Freight Brokers are the third party logistics service provider who performs as a connection between the shipping company and carrier companies.
Freight brokers play a very crucial role in the national transportation industry of the United States. They are imperative connectors of the shippers in movement of freight and serve in transporting the freight in a more pragmatic and cost-effective way.
Misconceptions About The Freight Broker Companies.
The vitality of freight agents has significantly risen in recent years. Therefore, industry still carries some misconceptions about the Freight broker companies.
- Freight Brokers can operate without a license: The freight broker company cannot engage in the freight brokering process unless the firm has obtained operation authority from the Federal Motor Carrier Safety Association (FMCSA). The Property of Broker Registration is the exact name of the license which is mandatory for every functioning freight brokerage company. The companies can be prosecuted lawfully if they don't process the required paperwork.
- Freight Broker company cannot apply for a bond if they have bad credit: The companies can easily receive bonds even if they carry bad credit history and suffer from financial problems. The companies work out with bad credit surety bonds formulated in its entirety for applicants who have severe financial problems. The rates usually range from 5% to 10%. The service provider lays an assessment of the recurring finances to eliminate any kind of risks.
- Freight Brokerage services are expensive: The freight brokers are paid by the shipper for moving their loads by arranging rightful carriers. The brokers are connected with a wide database of carriers. They have the right knowledge and relationships with the service providers, which can greatly support the shippers in arranging trucks for the freight at cost-effective prices.
- Freight Brokers are unreliable: In the past, the brokers didn't carry a decent reputation. It was because there were no safety and surety bonds. The broker bonds range from $10,000 to $75,000 which ensures safety of every party involved in transportation. The affected party can easily make a claim in case of accident or robbery. Therefore, the freight broker companies work with transparency and professionalism. Many brokerages possess a decent reputation in the industry because of their renowned services and reviews.
- Non Asset Brokers don't have contacts with relevant carriers: The brokers without assets possess a bigger network of carriers in their database. The brokers carry accurate information about the carriers and lanes therefore; they can easily support shippers in arranging necessary trucks at their disposal according to transportation needs.
Freight Brokers play a very vital role in the supply chain industry. The freight brokers widely serve shippers in their business by offering cost-effective and reliable services. Hopefully, this article has debunked common myths in concern with freight broker companies.