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We are in a trucking recession and its impacting the whole industry.

Consumer demand is lower and profits are thin. And unfortunately, the freight industry outlook for 2024 does not look ideal. 

Shippers remain in control with more market power than they did in 2022 causing carriers and brokers to negotiate contracts to maintain volume.

With the right strategies in place, you can weather the down market and come out even stronger on the other side. 

In this blog post, we'll cover 10 things that you should keep in mind during the trucking recession. From staying up-to-date on market rates to embracing technology, these tips can help you navigate the challenges of a loose market and come out on top. So if you're a freight broker looking to stay afloat, read on for some things to keep top of mind. 

1. Stay informed of market changes 

Economic conditions can have a significant impact on demand for shipping and transportation services. This can affect the rates that you are able to negotiate with carriers, as well as the availability of capacity. 

By staying informed about market conditions, you can make more informed decisions about which carriers to work with, lanes to prioritize, and how to price services. 

There are several ways to stay up-to-date and keep a pulse on the market. 

• Monitor industry news and trends: Follow news sources like FreightWaves, The Freight Coach Podcast, Transport Topics, and Truckers Forum.
• Use data and analytics tools: Software tools help you track market conditions, such as supply and demand trends, carrier rates, and shipping volumes.
• Monitor business performance: Key business metrics like average days sales outstanding and fastest or slowest paying customers can give you a snapshot of business health. With regular monitoring, you can make any necessary adjustments to your operations.  
• Talk to carriers and other industry partners: Proactively engage carriers and other partners in industry discussions to gain valuable insights and perspectives on market conditions.

2. Diversify your customer base 

Diversifying your customer base is not only good business advice, but critical in today’s market. 

Relying heavily on a single customer or a small group of customers can put your freight brokerage at risk. If that customer goes out of business or significantly reduces their shipping volume, it could have a major impact on your revenue and cash flow. 

A diverse customer base provides your freight brokerage with a more stable source of revenue and you are less reliant on any one customer or even industry. This can help to ensure the long-term viability of your business.

3. Don't be afraid to negotiate.

During economic downturns, demand for shipping and transportation services decline, which can lead to excess capacity in the market. This can put downward pressure on rates and hurt your bottom line. 

Contracts and rates put in place during different freight conditions should be re-evaluated during a freight recession. Are there new terms that could be favorable to both parties in today’s economy? By renegotiating rates with carriers, clients, and partners, you may be able to secure more favorable terms and improve margins.

However, it's important to maintain good relationships with your carriers and to be fair and reasonable in negotiations. When the freight market picks up and you need to move freight, you’ll be thankful for those strong relationships.  

4. Keep an eye on expenses

Three quarters of freight brokers use accounting software like QuickBooks, Freshbooks, or NetSuite according to our recent report. This year, you will likely be getting more familiar with those platforms. 

In this environment, it is especially important to control expenses and keep them as low as possible. Regularly checking on expenses and revenue help mitigate any surprises and help you make the best decisions in terms of expense cutting.  

This may involve negotiating higher rates with shippers,  lower rates with carriers, or streamlining operations to dedicate more employee time to revenue-generating activities. By taking a proactive approach to cost management, you can increase your chances of weathering the economic storm and emerging on the other side.

5. Look for new opportunities

A recession can also bring about new opportunities otherwise not considered.

In a downturn, some segments of the market are less affected than others. For example, rising inflation is shifting consumer spending from consumer technology, clothing, and cosmetics spending to necessities like groceries and household goods. The shift in demand could mean new business for your freight brokerage. 

Similar to change in demand, more manufacturers and companies are reshoring or nearshoring in 2023. Production is moving away from Asian countries to the Mexico/U.S. border or within the U.S and 62% of manufacturers have already begun the process, according to Deloitte's Future of Freight Research. Respondents of the survey expect agriculture, apparel, and consumer electronics to see supply lines being reconfigured the most. 

This trend will redraw the transportation map generating new lanes and opportunities for your brokerage. 

By identifying high-demand markets and new production regions, your brokerage can create new opportunities for your brokerage. 

6. Embrace technology

Not utilizing technology in today’s market is a grave mistake. 

Software and online platforms support almost all facets of a business from streamlining operations to improving customer support. 

Transportation management systems, digital freight matching, accounting software, and financial enablement platforms (like Denim) can help your freight brokerage run smoothly. But to get the most out of them, evaluate your tech stack for integration opportunities. When systems work cohesively, your freight brokerage can reduce hours of manual entry. 

For example, Denim integrates with TMS systems like TAI, EZ Loader, and Ascend enabling freight brokers to book loads and submit for invoicing and collections with a single click.

Developing the right tech stack for your freight brokerage can not only support your business but optimize it for success this year. 

7. Stay in touch with your clients 

Good communication is key during a loose market. Providing a white glove service can be the difference between winning a new lane or being cut. 

Regular communication with clients helps build trust and establish long-term partnerships. This includes sending progress updates on a shipments pickup, transit status, delays, and delivery. An open line of communication makes asking for additional business or referrals easier on both sides. 

A client relationship does not end when a shipment is delivered. Your freight brokerage should promptly invoice clients with a professional and clear document detailing the shipment. This can be handled by automation and should not be done sloppily. Post-shipment is also a great opportunity to ask clients for feedback or leave a review for your business.  

By staying in touch with clients, you build a rapport and have the opportunity to identify opportunities to improve your service.

8. Be proactive

Competition is going to be high this year. And the truth is, not everyone will make it. Those that put in the effort will not only survive the downturn and emerge resilient for years to come. 

By being proactive, you can identify new opportunities to grow your business, such as by expanding into new segments or markets, offering new types of services, or embracing new technologies. Proactiveness will likely put your brokerage ahead of the competition and improve responsiveness to changes in the market. 

Ultimately, being proactive is an important part of building a successful and sustainable business in the long term.

9. Get your mindset right

It's easy to get discouraged during a loose market, but try to stay positive and focus on the long-term. Remember that economic downturns are usually temporary and the market will eventually bounce back.

In fact, positivity can be a business advantage. 

A positive attitude can also help you build strong relationships with clients, carriers, and other industry partners. By remaining positive and optimistic, you can inspire confidence and build trust, which can be critical to your success.

Positivity breeds creativity. By approaching challenges with a can-do attitude, you can be more open to new ideas and more likely to find innovative ways to overcome obstacles.

10. Seek support

Good news: this isn’t the first-ever freight recession. 

Many freight brokerages survived the 2019 recession, and are willing to help new and growing brokers. So don’t be afraid to reach out to industry groups or seek the advice of a mentor or colleague. 

Industry organizations can provide valuable resources and support, such as industry news and analysis, access to networking events, and professional development opportunities.

The freight and logistics community is eager to help one another. Remember, you are not alone and  have a range of options available to you to help navigate the challenges of an economic downturn.

Whether you are a 100-person freight brokerage or a new broker, we are all feeling the effects of the freight recession and this year will not be easy. However, with challenges come new opportunities to diversify and try new strategies. Through this loose market, your freight brokerage will emerge stronger and more resilient than in 2023. Remember to seek new opportunities, keep expenses low, and maintain a positive outlook. 

Welcome to 2023! As we begin the new year, it's important for freight brokerages to stay ahead of the latest industry trends. Here are 8 predictions that freight brokerages should keep an eye on in the coming year. From the increasing adoption of technology to the evolving regulatory landscape, these trends will shape the way freight brokerages operate and compete in the market. Freight brokers that are looking to improve, become smarter, and embrace these trends will not only survive but thrive in the competitive and constantly evolving market of 2023.

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Prediction: Look towards diversifications, consolidations, and advancement in middle mile visibility & technology.

