Don't Let Inefficiency Eat Your Bottom Line:
8 Areas to Improve
Your Freight Brokerage
Harness Efficiency for Freight Brokerage Success
Elevate your freight brokerage’s resilience and efficiency with Tai Software. By refining eight crucial processes, you can slash workloads by 50% and empower your team for sustainable success and enhanced profitability.
Streamlining Success: A Deep Dive into Eight Critical Areas
- Receiving Orders from Clients
- Quoting Shipments
- Searching for Load Coverage
- Track and Trace
- Updating Clients
- Gathering Paperwork
- Carrier Bill Audit
- Invoicing
The Eight Areas of Improvement
There are eight individual touchpoints in the transportation process where bottlenecks and increased costs often occur. To thoroughly study each area, gather your team and work together to answer probing questions about the people performing each task, the tools used, and the resources needed. These questions help identify and research the cause of everyday issues. In addition, the answers to those questions can offer clues to improving performance.
Receiving Orders from Clients
Every load order represents dollars in the bank. Yet, many brokers don’t have a standard process for receiving and responding to orders.
Overflowing inboxes can lead to massive inefficiencies. It is essential to understand how long it takes your brokers to open and respond to an email order. If you don't know, time them from the minute the email is received to responding to the customer. Calculate how much time you could save each team member if you eliminated the data entry step.
EDIs should boost connectivity and productivity, but many EDIs aren’t maintained in-house. They are maintained by third-party vendors, who may not be reliable. Track how often you experience transmission failures and how much time your team spends troubleshooting issues instead of processing orders.
No matter how your team receives orders, if they aren't recording each order in a database or TMS, you have no way can’t accurately measure win rates. If your team manually enters bulk shipments in a TMS, ask if they include all load information or just basic details.
Quoting Shipments
While your quotes should be accurate and competitive, your quoting process should also be efficient. Many customers may accept the first reasonable bid they receive, especially if they are in a time crunch.
Brokerages often rely on one expert using a process they've perfected but never formally documented. There are more efficient ways to run or scale a brokerage. If you have one pricing specialist on your team, evaluate whether it slows down or confuses the pricing process. Ask your reps if they are waiting for quotes or if they would know how to quote a bid if the pricing specialist is unavailable. Also, consider the long term and evaluate what will happen as your business grows.
Evaluate how your reps determine both spot quotes and contract rates. Measure how long it takes your team to respond to a client's quote request and the process they take. If there is no standard process, your less experienced reps are probably either taking too much time by doing a lot of research or making guesses at rates that may not cover your margin. In both scenarios, you're losing money. Growing a freight business without a standard pricing process is very challenging.
Digital integration is a common challenge for many transportation companies. The McKinsey report cited that 34% of providers have as many as nine different software solutions in their tech stacks. That is only a blessing if the solutions work well together. Evaluate the tools (TruckStop, DAT, FreightWaves Sonar, GreenScreens) your team uses, and the time it takes them to quote rates. While tools are helpful in accurately quoting a price, accessing multiple tools and manually comparing and contrasting rates slow down your team's ability to price a load quickly. In addition, if these tools aren't integrated into a single dashboard, the insights they provide are lost for future use. Ask your reps if they use these tools to track quotes and win rates to inform their decision-making.
Searching for Load Coverage
The areas of improvement in this part of your workflow hinge on two essential elements: the strength of your carrier network and your team’s use of load boards.
Optimizing carrier relationships is a priority. Ask if your team members know and regularly use preferred carriers. If there is no regular rating system or method to find your preferred carriers, track how long it takes a broker to find this information and/or whether they bother to do so. You will likely find inaccuracies and inefficiencies there. Uncover how your team communicates with carriers when searching for coverage. If it’s email, you may be losing critical messages in spam filters. Or busy reps may be burning response time. Ask your team if they have visibility into all carrier interactions for consistency and trackability. In addition, carrier compliance helps your team stay accurate and honest and improves customer service. This starts with comprehensive carrier onboarding. Review your onboarding packet and the time it takes to onboard a new carrier. You want to find the optimal balance between accuracy and speed.
Load boards aren’t always the most effective way to book a carrier for your customers, but they sometimes are the only option. Optimizing this process can significantly enhance your margins. Estimate how much time you may save if both posting and reposting were automated through your TMS. In addition, evaluate how your team uses load board data to quote loads and where that data is stored. If your team isn’t aggregating all quoting information into a central place, you may be missing out on valuable data that would help your team quote more accurately in the future.
Track and
Trace Loads
If your customers wait to hear back from you on their loads or your carriers are bombarded by phone calls, emails, and texts from your team, neither partner will be happy. A good working partnership starts with an efficient and consistent tracking process.
To evaluate your current process, map out your team's workflow. Note whether they are making manual phone calls to check on loads or using tracking tools from carriers or in-house tools. Check for areas where inaccuracies or gaps in visibility cause tracking delays. For manual processes, track how long it takes for carriers to return calls and how long it takes for your reps to record the information. Find out if this process is used by everyone on the team or if every team member has their own process.
Updating Clients
As you study the track and trace step, remember that your rep must relay the information to the customer. Your customers expect consistent, timely, and accurate updates.
Measure the time and tools your team uses. Compare your team's process to the process your clients would prefer. Is it the same? For example, some clients prefer email, but your reps make phone calls. Because of this disconnect, clients may be missing your team's updates. Evaluate whether your team is using the best communication channels for updates.
Gathering Paperwork
Collecting the paperwork needed (invoices, POD, BOLs, and more) to bill a customer can be time-consuming and tedious. Yet, this crucial step is necessary for optimized cash flow.
Every minute your team spends gathering paperwork delays payment collection, which can be very costly. If some customers are regularly late with their payments, look back upstream to see if they are late because they are waiting for paperwork. Thoroughly document how your team gathers, stores, and processes load paperwork. Note if documents are delivered in batches or individually and who can access them. Track the average time to collect all the paperwork and process each invoice.
Invoicing
There is often a 30-day difference in payment terms between shippers and carriers, leaving you limbo. The sooner your invoices are released, the faster that gap closes.
As you review the tasks involved in this step, look for opportunities to speed up the process. If you manually create invoices and email them to customers, measure how long it takes to turn an audited bill into an invoice.
It may help to look upstream for inefficiencies. For example, if you don't use a common pricing model, your team may inadvertently generate inaccurate quotes, resulting in more audits.
Carrier Bill Audit
The audit process can be full of inefficiencies. As vital as this process is, comparing every invoice to the corresponding quote can be tedious, and it’s time-consuming to follow up on any discrepancies. Any barriers to completing this step cause more delays in invoicing and payment. It will also hurt your company’s cash flow and relationships with trusted carriers.
Document your audit process, including its efficacy and the time it takes your team to audit bills and resolve discrepancies. Rebills and delays in payment can significantly hurt your relationships with clients. Evaluate how you communicate with clients when discrepancies happen.
It may help to look upstream for inefficiencies. For example, if you don't use a common pricing model, your team may inadvertently generate inaccurate quotes, resulting in more audits.