Virtually every carrier uses freight brokers and digital providers in their network to book spot freight, but a good third-party logistics provider (3PL) can do a lot more.
Whether you source a majority of your loads from brokers or just leverage them to fill the occasional empty backhaul, developing strategic relationships with core providers can help grow your trucking business.
To get a carrier’s insight on how to develop these relationships, we asked Dustin Vock, Director of Business Development at Meiborg Brothers Trucking, to share his experience optimizing their broker network.
When I joined Meiborg Brothers two years ago, I was immediately excited by their commitment to growth — we constantly have the pedal to the metal.
With plans to nearly double our fleet size to over 300 trucks in the next five years, we aren’t slowing down anytime soon.
To achieve these goals, we’ll have to do more than buy trucks and hire drivers — we will need a lot more of the right freight opportunities to fill them.
Currently, we source around 65% of our freight directly from shippers, getting roughly 35% from brokers and 3PLs, like Coyote.
As we continue to scale up, it becomes increasingly important to establish a core group of strategic providers that will supplement our network.
That’s why my top priority when I started at Meiborg was conducting an audit of all our freight providers. We needed to take stock of what we had, identify who was contributing to our business goals and create a roadmap for the future.
I know what it takes, from both parties, to have a mutually beneficial relationship.
I actually started my career working on the other side of the relationship, first as a third-party carrier sales rep, then at a few other logistics providers before making the move to a trucking company.
Firsthand experience with multiple aspects of the trucking industry gave me a diverse perspective that has been extremely valuable when setting our sourcing strategy — I know what it takes, from both parties, to have a mutually beneficial relationship.
Below are some basic questions I ask when evaluating provider relationships. If you work with brokers or 3PLs in your business, you can use these to conduct an audit, critically evaluate your providers and ultimately determine who is a good fit for your business.
Question 1: Do they help us deliver on our key success metrics?
Before you can evaluate whether or not a broker is contributing to your success, you need to first define what “success” means to your business. Once you establish and track key performance indicators (KPIs), you can effectively audit your providers.
At Meiborg, we primarily focus on the following to judge our performance:
- Revenue per day
- On-time performance
- Equipment utilization
- Accessorial management
When evaluating brokers, I look at how they contribute to each of our core KPIs.
Do they have enough available loads to provide us with opportunities when and where we need them? Are we booking enough freight with them to justify managing another broker? Do they give us the appointments and communication we need to be successful to the end customer? Are they reasonable with accessorials?
If a provider is not helping you maintain or improve your core KPIs, they may not be a good fit for your network.
Question 2: Do they have available loads that match our fleet’s needs?
Every carrier operates their business differently — different sizes, different regions, different equipment types. Develop strategic relationships with 3PLs with opportunities that can actually empower your business to grow.
We have dry van and refrigerated equipment, as well as hazmat, tanker-endorsed and cross-border (Mexico and Canada) drivers. I work with providers that can connect me with most of those types of freight, in the regions and lanes I need them.
Not every broker needs to provide everything, but if they don’t clearly fit into an important area of our business’s needs, then it isn’t worth managing another relationship.
Question 3: Do they make an effort to learn our business?
Having loads that meet our needs is one thing — making an effort to learn our needs so we can actually access those loads is another.
Though a broker is technically paying us, I only want to work with providers that treat us like the customer. A good 3PL will make an effort to learn what’s important to my fleet.
For instance, we run diverse equipment types in diverse regions. We favor dedicated contractual freight opportunities with drop and hooks whenever possible because it simplifies our truck planning and improves efficiency.
We don’t have a strong focus on adding broker spot freight, especially with excessive deadhead — it’s just not how we typically operate.
I only want to work with providers that treat us like the customer. A good one will make an effort to learn what’s important to my fleet.
We also have about 65% outbound customer freight, leading to consistent, specific backhaul needs.
If a broker isn’t taking all of these factors into consideration, and actively scouring their network to bring us opportunities that fit, they aren’t adding value.
Question 4: Can they connect us with freight opportunities we wouldn’t be able to get ourselves?
Though we’re not a massive carrier, we aren’t small either. With ~170 trucks, we are able to secure a decent amount of opportunities directly with shippers.
I need my 3PLs to connect me with opportunities that we can’t access otherwise, whether it’s due to relationship or lack of resources.
"Good providers will equip us with the tools we need to succeed."
For example, a large shipper may have loads that are perfect for our network but require a minimum of 300 trucks to participate in their bid. A scaled 3PL with a solid relationship can help us access that freight.
They will give us additional insight into how a shipper operates so we can deliver on their expectations — whether it’s onboarding calls, regular KPI reporting, or insight into quoting strategy, good providers will equip us with the tools we need to succeed.
They will also have the geographic coverage and density to fill gaps, so I can feel confident sending my drivers anywhere in North America knowing I’ll be able to source a backhaul.
Question 5: Do they have the right technology?
At Meiborg, we leverage about 60% people and 40% tech to run our fleet, but the percentage of tech we use will increase as we grow. We use a transportation management system (TMS) and are always exploring new ways to integrate technology to improve our efficiency.
We prefer 3PLs that can meet us where we’re at. We need tech tools that make it easy to connect, whether it’s digital tracking, load booking or managing payment.
“We need tech tools that make it easy to connect.”
For instance, with Coyote, our dispatchers book spot loads on digital channels (CoyoteGO®) which makes it easy for us to find what need quickly. Since Q3 2018, we’ve increased our digital booking with Coyote by over 450%.
Question 6: Do they have the right people in place?
At Meiborg, we leverage the digital channels to speed up day-to-day operations but rely on expert help for the more strategic opportunities.
Some providers offer one or the other, but we look for both — technology alone doesn’t give us everything we need in a 3PL.
We need a team we trust to help us connect with the right opportunities, troubleshoot, resolve issues and plan for the future.
I also rely on good providers to give me quoting insight, showing their current average spend and explaining market insights so we can adjust our strategy. It doesn’t always work out, but their perspective keeps us from quoting blindly.
When evaluating the human aspect, we look for the same qualities we expect of our team: transparency, honesty, hard work and strong communication.
A single point of contact managing the relationship can be especially important when navigating shippers. That level of attention is something that technology can’t replace in my view.
"We look for the same qualities we expect of our team: transparency, honesty, hard work and strong communication."
For instance, we had an issue one night with a rescheduled appointment leading to a missed pickup — which was not completely our fault. The customer was very upset and wanted us removed from the lane.
I didn’t have to go to bat for myself — my Coyote rep did it for me. They pulled the data, showing we had been well over 90% on-time for over 160 orders, and leveraged their relationship to smooth everything out.
Time to Start Your Provider Audit
With these six basic questions, you can thoroughly examine who is adding value to your business and who isn’t.
- Do they help us deliver on our core success metrics?
- Do they have available loads that match our fleet’s needs?
- Do they make an effort to learn our business?
- Can they connect us with freight opportunities we wouldn’t be able to get ourselves?
- Do they have the right technology?
- Do they have the right people in place?
There is no hard-and-fast rule to applying these — every business will care about different aspects — but it will offer a more complete view of your network.
Write down all the most important attributes that your business needs in a provider. Put them into a table or Excel spreadsheet, then score each provider on a scale of 1 to 5.
It is an easy, quick and concrete way to approach an audit. Below is a sample template covering all the content in this post to help you get started. Once you score each provider, tally it up and start comparing.
Looking for a 3PL that can help grow your business?
Coyote gives you the best of both worlds -- a dedicated rep and digital solutions that connect you to the right opportunities for your fleet from a diverse network of over 14,000 shippers.
Join the Coyote network and start hauling.