In recent years, shippers all over have been turning to regional final mile carriers to increase efficiencies in their supply chain. Now, many of those same brands will look to do the same with their middle mile. Diversifications, consolidations, and advancement in middle mile visibility & technology will play a big role in 2023. 

This could involve shippers partnering with a wider range of regional carriers to increase efficiency and flexibility in their supply chain, or larger carriers expanding their middle mile operations to serve a greater number of shippers. Consolidation, on the other hand, could involve smaller carriers joining forces with larger ones to gain access to new markets or expand their capabilities.  Additionally, as stakeholders demand greater transparency and real-time tracking throughout the supply chain, companies will need to invest in technology solutions that can provide this level of visibility. 

‍Anthony Curreri

Founder & Chief Executive Officer at Roadly Logistics

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Prediction: Connected platforms and ecosystems in supply chain logistics will begin to gain mind-share in 2023 - affecting everything from network design and management, to payments.

With the announcements of AWS Supply Chain, and Microsoft Supply Chain Platform, and similar initiatives underway at Google Cloud Platform and Oracle, more people and organizations in supply chain logistics will begin to see the potential for connected platforms in logistics to create immense value for beneficial cargo owners. It will take time for such platforms to reach full maturity, but in a world that is becoming more volatile, uncertain, complex, and ambiguous, beneficial cargo owners need to participate more directly in managing their freight and logistics supply chains from end-to-end - that will serve as an accelerant for the development of such platforms AND it will be a boon for logistics technology startups with mature products that solve specific problems that the big tech behemoths can't solve.

‍Brian Laung Aoaeh, CFA

Founder & Managing General Partner, REFASHIOND Ventures

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Prediction: The truckload market will remain stressed through the first half of 2023, but it's still a great time to be a broker. 

The benefit of brokerage is that it's always an optimal market for growth. When supply is tight, brokers have the ability to drive volume to good, reliable carrier partners. In a market flush with excess capacity, brokers fill the need of pairing high volume shippers with the right carriers. The pricing strategies change, but the value remains balanced between strong carrier and customer relationships. 

Additionally, now is the perfect time to diversify your mode mix. We're seeing LTL carrier rates beginning to fall and the focus shifting to volume. Brokers offering both TL and LTL options can minimize revenue impacts during a down market. 

‍Brandon Dean

Vice President Sales at Quote Factory

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Prediction: Higher expectations for visibility.

From the driver to the customer, supply chain stakeholders have higher than ever standards for what they expect in terms of visibility. In 2023 this standard will only increase. The market wants insight into supply chain movements and technology partners will have to rise to the occasion. This includes real-time tracking of shipments, updates on delivery status, and access to information about the location and condition of goods. 

To meet these higher expectations, freight and logistics companies will need to leverage technology to provide stakeholders with the visibility they demand. This may involve implementing tracking systems, investing in advanced software solutions, or partnering with technology providers who can offer the necessary visibility tools.

‍Jayson Peterson

Vice President of Strategic Alliances, Turvo 

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Prediction: Freight brokerages will focus on operations to mitigate supply chain volatility.

To better manage supply chain volatility, companies must prioritize lead time management, cycle time reduction, and visibility and collaboration in 2023. Lead time — the amount of time a broker gets before the ship date of a load — is critical. The more lead time a broker secures on a shipment, the better the rate and service for the customer. 

Having a transparent, efficient process for load cycles and over-communicating will allow companies to handle volatility more effectively. For example, a broker should explain a rate change for a same-day shipment in a market with limited capacity. GPS tracking also encourages visibility and more efficient collaboration, eliminating the back-and-forth between shippers and broker agents trying to determine a truck’s location for pick up or delivery.

‍Ashley McMillan 

Senior Sales Manager at Denim 

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Prediction: Growing interest in cybersecurity. 

With industries focusing on digital transformation initiatives — particularly in the logistics sector — companies are increasingly susceptible to security and data risks. These aren’t sophisticated attacks, either. Bad actors are casting wider nets to capture sensitive information from many freight companies because they know they don’t have continuous security monitoring or employee cybersecurity training. In 2023, cybersecurity will come to the forefront of the freight-tech conversation. We will see large and even small freight brokers only partner with technology companies with cybersecurity protocols in place.

‍Sean Smith 

Head of Product at Denim

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Prediction: The rise of SmartBrokers empowered by broker tech stacks including financial enablement platforms, will put pressure on the entire industry to evolve.

SmartBrokers often have a strong online presence, with user-friendly and intuitive websites or platforms that allow shippers to easily book and track shipments. They may also make use of data analytics tools to optimize routes and negotiate the best rates with carriers, and might even utilize artificial intelligence to automate certain aspects of the booking and dispatch process. In addition to these technological capabilities, SmartBrokers prioritize effective communication with both their clients and carriers, ensuring that all parties have timely and accurate information throughout the shipping process.

Overall, the goal of a SmartBroker is to provide a seamless and efficient freight brokerage experience that exceeds the expectations of both their clients and carriers.

‍Fritz Lauer

Head of Marketing at Denim

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Prediction: Mergers and acquisition activity will increase in the freight space. 

“I expect we’ll see a significant influx of M&A activity next year, largely due to valuations being significantly down overall. It's an ideal time to buy companies at a lower price. The vast majority of the market is bleeding through its last round and will have a tough time raising its next one. In 6-12 months, we’ll see many flat and down rounds, forcing conditions to worsen before improving. Companies with sufficient cash flow or profitability will be well positioned to buy companies at a great price and supercharge their growth.

‍Bharath Krishnamoorthy

CEO at Denim 

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Freight and Logistics in 2023

2023 is shaping up to be a year of significant change and innovation in the freight and logistics industry. From the increasing adoption of technology to the evolving regulatory landscape, it's clear that the status quo is no longer sufficient for companies looking to succeed in this competitive and dynamic market.

The key takeaway for freight and logistics companies in 2023 is the importance of shifting conventional mindsets and developing solid supply chain and logistics strategies that align with the current landscape. This may involve embracing new technologies, partnering with innovative service providers, and continuously adapting to the changing needs and expectations of stakeholders.

Staying up-to-date on the latest trends and being willing to take calculated risks and make necessary changes is paramount for freight and logistics companies to position themselves for success in the year ahead. It is crucial for companies to stay agile and proactive in order to thrive in this exciting and rapidly-changing market.

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Freight brokerages were quick to adopt technology during record-setting COVID-19 demand. 

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But, the economy is in a very different place as we look towards 2023. Freight brokerages are facing plummeting spot rates, high inflation, and low consumer demand for goods. 

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Investing in freight broker technology, while previously an optional “nice-to-have”, is  now paramount for success in 2023. Savvy freight brokerages are prioritizing technology to survive and even thrive in a soft market. 

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FreighTech is playing a crucial role in maximizing efficiency, enhancing customer service, and bolstering competitiveness for savvy brokers already like Direct Expedite and Scale logistics, and will continue to for years to come.

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Improve Efficiency and Productivity with Automation 

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Anyone working in the logistics industry knows time is money. 

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Many brokerages were positioning their strategy for growth in 2023, but are now facing a reduction in personnel budget. In the absence of new employees brokers can rely on technology to boost productivity and efficiency within a team. 

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In fact, more than half (52%) of respondents in Denim’s Freight Brokerage Pulse Report indicated they are prioritizing increasing overall efficiency in 2023. 

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Automation and efficiency go hand-in-hand. Mundane tasks like creating and submitting invoices are ripe for automation. Freight brokerages are prioritizing automation technology to free up employee’s time for revenue-generating tasks while also boosting morale. Who really wants to be a data-entry machine? 

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Solutions like Denim streamline freight brokerages back-office operations through automation. With a single click from a broker’s TMS, Denim will invoice, collect, and pay contractors. Ultimately, the automation benefits shippers with consistent and timely billing, carriers with fast payments, and your staff with reduced data entry.

