It seems that as long as there have been brokers and shippers there has been an adversarial approach to their relationships. This love hate relationship can extend to their carriers that serve both of them as well. What is it about brokers (or more politically correct, 3PL’s) that seems to engender such resentment and distrust? And more importantly, what can brokers do to correct that perception?
In the interest of full disclosure, I have been both a shipper and a broker (earning my CTB a few years ago) and have been exposed to both sides of the argument. As a shipper I recall not wanting to do business with brokers and my work colleagues calling it the dark side of transportation. I only dealt with asset based carriers and used brokers as a last resort option. As I broker, I recall shippers telling me (everyone has heard this one) that they don’t do business with brokers and C. H. Robinson is their biggest carrier. The apparent complaint from shippers about brokers was that when something went awry they were nowhere to be found and the shipper was left to deal with a bad situation and an unknown carrier. Or, better yet, the broker closes up shop after cashing your checks and the shipper is left being sued by the carrier for payment with courts upholding the carriers’ position to be paid. Another major issue is that shipper’s generally don’t penalize a potential new carrier when they have a bad experience, but when a broker screws up it seems that every single broker has to pay the price for that failure.
Recently, I had the opportunity to moderate a panel at the TIA Annual Conference titled “Overcoming Shippers Objections” which my panel and I subsequently subtitled “10 Things I Hate About You”. The panel consisted of two brokers and two shippers talking about the things that made them crazy about one another. Just to make things interesting, the audience participation was very vocal and actively contributed to the discussion.
While both sides made a number of valid points about what bothered them about one another, during the course of the discussion certain similarities became apparent. I’d like to share them with you:
- No matter how good you are, bad things will happen. It’s how you handle the bad things that establish the basis of your relationship.
- Honest and open communication on both sides is the only way a healthy relationship can be sustained.
- Brokers need to do what they do best…accessing the capacity that shippers don’t have the time or resources to procure. And, making sure those resources are safe, legal, and reliable.
- Neither party wants to waste time getting the run around. If shippers aren’t interested, quit dodging phone calls and emails and just tell them. And, brokers need to respect their position, though it is appropriate to see when a follow up would be entertained.
- No shipper wants to get caught in the middle of warring brokerage offices. If you have multiple locations that will be contacting the same shipper base, figure it out before you move forward. There are some larger brokers out there that are well known offenders and shippers just don’t want to deal with them.
- If you are unable to sustain a long term pricing arrangement, do NOT participate in an RFP where rates are required to be sustained for a year or longer. Nothing annoys a shipper more than a broker being awarded freight in a RFP and then backing off when the market moves up. And, on the flip side, shippers pulling back a load already tendered because they found a cheaper option.
We can (and did) go on and on about the issues that arise between shippers and brokers but the bottom line is we do need one another. Brokers have proven to be a valuable addition to a shipper’s transportation network. At NASSTRAC we encourage all of our members to vet brokers as conscientiously as they do their carriers. We also tell them to make sure the broker they are doing business with is a TIA member. TIA members adhere to a code of ethics and business practices that ensure you are doing business with a responsible business partner. TIA members that are members of NASSTRAC can also designate that they are TIA members on-line at the NASSTRAC Freight Resource Directory…a resource used by NASSTRAC members to source transportation providers.
I’d like to believe that shippers and brokers can get along…given the current transportation landscape, it’s important that we do.