There has been a trend for shippers to turn to non-asset logistics providers to compare rates and move their freight. The non-asset logistics provider, also known as freight broker, has seen a change in the industry with the passing of the MAP-21, a system to weed out brokers that were operating a very small business and tended to be more likely to go out of business quickly and without warning which left shippers responsible for duplicate payments of invoices. MAP-21 established more requirements for brokers such as implementing a surety bond for conducting business that $10,000 prior to MAP-21 to $25,000, which provided more security to businesses using broker services. Although the passing of MAP-21 decreased the number of non-asset logistics brokers, competition still remains. As more companies offer brokerage services, it can be difficult to choose a provider and price isn’t always the best indicator. Here are a few things to look for when choosing a non-asset logistics provider:
- Partnership Mentality: One of the most important qualities to look for in a non-asset logistics provider is that you are treated like a partner in every transaction. These types of providers will have your best interest in mind at all times. You should feel just as much a part of their business as they are a part of yours.
- Reputable: One of the best indicators of a business’s reputation is how they have performed in the past. Finding out how long the company has been in business is a good way to gauge their experience. Aside from their history, it’s important that they also are financially stable. The more stable a logistics provider is than the less risk you will take on when conducting business with them.
- Flexible: The non-asset logistics provider that you choose should be flexible when it comes to your needs. These providers should be able to arrange your shipment regardless of location, timing, or size. Their creativity paired with available resources should make completing your shipments an effortless task from your perspective.
- Reliable: Your operation may present an unexpected need requiring an expedited solution. An exceptional provider will be prepared to conduct business at any time and will be able to overcome these kinds of challenges. You should be able to provide your requirements to your contact and be presented with a solution.
- Dedicated: Keeping that partnership mentality in mind, your provider should be dedicated to your business. They should know your business and what it entails including what type of freight you have and what is involved in moving that freight. It should be instinctual for them to know what you need. It’s also important they are available at any time. The better the communication is, the easier the process to move your freight will be.
- Multiple Service Lines: Having options is incredibly important in choosing the right provider. The ability to reach multiple service lines gives shippers the opportunity to find the best mode to ship. You want a provider that has connections to intermodal, less-than-truckload, and international modes and can focus on the best mode for the move based on either price or service.
- Personable: Bigger isn’t always better, especially when it comes to finding a broker. Ideally, you want someone whose workload allows them to establish a meaningful relationship with you. You want to know that your company is a priority and in time you can depend on your relationship to continue to do business and have trust that the job will be completed and meet all expectations.
- Proactive: Being proactive is key to saving time and money in your supply chain. The right broker should be able manage their business with you in a way that gets ahead of the issues that often arise in this business. They are prepared and should be able to consult on a plan for your freight as it relates to the current conditions in the market.
- Accountable: Let’s face it, exceptions occur from time to time. The importance is how these providers handle the exceptions as they occur. If a load is running late, will you get a heads up or be surprised by it? The way a provider reacts to an exception is telling on the way they conduct their business. Look for an open and honest provider that will take responsibility for their actions and continue to keep your best interest in mind.
- Technology: Technology is considered one of the most important challenges that non-asset logistics providers face. You want to look for providers that are equipped with the right tools that will be able to manage your shipment and give you visibility. Whether it is their own developed technology or they use a third-party system, they should be able to provide you with information quickly and efficiently. As technology advances and demand for transparency increases, these providers will need to grow in order to reflect and meet the needs of shippers.
There are a lot of factors to be considered when choosing the right non-asset logistics provider for your company. Forming the right partnership can contribute to a successful and painless process for future business.