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Why does it matter in 2023? 

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Lower consumer demand equals less freight. Winning freight will require more prospecting hours, a winning sales strategy, and a large focus on building lasting relationships. By automating mundane tasks, brokerages can shift their focus to provide the best customer service while freeing up staff for more business-critical needs. 

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Enhance Customer Service with Visibility Software

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Customer service is what differentiates traditional freight brokerages from their digital counterparts. This is even more important in a shippers market. Customer service for brokerages means transparent communication with both shippers and contractors. 

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Knowing the status of shipments in real-time means everything for a brokerage. Freight visibility keeps customers informed while reducing time-consuming communications like check calls. 

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MacroPoint and Project44 are excellent examples of visibility platforms. Both platforms equip freight brokers with real-time updates on shipments and route information.  

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Brokers not only need to provide excellent customer service for their shippers, but also their preferred carriers. Shippers work with brokers with the largest and most reliable network of carriers.  

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Carriers are facing high diesel prices and maintenance inflation costs. Cash flow is tight right now. Freight brokers can keep carriers loyal and happy through transparent and fast payments. 

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Financial enablement platforms like Denim offer QuickPay at no cost for the brokerage. Freight brokers can choose to pay next-day at no cost or charge a quickpay fee to their contractors. 

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Additionally, Denim provides contractor onboarding and dashboard. Denim's onboarding collects payment and billing information from carriers in 3 simple steps. This eliminates the need for freight brokerages to manage or store sensitive information. After set-up, carriers can track payments and find proof of ACH on their own dashboard. 

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By providing these services, freight brokers can build trust, reduce carrier payment check calls, and provide a professional service to their carriers.  

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Why does it matter in 2023? 

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In 2022, the industry shifted from the carrier to a shipper market. Lower demand and a surplus of carriers means shippers have the opportunity to be more selective with their business. Providing a superior customer experience helps freight brokerages stand apart from the competition. 

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Staying Agile with Business Intelligence Tools

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There’s no doubt 2023 will be a competitive year for freight brokers. Many expect the spot market will bottom out in the first or even in the second quarter, but only time can tell. 

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Instead of a crystal ball, freight brokerages rely on data to identify the most lucrative shipping mode, loads, and rates. Real-time data arms freight brokerages with the information needed to  better respond to market fluctuations.   

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Through transportation management software freight brokerages can manage their operations more efficiently.  The platform manages a brokerage's shipment tracking, route planning, and payments when integrated with a factor.  Ascend, TAI, and EZ Loader are few examples of integrated TMS.

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During times of uncertainty, freight brokerages need to keep an eye on important business metrics. Metrics like accounts payables, receivables, and profits can show the health of a business.

Freight brokers can integrate their accounting software with a payments platform to track financials. No calculator needed 

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Denim's Quickbook integration provides freight brokers with a Business Analytics Dashboard. The dashboard compiles data on jobs over time, average days sales outstanding (DSO), fastest-and-slowest-pay customers, most profitable customers, and most used contractors. These insights help freight brokerages optimize operations and make better business decisions.

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Why does this matter in 2023? 

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Business intelligence tools help freight brokerage stay resilient in the face of uncertainty. Tracking trends and business health equip freight brokers with information to respond quicker to market changes and make data-driven decisions.  

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Are You Ready for the Growth of Freight Broker Technology?

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Many exciting developments have come out of the supply chain's digital adoption trend, but this is just the beginning. Experts anticipate further developments, such as blockchain-based shipment tracking. Leading freight brokers are already investing in tech strategies to stay ahead of the curve. 

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Not sure where to start with your technology shift? Begin by pinpointing key opportunities to scale, reduce costs or improve profitability for your brokerage. The chances are that an enterprise software suite exists to help you achieve your goals. 

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If you're interested in learning more about how Denim can streamline your operations, we’d love to talk. Schedule a demo today!

Access to working capital is not the only benefit of freight brokerage factoring. 71% of brokerages making $2 million or more in monthly revenue use invoice factoring, according to our recent report. Even enterprise brokerages, who likely don’t need working capital, choose to factor.

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Why? 

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Because factoring for freight brokerages provides protection against partnering with risky shippers and improves carrier reputation. 

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Protecting your brokerage relies heavily on operating with a solid reputation. It only takes one customer that can’t pay their invoices to dry up your network.

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The better your reputation, the better partnerships you'll obtain. The freight market is soft right now. You can't afford to work with the wrong shippers or lose trust with carriers.

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You need to grow a big network of qualified shippers and carriers so that you're ready for anything. Denim can

help you do that faster and more effectively. ‍

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Vet Your Shippers

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Unfortunately, freight brokerages are not immune to scams (like double brokering), fraud, and deception. You want to make sure you’ll receive payment before booking a load or contracting a new lane.

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When your network consists of shippers with bad credit, your entire business becomes vulnerable.  Payment recovery issues can hinder your growth and ultimately hurt your image. 

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It only takes one non-payment from a shipper to undo a strong carrier network. 

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While due diligence helps, it can only mitigate some risk for your freight brokerage. Factoring with Denim protects brokerages with unlimited shipper credit checks.

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Denim's Solution

• Denim offers free, unlimited shipper credit checks, so you can assess the risk. 
• You can rest easy knowing you’re protected with unlimited shipper credit checks on all your prospects.

“Denim’s underwriting helped SCALE Logistics take the risk out of her business by credit checking her customers. Shay Lynn Dixon said ‘it’s like having your own CFO.’”

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Lower Your Days to Pay

High diesel prices and inflation costs are straining carriers profits and business. 

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Carriers are going to prefer brokerages that pay the fastest, regardless of your shippers terms. No one likes chasing down receivables, and slow payments will inevitably cause your carriers to lose trust. The net-30 days of the standard of the past is obsolete in today’s digitized environment.

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Factoring for freight brokerages can lower their days to pay carriers without impacting cash flow. Carriers will learn that you’re an honest and reliable broker and be more willing to work with you. 

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Not only does lower days to pay strengthen carrier relationships, it improves your credit. Staying as up-to-date as possible makes life easier for you and your carrier network. The logistics industry is big, but your corner of it is likely small enough that everyone talks, so prioritize performance that boosts reputation over anything else.

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Denim's Solution

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Nobody should have to waste time getting paid for a job well done. That's why Denim helps you lower your days to pay to as little as 24 hours. 

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Denim offers all clients free QuickPay, which means carriers are funded within 24-48 hours. There's no cost to you for the use of Denim's QuickPay service. Brokerages can choose to offer this service for a fee to carriers or not. 

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“Since working with Denim, Direct Expedite has become known as ‘the guys who pay their carriers within 48 hours of delivery.” 

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Grow Your Qualified Carrier Network

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Shippers want to work with freight brokerages with a strong and reliable carrier network. So in order to obtain new business, you need to grow and maintain a qualified carrier network. 

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Growing a carrier network doesn’t happen overnight. But how do you do that optimally?

There are thousands of brokers that carriers can decide to work with, so it’s important to emphasize your value. 

• Humanize your brand by sending holiday gifts and checking in on carriers' wellbeing. 
• Specialize in a niche market for a unique connection with carriers. 
• Be transparent on payment status by offering a contractor dashboard.

 As a growing freight brokerage, getting carriers to work with you over the competition is a huge obstacle in building your business. But, by setting yourself apart, you can begin to build your carrier network and stand out.

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Denim's Solution

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We provide a two-pronged approach to growing your network of qualified carriers.

• Pay quickly: Pay out shippers in as little as 24 hours and eliminate time-wasting follow-up from carriers about payment.
• Build trust with carriers with Denim’s contractor dashboard: Carriers can upload sensitive data like bank information and addresses directly into their contractor dashboard. This ensures information is secure while establishing trust between carriers and brokerages.  

