Key Mistakes New Freight Brokers Should Avoid

Starting a career in freight brokerage can be both exciting and financially rewarding. As the link between shippers and carriers, freight brokers generate a regular and constant stream of business in the supply chain. Without some groundwork, however, entry into freight brokerage can result in expensive errors that affect your reputation, earnings, and long-term success.

Whether you are new to freight broker training or already handling shipments, a list of references of the most common mistakes can stop you from falling into them and give you a successful business. Here are the most common mistakes new freight brokers make—and how to avoid them.

Skipping Proper Freight Broker Training

Many aspiring brokers are eager to enter the business, but overlooking freight broker training is one of the most common—and avoidable—mistakes. The industry is governed by regulations, contracts, and procedures that must be clearly understood before dealing with clients or carriers.

Successful freight broker training instructs students in useful topics such as industry terminology, FMCSA regulations, rate negotiation, load boards, carrier screening, and legal obligations. Without appropriate training, brokers may neglect compliance processes, misquote rates, or neglect maintaining their interest in contracts.

Invest in freight broker training courses or mentorship programs prior to handling real shipments.

Not Screening Carriers Properly

Qualifying, validating, and carrier compliance are a few of the principal responsibilities of a broker. Carelessness or assumptions about bookings without validating the carriers can result in significant issues such as cargo claims, delayed deliveries, or even fraud..

The most critical carrier vetting processes are:

• Verification of carrier authority and insurance through the FMCSA website.

• Verification of safety ratings and reviews.

• Calling references or checking their background using freight load boards.

If you fail to do your due diligence, not only does it damage your credibility, but it can also expose your freight brokerage to legal and financial risk.

Overestimating the Role of Technology

Technology plays a big role in freight brokerage. New brokers lose shippers or frustrate carriers with indefinite notices, delayed feedback, or not setting expectations.

Whether warning a shipper of a late pickup or directing a pickup with a driver, advance notice informs all involved stakeholders and prevents miscommunication. Always follow up in writing, verify delivery time, and inform all involved parties step by step.

Poor Rate Quoting and Margin Management

New brokers will have difficulty quoting competitive rates with a good margin. Quote too low and you are in your profit or cause you to lose money on a load. Quote too high, and you'll drive away shippers and eliminate your repeat business opportunity.

Learning how to balance competitive pricing with your brokerage's financial needs is a skill that comes with experience—and good freight broker training.

Monitor market data; keep in mind fuel prices, availability of lanes, and seasonality to make informed decisions.

Overlooking Back-Office Operations

Every new broker cares only about broking loads and keeps the back-end of operations in mind. Billing after a job, payment of carriers, complaint resolution, and proper records being sufficient are all crucial to being organized and profitable.

Neglecting these duties can result in cash flow issues, delayed payments, or litigation if reports are inaccurate or incomplete. Consider transportation management software (TMS) and creating a checklist so back-office work gets done on a daily or weekly basis.

Not Building Relationships

Freight brokerage is a relationship-driven business. Relying solely on load boards and not investing time in developing one-to-one relationships with carriers and shippers will restrict your growth.

Good brokers enjoy establishing long-term relationships. That is, treating the carriers fairly, being honest with the customers, and going the extra mile during critical situations. Shippers and drivers will bring back business and refer more if they respect you.

Send thank-you letters, follow up on good deliveries, and provide excellent customer service to all stakeholders.

Failing to Understand Compliance Requirements

Freight brokers must be in compliance with federal regulations, like those of the Federal Motor Carrier Safety Administration (FMCSA). They include obtaining a broker authority, bonding, and proper documentation.

Not doing or missing any part of the compliance process can result in delays, fines, or losing your authority.

Make compliance part of your ongoing learning, and regularly review FMCSA updates.

Final thoughts

It is considerably more than simply matching carriers and loads to be a successful freight broker. There is learning, planning, close attention to detail, and relationships. The first few years of your career are all critical in establishing a strong foundation, and staying away from these mistakes will make your freight brokerage successful in a competitive industry.

Whether beginning freight broker training or already booking shipments, staying informed and prepared will keep you ahead of the curve. With the right mindset and a commitment to doing things the right way, you’ll be on track for long-term success in the freight industry.