with separate team members working hundreds or thousands of miles apart. With some team members on the road, and others working remotely, it’s essential to look at how cooperatively the team works together.
Red Flag 2: Outdated Technology
A company’s technology is often a reflection of its broader culture. Company’s that invest in the latest technologies frequently emphasize growth, innovation, and employee satisfaction. Outdated technology can signal a lack of efficiency and an unwillingness to change. Unfortunately, failure to invest in new technologies can cause some transportation companies to lose their financial edge and sink into obscurity. When investigating freight broker, agents should inquire about the software platforms and other technologies utilized by the company. Agents should avoid companies that appear to have actively avoided upgrades in technology.
Red Flag 3: Excess Focus on Gross Profit Revenue Split
The gross profit revenue split is a major factor for agents when choosing a freight broker. Unfortunately, many agents place too much emphasis on this singular factor. A favorable split can distract agents from other shortcomings that will cause problems down the road.
Red Flag 4: Poor Communication
As a freight agent, your success depends on your ability to communicate with the other members of your team. In the virtual teams common to the transportation industry, that communication can be a challenge. In fact, you’re likely to end up communicating less in person and more through technology. You should be sure that your team communicates regularly and effectively. Long distance teams, which aren’t well connected quickly, become dysfunctional in other ways. Poor communication is a major red flag and agents should be very wary of these circumstances.
When looking for a broker-partner, freight agents should perform their due diligence before making a final decision. But, rather than simply looking at the positive attributes of each company, agents should also look at the potential weaknesses. Instead of getting distracted by flashy “good deals,” agents should use a critical eye.