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5 Ways Denim Helps Immediately

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While factoring for freight brokerage is largely associated with maintaining working capital, there are other great benefits factoring with Denim has to offer. 

1. Pay your carriers faster, boosting satisfaction and trust.
2. Grow your network of carriers, so loads are delivered on time.
3. Vet your shippers through free, unlimited credit checks.
4. Prevent any loss in this soft market by reinforcing your network.
5. Protect what you've built, so you don't have to put out fires later.

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Put up a strong logistics defense with factoring from Denim.

The demand for freight brokerages has never been greater as shippers face increasing pressure to lower costs while offering faster delivery. 

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A recent report by Allied Market Research supports this claim, valuing the global freight brokerage market at $48.1 billion in 2021 and estimating revenues will reach $90.7 billion by 2031 at a compound annual growth rate of 6.3% from 2022 to 2031. The report attributes this significant growth to a variety of factors, including a rise in demand for cost-effective ways to ship goods faster and safer and an increased demand for tech-driven logistics services. However, rather than making the necessary investments themselves, shippers are looking for partners that can meet their needs.  

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Freight brokers today must invest in technology moving forward to remain competitive in a growing but tight market. Technology adoption and the data that comes with it has the opportunity to completely change the way freight brokers operate. As a result, more and more companies are implementing technology to transform their businesses. A Deloitte and MHI study of 1,000 manufacturing and supply-chain industry leaders found that in the next five years, 82% of supply-chain companies plan to adopt predictive and prescriptive analytics, while 22% are already using the technology. 

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It has become clear for many in the industry that the path to success means investment in better business management tools. But, regardless of what those tools look like, how brokers collect and use the data associated will be key to maintaining a competitive edge. However, with so much freight data coming in, it can be challenging to decipher what is of actual value. 

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In this article, we will explore why you should care about business analytics as a freight broker, what metrics you should consider, and how to use those data points to improve your business operations. 

Making your carriers feel valued is crucial to building trust, so it is always a good investment to show some gratitude. Leave your carriers with the motivation to hit the road at full speed with these gifts for truck drivers.

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The Importance of Valuing Your Carriers

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Here are just a few benefits of investing in carrier relationships and showing that you care:

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Build Trust

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People naturally trust those who show they care. This is why, in order to grow your network of reputable carriers, you need to show that you appreciate them and build that relationship of trust. The relationship between brokers and carriers goes both ways. 

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‍Limit Turnover

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To do your job well as a broker, you rely on having carriers you can trust to get the job done. Because of this, losing a carrier is never easy. By showing your carriers that you appreciate them, you can limit this turnover. SCALE Logistics, one of our clients, has never lost a carrier because they understand how important these relationships are!

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‍Boost Your Brand

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In a sea of freight brokerages, it’s more important than ever to have a competitive edge. One way to stay competitive is to treat the people you work with well. Shippers want to work with brokers with a good reputation and one way to maintain a good reputation is to have carriers that enjoy working with you.  

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Attracting and maintaining the best talent is a huge predictor of success. Business owners who see their drivers as simply a cost will pay the price in reduced performance and growth.

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Now that you know why appreciating your carriers matters, let’s look at some ways you can do that this holiday season.

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1. Consider Your Carrier’s Route

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While you might not be able to control how many hours your carriers spend on the route, you can consider offering backhauls to get them home during the holiday season. Ask your carriers where “home” is for them and work your routes around their preferences when possible. 

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Brokers who go this extra mile typically make deep connections with carriers and those connections can help you grow your freight brokerage.

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2. Send a Personalized Thank You Note

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When you write a thank you note by hand, it's a meaningful gesture that carriers will notice. Taking the time to acknowledge their hard work with a personal touch—like mentioning how they expertly navigated a last-minute route change or worked tirelessly through the night—shows that you see and appreciate their specific efforts.

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Adding your own signature, or that of another high-level executive, adds an extra layer of personal recognition. Making this kind of appreciation a regular practice can greatly enhance your relationship with your carriers, fostering a sense of loyalty and mutual respect.

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3. Incentivize Feedback

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As a freight broker, you are always trying to get better and improve your brokerage. One way to do this is to incentivize feedback from your carriers.  

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Quarterly surveys are an excellent place to start. You can ask your carriers for anonymous feedback on what it’s like to work with you and if there is any room for improvement. 

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An easy jumping-off point is the three questions below, which almost any concern will fall into:

• What are we doing well?
• What can we improve?
• What else is on your mind?

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4. Public Recognition 

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Publicly recognizing your carriers' exceptional work through company newsletters, social media, and industry publications showcases their dedication and amplifies their success across the logistics community. 

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A social media shout-out or a feature article can highlight their achievements, such as perfect delivery records or creative problem-solving, spotlighting the individuals who keep your freight moving. 

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This form of appreciation fosters a sense of pride. It encourages a culture of excellence that benefits everyone involved—carriers feel valued, and your company demonstrates its commitment to partnership and quality service.

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5. Offer Wellness Days

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We all need to prioritize our mental and physical health and your carriers are no different. In fact, after long days of hauling, carriers need to focus even more on their wellness. 

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Offering your carriers things like massages, specialty fitness classes, or other wellness gifts is a great way to show that you prioritize their well-being.

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6. Trucker Gifts and Gift Cards

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Showing appreciation to your carriers with thoughtful gifts or gift cards can make a real difference. Practical items like quality travel mugs or seat cushions can make their long journeys more comfortable, while gift cards from truck stops allow them the flexibility to refuel their trucks and themselves on the go. 

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Choosing gift cards from their favorite restaurants or retailers adds a personal touch that recognizes their hard work throughout the year, letting them know they're a valued part of your business as the festive period gives way to a new year of continued partnership.

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7. Investment in Carrier Development 

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Investing in your carriers’ skills is another way to show you value them. Training on new regulations, safety, or technology helps them do their job better, improving your business. It’s a win-win: carriers get to upskill, and you get a network of top-notch professionals who are up-to-date with the industry standards.

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8. Appreciation Events 

You could host a driver appreciation dinner or luncheon if you work with local drivers. These events are a chance to relax and celebrate the hard work that carriers do. 

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You can make these gatherings extra special by giving out awards for exceptional service. It’s a way to show carriers that you see and value their hard work and dedication beyond just the day-to-day business. 

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9. Celebrate Milestones (Big & Small)

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Celebrating milestones is a great way to show appreciation throughout the year, not just during the holidays. You’ll likely start by celebrating major milestones, but you can also celebrate smaller milestones, too! 

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Celebrating these milestones will keep your carriers engaged with your freight brokerage and continue to value your broker-carrier relationship. 

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10. Have a Winter Gear Giveaway

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Truckers deal with winter challenges more than most, so why not give them high-quality, well-insulated hats, jackets, and other winter gear? Most carriers would appreciate name-brand (non-branded) gear like Patagonia or The North Face. They’ll have your brokerage in mind every time they put on their new jacket or gloves!

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11. Network Introductions

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Lastly, networking opportunities are key for carriers to grow and connect with others in the industry. As a broker, you can help by setting up events where carriers can meet potential clients like shippers and warehouse managers. 

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This isn’t just about finding new business; it’s also about sharing knowledge and strengthening the supply chain. By helping carriers network, you’re showing you care about their growth, not just the business they bring you.

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Make Your Carriers Feel Special

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These tokens of gratitude are a few ways to make your carriers feel special this holiday season. A freight broker is only as strong as the relationships they have with their carriers, so make sure your carriers feel appreciated. With an extensive network of carriers, you’ll be able to attract top-tier clients and begin to broker their loads. 

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Sending holiday gifts isn’t the only way to make your carriers feel confident working with your brokerage. In addition to the above suggestions, ensure that you are paying your carriers on time and communicating with them frequently. Contact us today to learn more about how Denim can help you nurture your carrier relationships. 

