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The 10 Most Common Reasons New Freight Brokers Aren’t Successful

By Contributing Author | 09/18/2018 | 6:25 AM

By Eric Weisbrot, chief marketing officer, JW Surety Bonds


Starting a new business is exciting for many, as it lays the groundwork for creating opportunities that are not readily available in the normal nine-to-five grind. That excitement extends to those wishing to start a business in the transportation and logistics industry, particularly because of the high growth rate in the marketplace. Licensed freight brokers have a significant chance of making a name for themselves in the industry as experts predict an increase in the demand for intermediaries to help keep up with the shipping rush. However, just because the opportunity for successful freight brokerage businesses is ripe does not mean everyone who tries will succeed.

Being a successful freight broker from the start requires business know-how as well as specific insight into the industry as a whole. Here are the top 10 reasons new freight brokers miss the mark, and how prospects in the market can set the stage for success.

Not Allocating Enough Capital

Nearly all new businesses require some amount of capital on hand to open the doors, even when the business operates mostly through digital communication and phone calls. Freight brokerage businesses do not have steep requirements for getting started from a financial perspective, but some startup costs must be considered. Freight brokers need to have enough set aside for registering a new business, getting the right equipment and technology tools to manage workflow, and securing a bond, insurance, and cash reserves. Those who fail to plan for these necessary expenses cannot last long in the freight brokerage business.

Misunderstanding Business Requirements

Being a freight broker is appealing to many because it does not require extensive resources or knowledge. However, having a legitimate freight broker business does have specific business requirements that cannot be overlooked. Some freight brokers new to the industry bypass the licensing mandates, either on a state or federal level, while others completely overlook the need to get a freight broker bond. Both of these aspects of the business are necessary components to operate legally, and successful freight brokers follow these rules closely.

Ignoring the Importance of Industry Experience

Having a few years of experience in transportation and logistics goes a long way as a freight broker. Some individuals see the opportunity in the market and assume starting a freight brokerage is as simple as acquiring a leads list, a laptop, and a reliable phone. However, successful freight brokers need experience in the industry to thrive for the long term. Experience can be garnered in several different areas, including trucking, business management, and logistics, but the bottom line is that some level of understanding of the market is needed.

Not Making the Right Connections

Successful freight brokers take time to cultivate strong business relationships, many of which originate from their experience in the industry. Those who are newer to the freight brokerage or transportation business may find it difficult to make these connections right away. However, participating in online forums, talking about opportunities and challenges with carriers and shippers, and being open to new business relationships with other freight brokerage firms is beneficial in overcoming this obstacle.

Avoiding the Tech Train

In transportation, technology is looked upon as either a helping hand or a barrier to overcome. New freight brokers who wish to be successful in launching their business need to embrace the right technology tools from the start. Several digital solutions for managing a freight brokerage business exist, as do technology platforms for business management needs like accounting and payroll. Implementing these resources is necessary in order to be successful over time.

Failing to Market

A significant aspect of operating a freight brokerage business is the ability to market services and solutions to the masses. According to the most recent data, there are more than 13,000 licensed freight brokers operating in the United States, meaning competition is high. New freight brokers should have strategies in place to market their business, whether that is through online, print, or other media outlets.

Leaving Prospects Hanging

Freight brokers who start out with immediate success may find themselves overwhelmed by the number of prospects asking for their help. One of the challenges in being a new, successful freight broker is implementing systems to manage lead flow over time. Fortunately, many lead-management tools are available that can help create a sustainable process for keeping in contact with prospects as they materialize.

Incorrect Pricing

It is often difficult for new freight brokers to set their rates correctly the first time. They either price their services too low and lose out on potential profits, or they create an unrealistic price that pushes them out of the running for new business. Staying up to date with industry trends in pricing and freight rates is beneficial in setting the right price initially and as the business grows.

Avoiding Additional Education

Freight brokers who lean too heavily on their industry experience or previous success may ultimately fail because they overlook the importance of ongoing training and education. Freight broker training courses exist at many colleges and universities around the country, as well as several online schools. Staying up to date on current operations procedures, shipping and carrier needs, and pricing and marketing tactics through freight broker training can make a substantial difference in success or failure as a broker.

Not Doing the Work

Finally, new freight brokers miss the mark in operating a successful, profitable business because they do not put in the time and effort needed. The brokerage business requires constant lead sourcing and follow-up, as well as staying on top of the progress of each job. Additionally, freight brokers need to put in the work of operating their business in line with state and federal regulations over time. Failing to exert the energy required to keep up with all the aspects of a brokerage business will lead to a less-than-successful business.

Avoiding these common mistakes as a new freight broker will help ensure your business stays operating successfully both now and in the future.


Eric WeisbrotEric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.



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Welcome to "One-Off Sound-Off," a blog page devoted to guest commentary on all things supply chain. This is a space where industry leaders can share their opinions and expertise with the logistics and supply chain community. If you have an article or commentary you'd like to share, please consider sending a guest blog proposal to [email protected].


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