How to Vet Digital Freight Brokerage Partners

There are a lot of national and international digital freight brokerage partners (DFB) on the market, so how do you choose the right one with which you should work? In this article, we’ll outline steps you can implement to efficiently assess which digital freight brokerages are a fit with your business to ensure you’re partnering with the best in the industry.  

What is a digital freight brokerage? 

A digital freight broker is an individual or company that matches shipping entities to automated capacity, pricing, and load tendering solutions that create scalability and improved market buying capabilities.  

Different from working with an asset-based carrier, digital freight brokerages typically do not own the assets they utilize to coordinate shipping transactions. Instead, they serve as the link between their customers (you) and the carriers they have relationships with. Carriers contracted by digital brokerages can range in size from owner-operators, possessing on average one to five trucks, all the way up to national fleets that have several hundreds of tractors and trailers at their disposal.  

With the flexibility to partner with an unlimited number of carriers, digital freight brokerages can service a large collection of customers across various industry verticals and modes of transportation at affordable rates. They also have a lower capital risk, so they tend to be more financially stable than asset-based carriers. While working with an asset-based carrier is still the traditional way for many companies to transport products and goods, it’s no longer the most efficient way to handle complex logistical processes.  

Learn more about the benefits of a digital freight broker here.    

Having said all that, how do you choose the freight brokerage that will be the best partner for your business?  

Step 1 - Check their credentials.

First and foremost, make sure the broker is registered with the Federal Motor Carrier Safety Administration (FMCSA). Unfortunately, there are brokers who aren’t licensed, insured, or bonded with the governing bodies of the transportation industry. To ensure you don’t end up in hot water, verify they are officially licensed with the FMCSA.  

Review their license and insurance coverage, particularly liability insurance, errors and omissions, and contingent cargo insurance. In the case of loss or damage claims, you want to be covered. 

Moreover, you may also want to look into their financial situation to ensure they can pay their carriers and will handle your funds accordingly. If they have a lot of legal disputes, are late paying vendors, or aren’t profitable, they likely won’t be the best partner for you.  

Step 2 - Ask for a reference.

If a freight broker is proud of their service, they’ll be more than willing to connect you with a current customer as a reference. This is a great way to see what kind of experience and relationship other customers have with the broker as well as the quality of service and offerings. Along with customer references, search online for broker ratings and other testimonials.

If you see a broker’s name consistently popping up in a positive light, they’re probably worth checking out.  

Step 3 - See if they have multimodal offerings.

In general, multimodal freight brokers are usually the right choice for most shippers. Utilizing multiple modes, like ocean, air, trucking, and rail, will help you most efficiently transfer your goods with the greatest speed and lowest cost, and gives customers the flexibility they need to navigate ever-changing markets. 

Not only do you need multimodal transportation for goods coming from far away, but sometimes using a multimodal plan is simply the most efficient strategy for certain routes. Brokers with multiple modal options can better optimize routing and respond to capacity shortages in a timely manner.  

Most brokers will offer basic truckload service, but what are their specific multimodal offerings and advantages?  

Step 4 - Inquire about their other services.

Check out what other service options the broker has available. Aside from multimodal offerings, for example, do they provide warehousing, logistics management services, supply chain consulting, auditing and accounting, data analytics and reporting, or integrated technology services?  

It’s not necessarily that you want to work with the company that has the most offerings, although that might often be the case. Rather, you want to find the company with the best quality services that fit your specific logistical needs.  

Even better, you want a company that can customize its service offerings to fit your supply chain model. No two businesses are alike, so cookie-cutter brokerage plans rarely ever work. At Redwood Logistics, we develop custom solutions for every area of your supply chain based on your unique logistics challenges so that you see the highest level of growth and success.

It all starts with a free consultation, so reach out to us now to get started.  

Step 5 - Ask what technologies they use.

Digital freight brokers are unique in that they leverage digital tools and platforms to enable customers to collect and analyze large quantities of data to make better supply chain decisions. Inquire what technologies they implement and how those tech services and software will bring value and ROI for your network.  

Redwood Logistics prides itself on our innovative technology, leveraged at each point of the supply chain to create the most streamlined solutions. Learn more about some of our tech offerings here.  

Step 6 - Look at their carrier selection and network.

Examining your freight brokerage partner’s carrier selection process is another essential area to review. Ensuring they have a rigorous selection process is crucial as it will indicate a healthy carrier network to select capacity from for your shipments.  

Ask how the freight broker verifies each carrier’s operating authority, safety, and experience. Inquire about how they handpick their network and manage their carriers. You can even ask to see a copy of their correspondence with certain carriers to understand the depth and comprehensiveness.  

You will also want to learn about a broker’s network coverage capabilities to gauge if their network strengths align with your regional or national business needs.  

You’ll be using these transporters and warehouses indirectly, so make sure your broker has a system of effectively selecting and managing their network of freight carriers.  

Step 7 - Talk to their team.

Is their team experienced and knowledgeable? How long have they been in the business? Do they have expertise working within your logistical challenges? Are they dependable and trustworthy? Can you envision working with them long-term? Do they enjoy building relationships with their clients and carrier partners?

Many of these questions will be answered by doing research and chatting with their current customers, but you may also want to talk to some of the team members to get an idea of the overall “feel” of the brokerage. Read some of our best practices for dealing with freight brokers here.  

Ultimately, like any business relationship, you want to make sure you’re going to be partnering with a freight broker that has the same values as your organization and has your best interests in mind.  

If you want flexible freight management solutions tailored to your business, then it’s worth your while to check out Redwood Logistics. You’ll love our extensive service offerings, multimodal options, handpicked carrier network, advanced technological implementations, experienced team, and our custom solutions.