Not all factoring solutions are created equal. 

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Freight factoring is an excellent solution if you're looking to leverage your business's working capital to attract more clients and build strong relationships with carriers.

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But which type of factoring is best for you?

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There are two common types of freight factoring:

1. Recourse
2. Non-Recourse

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The primary difference between the two options is who bears the responsibility in instances of non-payment. However, this distinction introduces nuances that can significantly affect your business.

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It’s worth understanding both types. Not bearing responsibility doesn’t necessarily mean you’re getting the best contract term. In fact, it could be costing you.

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Recourse Factoring for Freight Brokers

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Recourse factoring means you assume liability for invoices that are not paid. In exchange, the fees for these services are lower, and your customers are more likely to be approved for a credit line.

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The Benefits of Full Recourse Factoring for Brokers

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Wondering if recourse factoring is right for your freight brokerage or trucking business? Here are some of the main benefits:

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Lower Fees

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One of the main benefits of full recourse factoring for freight brokers is that you can usually get a lower factoring fee because the factoring company is taking on less risk themselves. 

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Recourse factoring fees range from 1% to 5% depending on your volume, business credit, and various additional factors. 

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Flexible Time to Pay

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Even though most recourse factoring companies will charge-back an invoice within 90 days if they can’t get payment from the customer, there is always room for flexibility. 

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For example, in the recent down market many shippers have been extending their payment terms to 90 to 120 days. Instead of instantly denying you the customer, recourse factoring companies will examine their credit and find a way to work with you.

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In addition to this flexibility, recourse factoring companies are also diligent in figuring out the reason for a non-payment before it becomes an issue. 

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More often than not, the reasons are related to paperwork (a page of the BOL is missing, the AP contact quit and we need to get an updated phone number, etc.). These issues are generally resolved well before approaching the recourse timeframe of non-payment.

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Work with More Clients

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Running a brokerage has inherent risks. At the top of the list is taking on new clients, especially those just starting out or with low credit scores. There is a chance of non-payment and there’s also a chance to grow your businesses together and take on more and more loads. 

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With recourse factoring, you have the choice to take on these risks. Recourse factoring companies will do a deep dive on customer’s credit and notify you of any potential glaring red flags and provide a fair credit limit. 

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Because recourse factoring companies are not liable for non-payment, you are going to find it easier to factor customers that may have some risk. Your customer pool is much bigger. And you get to reap the full reward.

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Quick Processing

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Other lenders may ask for stipulations or wait periods that make getting paid more trouble than it's worth. Recourse factoring companies are typically able to review applications in 2-4 business days, so you can turn your invoices into cash in under a week.

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The Downside to Full Recourse Factoring for Brokers

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The main challenge with full recourse factoring is the broker's responsibility for customer non-payment, especially in the event of bankruptcy. With the current market dynamics, where numerous trucking companies face financial hardships, the risk of delinquent payments looms larger than ever.

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However, this risk isn't insurmountable. Brokers have access to a variety of strategies—many of which are cost-free—to safeguard their operations and financial health:

• Foster Strong Customer Relationships: Regular interactions with your shippers can provide insights into their business health and preempt potential payment issues.
• Monitor Payment Patterns: A history of late payments can be a red flag, indicating deeper financial troubles.
• Keep an Eye on Credit Scores: A declining credit rating is often a precursor to financial instability.
• And more… Read our article for detailed warning signs of bankruptcy.

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By maintaining close relationships with your clients and vigilantly monitoring their financial health, you effectively reduce the risks associated with non-payment that full recourse factoring presents.

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Non-Recourse Factoring for Freight Brokers

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Non-recourse factoring means the factoring company takes responsibility for non-payment in cases of customer bankruptcy.

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The Benefit of Non-Recourse Factoring for Brokers

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In a market where we saw 8,000 brokerage and 88,000 carrier bankruptcies filed in the last year, finding ways to reduce risk is a serious benefit. Non-recourse factoring removes or lessens the risk of non-payment due to customer bankruptcy. 

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Even with the best non recourse factoring companies usually have a loophole in the agreement that states that the only time you will not be charged back on a load is if the customer files for bankruptcy or goes out of business within the 90-day collection period. 

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The Downsides of Non-Recourse Factoring for Freight Brokers

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Non-recourse factoring might sound tempting because you have less liability as a freight broker, but there are some important considerations as you grow your brokerage and need more flexibility.

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Limited Customer Base

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Because a non-recourse factoring company will be taking on more risk, non-recourse factors screen the broker’s customers very thoroughly and will factor loads only from customers who have impeccable credit. 

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As growing brokerages are not likely to work exclusively with blue-chip customers, there is a good chance that the freight brokerage will have all or most of its customers denied by the non-recourse factoring company. 

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Not to mention, because a non-recourse factoring company is inheriting the risk, they are going to be invasive with your customer. They will want a long laundry list of financial data before being able to extend a credit line. This can be extremely disruptive to your relationships. 

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Higher Rates

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As you research factoring companies, you may find that non-recourse factoring companies often charge a higher rate because they are taking on more risk. 

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Typically non-recourse factoring rates start at 2% and can go as high as 6%. 

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In addition to that, generally only established brokerages will be approved for non-recourse factoring. 

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Not a Full Coverage Option

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Non-Recourse factoring can be very misleading. Many see non-recourse and think their brokerage is safe from ALL forms of non-payment. 

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However, many non-recourse factoring agreements typically only cover non-payment during instances of bankruptcy. 

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Some of the cases in which brokers are not protected by non-recourse factoring include:

• Disputed invoices
• Contract breaches
• Invoice errors or discrepancies 
• Customer insolvency from external factors outside their control (ie: natural disasters)
• Cases of fraud or illegal activity (ie: double brokers) 

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What you Need to Know about Recourse vs Non-Recourse Factoring in 2024

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When deciding between recourse and non recourse freight factoring in 2024, freight brokers should consider the following: 

• Financial model and plans - Can your margins afford a higher factoring fee for a small safety net? 
• Client base - Are any of your clients giving signals of bankruptcy? If so, are there other ways to reduce the risk (ie: diversifying your portfolio, increasing rates, or insurance). 
• Terms and Conditions - Do you have the time and bandwidth to manage a factoring company with tight restrictions? 

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Ultimately, the choice between recourse and non-recourse factoring depends on each freight broker's specific needs, risk tolerance, and financial strategy. Engaging with a factoring company that offers transparent terms and aligns with your business values is crucial for a successful partnership in 2024.

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Your Freight Broker Factoring Solution

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Every freight broker is different and will require different needs with choosing a factoring solution. Freight factoring is a good option to maximize your working capital, manage your cash flow, and build strong relationships with shippers and carriers. 

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At Denim, we offer recourse factoring because it’s the best way to serve our clients, no matter the size of their brokerage. We also offer a number of tools to protect your brokerage, from unlimited customer credit checks to important business metrics like most and least profitable customers. 

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Want to learn more about factoring with Denim? Schedule a demo to experience the whole platform!

The gap between delivering freight and getting paid shouldn't be significant. Luckily, you can get paid instantly by using freight broker factoring.

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Keep your business running on the capital you've already created. Stop relying on buffers created from credit and loans. Focus on running your business and, ideally, growing it, instead of chasing down payments, leaving you light on resources when opportunities do arise.

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Freight broker factoring has been around for decades and has helped many freight brokerages grow instead of stagnating.

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What is Freight Broker Factoring?

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While 40 days is the standard amount of time to get paid in the freight industry, selling your invoices to a factoring company allows you to get paid immediately.

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Sure this is convenient, but what's the cost to your business? Most companies that specialize in factoring for freight brokers charge a flat rate per invoice factored, usually between 2-5%.

