Editor’s Note: In a recent video, two industry experts from 3Gtms, Ron Lee, the company’s Chief Product and Technology Officer, and JP Wiggins, the company’s VP of Corporate Development, discuss ways they’ve seen their brokerage customers capitalize off the surging market and provide tips for how other brokerages can grow their business. Below are some highlights from their conversation, and you can also watch the full video below.
In a supply chain industry that’s booming, freight brokerages are no exception. Some estimates indicate a 36% compounded annual growth rate between now and 2028. Other sources like Gartner are reporting that 20% of all freight currently goes through brokerages. With that type of expected volume, freight brokers are naturally looking for ways to expand their business.
Ways for Freight Brokers to Grow Their Business
Our growth-focused brokerage customers have started trying to win all their customers’ freight versus focusing solely on truckload (TL) brokerage. These brokerages begin by talking to their existing shippers and identifying gaps where the brokerage could help. For companies trying to grow quickly, it’s easier to offer more services to current customers than finding net new accounts. However, in an industry with 17,000 players, how do brokerages stand out and avoid becoming a commodity?
Brokerages get ahead by expanding their carrier network, simplifying carrier onboarding, delivering shipment visibility, and improving process management across the entire operation. It’s also important for brokerages to simplify, centralize, and consolidate the technologies that they use. Ideally, having everything available on one screen so that an entire book of business can be executed without jumping between platforms. This is the best way for brokers to use technology as a force multiplier, allowing load planners to increase the number of loads they can manage exponentially.
Other than standard process and technology changes, what other specific ways can brokers grow their business? The first is by expanding from TL brokerage to less-than-truckload (LTL). Technologies today can help make this a seamless transition, but there are still pitfalls that brokers should avoid. The second is to expand from brokerage into managed transportation services, also known as a 3PL. This step occurs when a broker introduces technology to shippers and uses that technology to manage freight on behalf of the shipper.
The TMS Decision
The trick to growing efficiently is implementing a technology platform that grows with the brokerage business. One that executes TL loads now, grows to LTL brokerage options, and then expands into managed transportation services. A software system like this helps brokers avoid the need to implement a new transportation management system (TMS) when they grow, saving large amounts of time and money.
The TMS decision is one of the biggest that brokers will make. This technology operates as a system-of-record, execution platform, and central command center for day-to-day operations. There are many items to consider, but at the core, broker technology needs to handle the basics like rating, tendering, automated communications, and freight auditing. However, brokers growing the fastest use a system that goes a step further and easily lets them expand into LTL and managed transportation services. In a supply chain that isn’t slowing down, it’s time for brokers to take advantage of the many opportunities, identify their goals, and grow as fast as possible.
Ron Lee is the Co-Founder of Pacejet and Chief Product and Technology Officer at 3Gtms; JP Wiggins is the Co-Founder and Vice President of Corporate Development at 3Gtms. If you want to learn more, please register for the latest webinar from 3Gtms titled, Loads of Perspective: Tips to Accelerate Growth in Freight Brokerage. Two career brokers now working for 3Gtms will chat for 30 minutes about their secrets to winning the most loads and delivering a brag-worthy customer experience.
Watch the full conversation below: