RFX Blog

4 Operational Tools Freight Brokers Should Use Daily

May 16th, 2014

Photo Credit: Creative Commons Flickr/David Guo

Photo Credit: Creative Commons Flickr/David Guo

We all know that truck capacity is tight.  On Wednesday, the Chicago Tribune reported that the flatbed demand ratio is thirty-seven loads for every one flatbed on the road.  RFX Global has always been a proponent of utilizing technology and business analytics as a solution for complex problems, such as truck capacity.  With that, we’d like to share some insights that may help freight brokers manage capacity in the supply chain. Here are 4 operational tools that freight brokers should use daily:

Preferred Lanes Report – If you are not reaching out to your carrier-base and collecting and updating data regarding their preferred lanes, you should be.  Having good relationships with your carrier-base and knowing how many trucks they have and where they prefer to run will give you one more tool that your competitor doesn’t have.  The best place to start is with your carrier qualification department.  During your safety qualification, contract and on-boarding process, you should be asking your carriers where you can help them with any backhauls.  From this data, generate a report and keep it up-to-date so you know who to call first.

Lane History by Carrier – Instead of running a report that tells you where your carriers prefer to run, this report will tell you where your carriers actually run, based on your company’s load history.  RFX uses this tool and we find it to be very powerful.  Simply type in some shipper and receiver geographic information and the report compiles a list of carriers.  The report displays carrier name, MC#, contact information and most importantly, the report ranks carriers based on the number of trucks they have and the amount of times each carrier has pulled a load for RFX in the specified lane.  Chances are, if a carrier has 25 trucks and they have done a load from Maine to Florida 30 times in the last year, they may want to take your load in the same lane.  Additionally, you’re doing a service to the carrier by calling and saying “We noticed you’ve loaded Maine to Florida quite a bit for us.  Can we help you get your driver home to Florida?  We’ve got a load for you.” Even if you they can’t help in that instance, just having the insight before picking up the phone and then trying to fulfill a need for your carrier does not go unnoticed.  It makes you a better service provider.

New Carrier-to-Load Ratio – As a transportation broker, especially in today’s market, it’s important that you build and maintain strong relationships with fewer carriers, rather than becoming dependent on loadboards for one-and-done relationships.  While we recognize that this is easier said than done, there is a direct correlation between freight agents with a strong core carrier-base and those freight agents’ level of success.  Having said that, we’ve introduced a metric that we call the New Carrier-to-Load ratio.  This ratio is the number of new carriers that a freight agent has brought on or reactivated divided by the number of loads that freight agent has done over a period time.  For example, if I did 100 loads last month and I onboarded 20 new carriers in that time, my New Carrier-to-Load ratio is 20%.  It’s like golf… you want a low score.  This is a great tool for anyone who manages an operations department because it gives you a birds-eye-view into who is generally more dependent on finding carriers on loadboards and who is committed to building strong carrier relationships.  This is not to say that going to the spot market is a bad thing.  But tight capacity drives up rates which drives up the cost of your service.  Having a strong carrier relationship also helps you provide a better service to your customer.  Develop good carrier relationships whenever you can.

Internal Truck Posting – It is important that your operations team maintains internal communication with each other regarding available loads and available trucks.  If Joe gets a call from a motor carrier in Chicago looking for a load to Houston, but none of Joe’s loads are headed in that direction, it is Joe’s responsibility to your company to communicate that available truck to the rest of the operations department, in the event that somebody else needs that truck.  Come up with your own system for this type of communication – whether it’s an internal load board or a simple email distribution list.  Communication among your operations department is a vital part of providing better service to your customers and carriers.

The biggest theme in this article has been relationships.  As a transportation manager, your biggest asset is your relationships with your customers, your staff and other transportation providers. Any tool that allows you to build and maintain strong relationships is worth looking into.  We hope you’ll apply some of these tools to your own business practice.

Posted on May 16th, 2014 in business strategy, freight agent, Technology