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How Factoring for Freight Brokers Works

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The terms of your factoring agreements depend on the outcome of your application, but here are the high-level steps:

1. A customer needs an item shipped between two locations.
2. A credit check is performed upon hiring to ensure their load qualifies for the requested services.
3. When the item is delivered, you invoice Denim.
4. Denim purchases your invoice and you and your carrier are paid within 24 hours.
5. Denim collects payment from the customer.

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Factoring vs Bank Loans

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When you get a bank loan, you might put up collateral in the form of AR or other business assets. This allows you to retain ownership of assets while simultaneously selling the invoices to a factoring company. Factored accounts are removed from receivables in exchange for the ability to bill the client directly. 

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The transaction simply replaces AR with cash in the bank, or off-balance sheet financing. One big benefit of using a factoring company as a freight broker is that you won't incur a monthly interest expense, unlike a bank loan. 

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Factoring allows you to reduce your total balance sheet debt while also lowering your debt-to-equity ratio.

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The Benefits of Factoring for Freight Brokers

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There are many benefits of factoring for freight brokers. Here are just a few:

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More Access to Working Capital

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Mega brokers don't suffer cash crunches, they simply keep moving, often steamrolling smaller brokers in the process. Carve out a chance to compete with these big brokers with factoring. What is the total cost of operational pauses? You can't take on new work, your current clients suffer, and in the long run, your reputation suffers. Not to mention you're not at your best as a company when you're constantly stressed over your AR.

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Stay Competitive

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To build a reputation and maintain it as a freight broker, you need to stay competitive. The more value and better experience you can provide, the more likely you'll be to get referrals. You will live or die by these in the freight industry.

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QuickPay‍

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With factoring for freight brokers, your carriers get paid quickly without being charged a fee. The easier you make life for your carriers, the more of them that will come back. Get up to 95% of your invoices paid out just a day after submitting them. 

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Increase Value

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Why should carriers work with your freight brokerage over the others? Starting out, you need to develop a unique value proposition, even if it's only offering a shred more than your competition. The truth is that the freight brokerage industry, and logistics in general, is extremely competitive. Everyone knows how to offer the fundamentals, including factoring. The question is—will you do so in a way that stands out?

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Less Paperwork

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Paper shuffling around getting invoices paid is not only a waste of time, but it can also be costly labor. Eliminate labor that you can give to an outside team and recoup much more than the factoring fee in many cases.

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Free Credit Checks For Shippers

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If you can find a factoring provider like Denim who does free deep dives into shippers, you’ll prevent a lot of unqualified customers from slowing you down.

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Enjoy Flexible Financing Options

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No two freight brokerages are the same and therefore, they have different financing and payment processes. Because of this, it’s important to have flexible financing options. At Denim, for example, you can choose which invoices you want to factor. In addition, we also have a feature coming soon where you can choose when you get paid to either save on factoring fees or get paid sooner if you need the capital. 

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Factoring for Freight Brokers vs Factoring for Carriers

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Denim specializes in freight broker factoring because most factoring companies focus on carriers. Why work with a factoring company that doesn't completely understand your unique needs as a freight broker?

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You don't just produce or ship; you connect the two parts of the supply chain. Without you, loads are delayed and customers are unsatisfied, leading to damaged reputations over time. We understand the value you provide, which is why we cater just to factoring for freight brokers. Our factoring solutions are made by brokers, for brokers.

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How to Choose a Freight Broker Factoring Company

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As a freight broker who wants to be paid quickly, who do you go with to provide your factoring? Here are some things to consider when choosing a factoring partner (spoiler alert: a lot more goes into this partnership than just trying to get the lowest rate):

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Referrals

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The logistics sector is a tight-knit community so if you’re not sure which factoring company to choose, you can consult others who have been in a similar position to see who they chose.

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Success Stories

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When choosing a factoring partner for your freight brokerage, it’s great to see success stories from similar brokers. We have many amazing success stories from freight brokers just like you. They share their stories and how factoring helped them grow their business.

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Reviews

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Like success stories and referrals, reviews are a great form of social proof as you research different factoring companies. We are proud of our 4.8 star average on TrustPilot. 

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Specialization

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As we mentioned, freight brokers have unique needs and should look for a factoring partner that understands their line of work. You will have different needs than carriers looking for factoring.

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Factoring Types

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Recourse and non-recourse factoring are the two most common types of factoring. Non-recourse factoring means the factoring company assumes most of the risk of non-payment by your customers. This can be misleading because non-recourse does not necessarily protect your company from all risk. There are usually strict stipulations associated with non-recourse factoring, and the situations in which you are not responsible for customer non-payment are extremely specific.

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Advance Rates

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When considering your factoring partner, you should decide how much of an advance you would like while you wait for your invoices to be paid in full. Denim offers 90% advances to our clients.

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Minimums

Some factoring companies for freight brokers will require monthly minimums, which can be hard to reach for smaller brokers. At Denim, we don’t require any factoring minimums and you can choose which invoices you want to factor.

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Fee Type

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Flat and variable fees are common. Variable rates fluctuate with your demand. For example, if you assign volume flex variable rates, you'll pay less the more you sell. Rates can also be tied to prime rates, meaning you'll pay more when your factoring company pays more.

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Your Freight Broker Factoring Solution

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At Denim, we are passionate about providing freight brokers with the most flexible, easy-to-use, and convenient factoring solutions. Not only do we offer competitive factoring solutions, but our dashboard is cutting-edge and includes business metrics that every freight broker should know about their brokerage. 

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Want to learn more about factoring with Denim? Sign up for an account today or schedule a demo to experience the whole platform!

Risk is an innate part of life and business. But you can mitigate some risks, avoid unfortunate outcomes, and build a successful freight brokerage. 

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When considering how to grow a freight brokerage, you should know that careful attention to risk management helps you adapt to changing economic times. You can plan for steady growth and build a brokerage that can thrive over the long term.

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Keeping a close eye on your financials is essential to mitigating risk when learning how to grow a freight brokerage. You can focus on accelerating your income, reducing costs, and choosing the right mix of industries and customers to serve. Advanced freight broker software can help you every step of the way by providing you with real-time insights into the current health of your business.

The US freight brokering industry is expanding at an impressive rate. In 2020, the market size was around $1.1 billion, but the market is on pace to reach $13.78 billion in 2028, an annual growth rate of 36.2%.

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Whether you're wondering how to become a freight broker or are an established veteran, you know this rapid growth means opportunity. But you need to prepare now to capitalize on it.

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One critical step is abandoning any cobbled-together technologies you use to run your operations. Specific freight broker technology designed with the needs of the industry in mind wasn't available for years, and many brokers still struggle with outdated solutions.

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The lack of industry-specific freight broker technology has been a barrier to efficiency, but that's not the only challenge. Instead of devoting time to building close bonds with carriers, brokers were all too often mired in paperwork. 

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Fortunately, you can now access digital freight broker technology, streamline your business, and focus on fostering trust-based relationships with your carriers.

The Benefits of Building Trust With Your Carriers

Building strong relationships with their shipping customers is important. But it's essential to extend that customer service mindset to your carriers as well. When you do, you can gain significant benefits for your brokerage, such as:

• Increased loyalty. When carriers feel heard and valued by a broker, they'll likely want to work with that broker as much as possible.
• Enhanced communication, visibility, and service. Honest, transparent communication is the cornerstone of good relationships and a necessity to get the job done. Strong bonds with your carriers can motivate them to go the extra mile for you, which means delivering more proactive service to your shippers.
• Stronger trust between you and your shippers. When you have carriers ready to work for you, you can deliver the service your shippers need when they need it. That means they'll look to you as a trusted freight broker and give you more loads—and that means more revenue.

