Simply defined an LTL Broker is a non asset based (does not own or operate tractors & trailers) service company who has pricing agreements directly with LTL carriers and offers LTL pick up and delivery services through these carriers at a mark up. They bill you directly and then settle with the LTL carriers.
Using LTL Brokers as an alternative to dealing directly with an LTL carrier can in some cases provide the best LTL rates. That's what everyone wants...the world's best freight quote on every shipment, right? I am amazed at how much time and effort some small to medium sized companies spend daily in making several phone calls or accessing several web sites where they can shop their shipments for the cheapest possible discount freight quote du jour.
Far too many of these daily shoppers end up sub optimizing the competitiveness of the LTL quote they end up selecting. They are told or otherwise assume that the LTL Broker can offer a better freight price because they can use their collective volume of business to negotiate deeper pricing with the LTL carriers. This is true for the Mom & Pop shippers out there. Unfortunately a surprising number of those companies who spend hours browsing or calling for today's best discount freight quote greatly underestimate the power of their own collective volume of business when competently and professionally represented directly to the LTL carrier group.
A professionally negotiated "Core Carrier" LTL program tailored to client specific business rules and service requirements can generally deliver more competitive pricing than most LTL Brokers can offer to companies who ship as little as $30,000 to $50,000 a year or more in LTL shipments. A Core Carrier program reduces the number of LTL carriers, and properly utilizes and leverages all available inbound, outbound and third party LTL volumes. When these programs are backed up by the discipline of Route Guide implementation, Non Compliance reporting, and freight bill audit and payment services the payback is impressive. The payback can easily be measured by more competitive pricing and freeing up and redeploying staff time spend burning up the net or dialing for dollars.
While LTL Brokers may have blanket pricing from the LTL carriers, that blanket pricing in combination with a mark up often is not your best discount freight option. The LTL carriers won't always give blanket pricing and when and if they do they are smart enough not to allow resellers to erode their client base by giving them deeply discounted pricing.
If you are dialing for dollars everyday you might want to consider contacting a transportation spend management firm who can design, deliver and implement a managed Core Carrier LTL program for you and support you in managing that program. Even after paying the management firm's fee, the savings in your LTL costs alone could be as much as 20% to 30% or more.
| Think you're paying too much for your LTL Freight? View DSi's LTL Rates in real-time to compare. |
