For any business, adding any new freight provider to your shipping operations can be a cause for anxiety.
It's a hassle to onboard.
You need to build trust.
And what about freight brokers?
Do they really add value? Do you really need a one in your LTL shipping network?
If You Don't Work With an LTL Freight Broker, You Probably Should
Many shippers don’t know the full extent of the services freight brokers (also called third-party logistics companies, or 3PLs) provide.
You’d be forgiven if you share the common misconception that they simply connect shippers to carriers for a fee.
The reality couldn’t be further from the truth, especially in a mode as complicated as less-than-truckload (LTL) shipping.
- For Inexperienced Shippers:
You are in far more danger of incurring unexpected and unpleasant charges — and getting higher rates.
- For Experienced Shippers:
Even if your business has moved thousands of LTL shipments, a 3PL can offer you crucial ways to save money and optimize your internal resources.
Let's unpack all the reasons why you should add an LTL freight broker to your network.
7 Reasons Why You Should Use a 3PL for Your LTL Freight:
When you’re a small business, the buying power of a larger 3PL is a major asset in securing a great rate for your LTL freight.
There are two main ways brokers can help you find better rates.
More Competitive Blanket Rates
Compared to the U.S. truckload market, the LTL carrier market is much more consolidated — around 200 LTL carriers versus 900,000 TL carriers.
This gives LTL carriers much more power to set their own rates for your freight based on their own network of drivers and facilities and their own priorities.
If you go to a carrier directly as a small business with only a few shipments per month, you’re not likely going to be able to access their most competitive rates.
However, if you work with a broker you can ship under a blanket rate they’ve negotiated with the carrier based on their much larger total volume of freight.
Because 3PLs are such large, consistent customers for LTL carriers, this rate is very likely to beat what you’ll find on your own.
Easier Access to Customer-Specific Pricing
Shippers who have freight that is non-standard in any ways — unusual size, accessorials, service requirements etc. — can benefit from customer-specific pricing (CSP) to control their rates.
The process of setting this up can be complex, but the experienced professionals at a good 3PL can help you out.
Less experienced shippers might not know about the different ways you can ship LTL freight.
Between standard LTL, volume LTL and partial truckload, you actually have multiple options to ship without booking a full truck.
A 3PL broker can help you identify which carriers offer the most attractive rates and best service in the mode you need. They can find the unique solution your unique freight deserves.
By tapping into the wide network of carriers they work with, a good 3PL can also help you balance national, regional, subregional and other types of LTL carriers to optimize your shipping operations.
If you go it alone, you will have to put in an unsustainable amount of time and resources to access the options your rep at a 3PL has right in front of them.
The more your business grows, the more carriers you’re going to need to work with to get your freight where it needs to go.
And more carriers moving your freight means more points of contact, more conversations and more potential headaches.
3PLs can simplify your carrier relationships by:
1. Setting and tracking KPIs.
Your broker will talk with you about your supply chain needs, wants and nice-to-haves to ensure your carriers are doing their best to make them happen.
They can help you identify the right key performance indicators (KPIs) for your network and track whether your carriers are meeting them.
2. Communicating with carriers when performance needs to improve.
If carriers are frequently missing their delivery estimates, damaging too many pallets or missing on their KPIs in any other way, your 3PL can let them know and work on a plan to get better.
3. Managing damage claims.
LTL damage claims are a nuisance for every shipper, and knowing the right people can go a long way toward resolving them painlessly.
3PLs typically have executive-level contacts at the carriers who will be moving your freight, and conversations around damaged goods go much smoothly when they’re with a friendly face.
3PLs know that time is money, and they want to put their considerable technical resources to use to help you save both.
If you’re looking for a broker for your LTL freight, choose one that offers some or all of the following technology options.
1. Instant quoting and booking.
A digital freight platform is a great place to start.
3PLs should let you enter your freight information, instantly retrieve quotes from all carriers in their network who could conceivably move your freight and let you book the one that works for you with a single click.
2. Tracking consistent across multiple carriers.
Working with more carriers than you can call, email or otherwise check in on with a team your size?
That’s no problem for a 3PL, whose digital portal should give you a holistic view of your freight’s movements throughout your network.
3. API/EDI connectivity.
By connecting to your 3PL’s API or EDI, you can take advantage of all their other benefits while continuing to complete you day-to-day work in your familiar ERP, TMS or WMS system.
You can also integrate ecommerce, billing and shipping functions to help keep your customers happy.
If your business is growing quickly, chances are your internal logistics team is already stretched close to its limits.
As your supply chain needs expand, the work involved in meeting them grows exponentially. That’s where a 3PL comes in.
Some of ways freight brokers can reduce the strain on your internal team include:
Consolidate points of contact.
Brokers will have one or two key contacts managing your account, meaning all your needs — quoting, booking, billing, claims resolution — will go through one familiar face.
Minimize time spent quoting and building.
The more loads per day you ship, the more times you’ll have to enter all those pesky details: size, weight, freight class, dates, zip codes and so on. When you notice you’re employing a bigger and bigger team to handle all of it, it might be time to let a 3PL lighten the load.
Monitor your network.
Don’t worry about calling each of your carriers to check in about the progress of your freight. Your broker can do that for you.
Even though there aren’t thousands of LTL carriers operating in the U.S., there are still enough that you can’t be expected to keep up with all of them.
Freight brokers not only know the lay of the land, they maintain business relationships with a substantial subset of the LTL field.
This means whatever you need to move, wherever you need it to go, they’ll have a carrier or carriers to get it there.
And if your go-to carrier can’t handle your load for whatever reason — lead time, local embargoes, capacity issues or anything else — your broker can step in and find someone who can.
3PLs can connect you to regional, sub-regional and local carriers as well as those that offer specialty services like reefer LTL.
One of the most reliably annoying parts of shipping LTL is the feeling that you’re being nickel-and-dimed by your carriers.
While that’s not necessarily the most productive way of looking at it, it’s still true that you’re more likely to see fees pop up when you move freight LTL than when you book a full truckload.
Your broker can lean on their relationships with carriers and their years of expertise to help you avoid or manage some of the most common LTL fees.
Some of the charges a smart 3PL can help you avoid are:
When you ship through a 3PL, you might find that some of the ubiquitous LTL accessorials are either lower-cost or waived entirely based on the contract the broker has worked out with the carrier.
Oversize load charges.
If your broker is really looking out for you, they can work with you to tighten up your shipping practices so you don’t get hit with annoying fees each time your freight hangs just an inch off the pallet.
Freight class and NMFC codes are some of the trickiest parts of LTL shipping for new shippers to manage. Your broker will have a detailed conversation with you about your freight’s material, density and packaging to make sure you classify it correctly every time.
See How This Growing LTL Shipper Took a Load Off by Trusting Coyote
“We definitely try to leverage the people who are experts in areas we aren’t. We aren’t shipping experts by any means, so we rely on our representatives.”
– Brad Youst, CEO and Founder, Bootstrap Farmer
Bootstrap Farmer saw their home greenhouse and gardening supply business take off during the COVID-19 pandemic, and they needed a broker they could trust to handle their growing shipping needs.
Find out how Coyote’s experienced team of LTL pros helped Bootstrap Farmer optimize their supply chain.