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How to Build Trust with Carriers Through Freight Broker Technology

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The good news is that the technology you use to manage day-to-day activities can also help you forge strong ties with your carriers. By streamlining routine tasks and offering value-adds like factoring and prompt payments, you can rely on freight broker technology to keep you and your carriers connected.

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Transparent Communication

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To build trusting relationships with carriers, you must be honest about jobs, payments, and expectations. You won't win any points by conducting hard-ball negotiations and undercutting rates. Also, if you can't pay as much as other brokerages, it's best to be upfront about that. When you're open and honest, carriers who enjoy working with you will return time after time, even if you aren't always at the top of the pay scale.

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You should also try to get to know your carrier's preferences. Do they value certain routes or work schedules? Although you may not always be able to accommodate them, you'll earn appreciation by making a good-faith effort to meet their needs sometimes. Giving some consideration to your carriers can make them more willing to step up if you need help covering an extra load or an unplanned cancellation.

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More Payment Options

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As non-salaried workers, carriers depend on prompt payments to ensure a steady cash flow to keep their business running. No one likes chasing down receivables, and slow payments will inevitably cause your carriers to lose trust. Even the net-30 of the standard of the past is obsolete in today's digitized environment.

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With Denim Factoring and QuickPay, you can overcome this common challenge. You can use our freight broker technology to simplify the invoicing process for your carriers and get money into their hands faster. They spend less time handling billing and payments and more time transporting loads, meaning they can earn more. 

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A Higher Level of Service

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Smaller and mid-size freight brokerages have an advantage over larger competitors—a human touch. When carriers work with a larger firm, they often are one of many independent service providers. That can lead to a feeling of being treated like a number, not a person.

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Also, more digital freight brokerage firms are popping up. While they offer efficiency, they can't provide that all-important personal connection. Traditional firms that have top-quality freight broker technology can deliver the same speed while building personal relationships with carriers. 

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You can give your freight brokerage a competitive advantage. A service mindset and freight broker technology that makes the administrative side of the business easy for your carriers can help you stand out.

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Powerful Data at Your Fingertips

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Freight brokering is an innately complex business. You need to juggle multiple shipper accounts and stay on top of their payment patterns. At the same time, you need to engage with various carriers and ensure you are utilizing and paying them effectively. 

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With state-of-the-art freight broker technology, you can keep a close watch on all the critical metrics that drive your business. Denim's Business Performance Dashboard gives you at-a-glance insight into key data, including jobs over time and average days sales outstanding (DSO), along with fastest paying, slowest paying, and most profitable customers. You can always be in the know about the health of the business and make targeted adjustments to optimize your broker operations. 

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Having this information readily available saves hours of time that you would normally devote to administrative work. You can redirect those energies to building better carrier relationships.

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Improved Carrier Experiences

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We all prefer to work with people who respect us and treat us well. For carriers, brokers who keep the lines of communication open and show appreciation will win trust and loyalty. It's also imperative to be transparent about payments so that carriers can know exactly when they'll receive funds for their work.

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Denim freight broker technology makes it easy to achieve those goals. Our freight factoring pays you out for loads promptly and allows you to offer factoring to carriers at whatever rate you prefer. With QuickPay, you can deliver payments within 24 to 48 hours for each factored invoice. Carriers will learn that you're an honest and reliable broker and be more willing to work with you.  

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Trust-Based Carrier Relationships Are Critical for Success

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As you're learning how to be a successful freight broker, you'll set profitability and customer acquisition goals. You should also make fostering close ties with carriers a key business objective. 

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When carriers recognize you as a transparent broker who always pays on time, they'll be happy to work with you. That gives you more stability and predictability since you'll know you have carriers you can rely on to transport loads. You'll develop a reputation as a reliable broker to your shippers, opening the door to more business.

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Without question, embracing technology as a freight broker is critical for success. Today, freight brokers can access intuitive solutions that make the administrative side of the business easier.

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Features like robust data dashboards, automated invoicing, and quick payments mean less busy work and more opportunities to connect to carriers. With more than 90,000 freight brokerages in the US, this attention to relationship-building can make you stand out from the crowd and position your brokerage for long-term growth.

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Contact us to learn more about how Denim can help set your freight brokerage apart and attract top shippers and carriers through technology.

Since the start of the pandemic, the market turmoil impacting the logistics industry, including freight brokers, has made one thing abundantly clear: it’s always prudent to buttress your business against present and future disruptions in your revenue streams.

This means looking beyond working with just a few big customers, no matter how well your current relationships may be, continuously expanding your market reach, and exploring new ways to generate income.

The Importance of Diversifying Your Freight Customers

Sometimes it only takes one unforeseen hiccup to turn your best customer into a former one. Plus, getting underbid and losing a lucrative business opportunity to a competitor is very common. These instances, along with many more, could cripple your operation if you don’t have a robust customer base.

That’s why now is the time to diversify.

With a strategic plan, you can ensure your brokerage weathers any turbulence and comes out stronger and ready to scale in both good times and bad.

How to Diversify Your Customers as a Freight Brokerage

To help you get started, here are six effective strategies you can use to gain a wider audience and reduce business risk.

1. Zero In on an Industry You are Passionate About

Be it pharmaceuticals, construction, or FMCG, most brokers have an industry that they know inside out. What better way to expand your business than by leveraging this specialized knowledge to grow your freight brokerage? 

Call up your industry contacts, get referrals from them, or start an email campaign targeting your favorite niche. Your expertise, experience, and enthusiasm will make a difference, elevate your pitch, and set yourself above your competition.

Guard yourself against future challenges by building a diverse client portfolio around your strongest sector.

2. Expand Your Service Offerings

Many freight brokers often fail to recognize just how much headroom there is to be gained by simply broadening the list of services they provide. 

How about adding additional lanes by building a larger carrier base, and then targeting shippers running freight in those lanes? For example, grab a piece of the multi-billion dollar seasonal shipping market by opening up an intra-Midwest corridor to move agricultural products and equipment.

Another quick way to increase the value of your services is by offering free and convenient online payment options such as ACH QuickPay, which makes your carriers happy with quicker payments while freeing up your backend accounting operations so you can dedicate more resources to customer acquisition and service expansion.

3. Network, Network, Network

It’s vital to ramp up your networking efforts when the times are tough. From making calls, sending emails, attending conferences, hosting local events, and promoting on social networks such as LinkedIn and Facebook, make it a priority to reach out to new prospects regularly and keep building your contact list.

To start, set specific weekly or monthly goals for the number of new contacts you get in touch with, and steadily follow up on those leads. Remember, a healthy sales pipeline starts with a consistent process of identifying and connecting with potential customers in order to support your business development.

4. Highlight Your Advantages

In an ultra-competitive market, every advantage counts in your favor, no matter how small. Keep highlighting your strengths to set yourself apart and enlarge your client base.

When thinking about how to start a freight brokerage business and grow it successfully, make sure you meet & exceed customer expectations by adopting the latest digital tools to improve transparency and deliver a flawless customer experience. 

Luckily, financial partners like Denim allow you to do just that with an array of cutting-edge features such as a business performance dashboard, a fast payment system, and full visibility with advanced reporting. Plus, we also help you pay your carriers faster and boost operational efficiency with ACH QuickPay sent daily, 90%+ advances, real-time TMS integrations, interest-free factoring, collections services, and many more.

Check out our plans for freight brokers and stand out from the crowd with the most advanced, all-in-one platform in the industry.

5. Strengthen Your Business Relationships

The foundation of any freight broker’s business is based on relationships with their carriers and shippers.

Therefore, it’s vital to maintain the highest level of service for your customers - by learning their particular business processes and tailoring your solutions to meet their needs.

