Avoiding Broker Pitfalls

by Katy de Vries

MARKHAM, Ont. – A healthy business relationship for both carriers and transportation intermediaries starts with a thorough background check. In fact, it’s key to avoiding future problems, says George Kuhn, executive director for the Canadian International Freight Forwarders Association (CIFFA).

“In a way it amazes me that carriers and owner/operators can put $250,000 into a piece of equipment but don’t bother to do the rest of it, like look into who their business partners are. Truckers are very sophisticated people and they should be sure to think ahead and be careful,” says Kuhn. “Admittedly there are good eggs and bad eggs in the basket of load brokers, but it comes down to the carrier being careful with whom he is doing business.”

Major pitfalls can occur when dealing with disreputable companies in any industry, some of those pitfalls in the transportation industry may be failure to get paid, failure to be profitable, disappearance of merchandise from a load, or bankruptcies, says Kuhn. But dealings with a good transportation broker should be painless, says Ralph Milne, president of Freightaudit Services Ltd., of Markham, Ont. The relationship should require very little in the way of sales and marketing effort and very little hand holding, he adds.

“If you’re dealing with a good and professional transportation broker, he is just that, he is good and he is professional,” Milne says

Milne points out load brokers have needs that are just as important as carriers’.

“In our case, we expect two things from a carrier, we expect the absolute truth and we expect the carrier to do what he says he is going to do, and they should expect the same from us,” Milne says.

He says communications are important. In other words, if a job cannot be carried out the way it was agreed upon, the carrier should tell the broker, and vice-versa, in order to avoid bad relations between all parties and unsatisfactory service to the end customer, which should be the prime concern of both carrier and broker.

“No one wants to have a relationship with a liar because it is symptomatic of deeper problems,” Milne says. “You shouldn’t find success on the back of some guy who doesn’t know how to run his business right, that is a short ranged strategy and it has no place in my office.”

Transportation intermediaries should be, and can be, a carrier’s best friend, he adds.

“They help a good broker find paying freight to put on an otherwise empty vehicle and if that isn’t being the motor carrier’s best friend at that moment of need, I don’t know what is,” Milne says.

Sam Cordes, president of SuperFr8.com, an online matchmaker service, says companies like his can also act as a go-between for carriers, shippers and load brokers. Truckers and shippers can even talk directly to each other using SuperFr8.com’s services.

“In our case, we don’t get involved in the payments at all and the shipper pays the trucker directly so there is some accountability there, we help eliminate the possibility of not being paid for the load,” says Cordes.

And the system also includes a feedback profile option, which invites users to leave feedback about the carrier, or broker they’ve used.

“If they get too many bad references they will virtually disappear off the system,” says Cordes.

According to Cordes, there is at least one broker credit directory out there, called the Red Book, where over 4,000 brokers are listed, but the problem is that broker turnover and infrequent publishing updates makes the listing an unreliable credit-worthiness resource.

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