Often, this entails making things easier for your carriers. As mentioned earlier, everyone loves to get paid as quickly as possible without delay. Therefore, offering quick, guaranteed payments online via ACH QuickPay is a big plus in any carrier’s book and goes a long way to securing an ever-growing partnership.

Another excellent way to build stronger ties is ensuring seamless integration with your customer’s preferred TMS platform, such as Ascend or EZ Loader, to enable fast load booking, digital documentation, etc.

You can gain even more trust by improving your credit rating on Ansonia, which opens up the door to doing business with a more diverse list of carriers and shippers. 

6. Have a Contingency Plan

The pandemic has taught all of us that anything can and will happen, especially in the often turbulent shipping industry. And it’s up to each freight broker to assess their risks and prepare a contingency plan to ensure their business will continue to function in such emergencies. 

The good news is that it’s not as complicated as you might think.

Start by identifying your key risk scenarios (ie. inclement weather, technical glitches, loss of a big client, etc) and then outline the specific steps you will take to address each one.

Next, determine anything you can do in advance to get prepared (i.e. having a backup internet connection in case the primary one goes down).

Finally, always aim to run your brokerage operation as efficiently as possible for more flexibility in times of need. A great way to do this is by utilizing a financial platform to cut accounting and back office costs, which affords you the leeway to invest in what actually grows the bottom line - the expansion and diversification of your customers.

All Freight Brokerage Businesses Must Work on Diversifying Their Customer Base

The old adage of not putting all your eggs in one basket has once again proven to be sage advice in these trying times. Whether you are just starting a freight brokerage, or are a seasoned firm looking to scale, it pays to take concrete steps right now to diversify and mitigate your risk by applying some ‌tips outlined above.

To learn more about how to set up your brokerage to succeed in any market condition, contactthe experts at Denim to help you run a more efficient operation, attract top carriers and shippers, and bulletproof your business.

A freight brokerage rises and falls on its relationships, with sensitive data flowing between shippers, brokers, and carriers. It is the job of a freight brokerage to tactfully manage and protect this data coming in from both sides. But, as the transportation and logistics industry increasingly depends on technology to manage their businesses, this has become harder to do. 

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Cyberattacks across trucking, logistics, freight factoring, and freight forwarding are now happening more frequently and with added complexity. Not only are these attacks costly, but they can compromise the trust of your customers. According to data from IBM, the transportation sector was the seventh most-attacked industry in 2021, accounting for 4% of all cyberattacks within the top ten industries. When combined with the fact that 60 percent of small- to mid-sized companies will close after a cyberattack, it’s essential that small- and mid-sized freight brokers give special attention to cybersecurity practices. 

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There is good news, though. With the right systems, employee training, and technology partners in place, freight brokers can prevent cyberattacks, grow their business, and become trusted partners that focus on data security for their customers.

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What is a Cyberattack? 

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A cyberattack is any attempt by a foreign party to damage or destroy a computer network or system. There are a variety of ways cybercriminals or hackers can launch an attack, but ransomware ranks as the No. 1 cyber threat to freight brokers because of the level of access hackers can gain. During a ransomware attack, hackers encrypt sensitive data and demand payment to free it. Brokers are usually held hostage by hackers that hope the company will get desperate enough to pay the ransom to regain control of their data. 

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Because successful ransomware attacks can disrupt a company’s entire IT network and cause costly downtime, many brokerages find it cheaper to pay the hackers. This has further reinforced the idea that they are an easy target.  

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Other common cyberattacks include: 

• Phishing. Phishing is one of the more common methods hackers use to gain access to company data. This often comes in the form of an email to unsuspecting employees. The emails almost always look legitimate and can fool even the most careful employee. 
• Password attacks. These attacks refer to a hacker trying to steal a user’s password. They were one of the most common causes of data breaches in 2020, with companies reporting that 81% of data breaches were caused by compromised credentials.
• Man-in-the-middle. In this method of cyberattack, hackers insert themselves into a two-party transaction. From there they can filter and steal data.
• Distributed Denial of Service (DDoS).  In this cyberattack, attackers flood a server with internet traffic to prevent legitimate users from accessing connecting services or websites.

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All cyberattacks will look different, but understanding some of the most common ones can help you prepare and minimize the damage. Suspicious network activity such as abnormal access patterns, database activities, file changes, or unexpected network activity are red flags freight brokers should be looking for to identify and suppress a cybersecurity threat.   

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Is Your Freight Brokerage at Risk of a Cyberattack?

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Freight brokers are responsible for their customers’ most sensitive information, often including pricing and payment information. This puts even small to mid-sized companies at risk of a cyberattack and the financial losses that accompany them. 

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Unfortunately, the freight payment process between freight brokers and trucking companies has increasingly become a common target for hackers who assume these companies lack the sophistication and resources to protect themselves from cyber threats—and that assumption is not always wrong. 

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As digitization for freight brokers has revolutionized the industry over the last decade, many brokerages and carriers have not always kept up with the best practices in their payment solutions and other technologies to improve online safety. The sector’s prominent role in the consumer economy also adds to its vulnerability. Because it is so interconnected, one company’s cyberattack has the potential to bring the movement of freight to a complete stop. This has direct consequences for the entire supply chain down to the consumer level. 

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How to Protect Your Freight Brokerage from a Cyberattack

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Protecting your brokerage from a cyberattack doesn’t have to be hard or complicated. Here are several freight brokerage best practices to help you prepare for the cybersecurity threats that may lie ahead:

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Create a Strong Password

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Cybercriminals often try to access user accounts by using combinations of names, milestone dates (anniversaries, birthdays), and dictionary words. Brokers’ software systems should not only require user passwords but complex passwords. The Denim Payments platform, for example, requires all customers to have strong passwords that are complex for humans or computers to guess. These simple safeguards significantly reduce the effectiveness of password-related attacks.

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Denim also utilizes mandatory password lockouts. We have implemented a mechanism that locks user accounts after 10 invalid password attempts. This measure helps protect customers from "brute force" attacks.

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Train Your Employees

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Employee education is arguably the most important step in improving cybersecurity. Training should be conducted during the onboarding process for all new employees and revisited regularly throughout the year for current employees. Annual training sessions keep employees updated on best practices and ensure they know how to spot cybersecurity red flags, such as suspicious phishing emails.  

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We regularly conduct cybersecurity training here at Denim. We provide employees with the knowledge required to identify and appropriately respond to cybersecurity threats. In addition, we regularly work with independent security teams to conduct penetration testing exercises that involve simulated cyberattacks designed to identify any potential vulnerabilities in our applications that cybercriminals may exploit.

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Choose the Right Freight Factoring Company

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Protecting proprietary, personal, and customer data is essential to the success of your brokerage. Choosing the wrong technology partners has the potential to open your business up to cybersecurity risks. This is especially true when selecting a freight factoring company. While freight factoring is an efficient way for brokers to avoid lengthy delays in payment on invoices, brokers must ensure their freight factoring company is making all efforts to secure their sensitive data. 

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For our cloud-based freight factoring company, cybersecurity analytics are always top of mind at Denim Payments, starting with limiting the amount of Personally Identifiable Information (PII) we collect for our customers. Any customer data stored via disk is securely encrypted to ensure protection in the event of a data breach, lost or stolen devices, or data leakage.

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At Denim, we also offer our partners cybersecurity assurance through a variety of built-in features, such as secure data transmission and DDoS threat mitigation. 

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Protect Your Data to Grow Your Freight Brokerage

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Protecting your brokerage's cybersecurity just makes good business sense. Freight brokers can set themselves apart and grow their brokerage by ensuring all personal and customer data is protected. And while choosing the right freight factoring company is a great place to start, it is also the responsibility of each broker to ensure they have the right measures and training in place. 

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Ready to learn more? See how Denim's payment automation software can help protect your brokerage from falling victim to a cyberattack. Please reach out to us with any questions or concerns.