Managing freight means dealing with a lot of variables. Whether it’s fluctuations in fuel cost, supply chain issues, or coordinating multiple carriers, these factors inevitably push against consistent consumer demand for reliable delivery and pricing.
Negotiating freight rates while managing client expectations is an art that all freight brokers look to master. Done well, it ensures happy customers and long-term partnerships with a number of transport providers.
Of course, no broker needs to be told the day-to-day mechanics of negotiation. That’s your bread and butter. That said, with over 80 4PLs already using our platform as their central operating FMS, the following are the key considerations we hear from our network. Just consider these your daily affirmations.
CONTENTS
Do your homework on carrier rates
Have a clear understanding of customer needs
Incentivise long-term relationships with carriers
Be strategic with your conversations
Flexibility to create bespoke multi-carrier solutions
Leverage tools that make freight management easier
Do your homework on carrier rates
Preparation is key. That goes for all business dealings, really. But definitely when it comes to negotiating with transport providers. Before entering into any negotiations, you should be across standard rates and services of all relevant carriers. This takes some research, but will give you a better view of the playing field and points of comparison. Most importantly, it provides a starting point for negotiations.
Understanding the state of the market and range of services offered by different carriers will give you a solid foundation for what you plan on discussing.
Have a clear understanding of customer needs
The homework doesn’t stop there, of course. As a third-party acting as the intermediary between businesses and carriers, you also need a strong understanding of your own clients’ needs in order to align them with the offerings of potential carriers.
You should be able to clearly define what those needs are. That might relate to volume, how frequently they’re shipping, where they’re shipping to, any special requirements and so on. The more specific you are, the better position you’re going to be in and the more transparent you can be about carriers and costs. The last thing you want is to be in the final stages of negotiations when you’re forced to go back and re-engineer the solution because there was something you missed in the early stages.
Creating a ‘freight profile’ for customers is a potential first step. This includes typical consignment specs, the type of goods being shipped, and common delivery areas. Once you’ve identified their needs, you can set clear goals and key negotiation points on behalf of your clients before engaging carriers.
Incentivise long-term relationships with carriers
Good freight management is about building sustainable relationships with carriers. That means being honest about needs and expectations and encouraging them to do the same thing.
Building rapport organically can be easier said than done, especially in the early stages. So the first step is being reliable and as transparent as possible. With carriers, it’s beneficial to emphasise the potential for long-term agreements.
Propose value exchanges, such as long-term contracts, volume commitments, or service guarantees, to incentivise carriers to offer competitive rates and services. Both carriers and customers are more likely to offer favourable terms when the potential for a long-term partnership is on the table.
See MachShip’s growing list of carrier integrations.
Be strategic with your conversations
Following on from the point above, how you frame conversations is key. For example, rather than asking for a one-off quote, the promise of sustained business goes a long way.
Try to create win-win situations. Remember: it’s contractual, not transactional. Things can change. Demand can fluctuate. Market rates are volatile. Like home loans with variable versus fixed rates. Variable rates are volatile. With fixed rates, you know what you’re getting. Long-term freight agreements give all parties something to plan around. And carriers are more inclined to offer more favourable rates if there’s a mutual understanding of more business in the future.
Aside from how you interact on a person to person level, data sharing can be a tangible way of building business partnerships. Data sharing enhances the level of transparency between brokers and carriers, getting everyone on the same page.
Flexibility to create bespoke multi-carrier solutions
The logistics landscape has undergone huge changes in recent years. From supply chain challenges, to the meteoric rise of eCommerce, along with increasing consumer expectations.
Freight markets are competitive. With this, there’s a growing trend of more bespoke solutions. Rather than the big players monopolising the market with template services, ‘lower tier’ providers are increasingly looking to get involved in the carrier mix. Having more options is great – assuming you’re equipped to make it work.
MachShip’s vast suite of integrations helps to facilitate this, so you’re able to reach the best, most cost-effective solutions – not just the standard options. This allows brokers to get more creative in how they structure their service offering. For their customers, this means they can get more tailored solutions at a really good rate. You can flex up or flex down according to your clients’ needs, without ever becoming too reliant on any one carrier.
Providing flexible shipping options gives you more opportunities to potentially consolidate consignments. By doing that, you’re reducing the number of journeys required to deliver freight which can streamline costs for your customers.
See how MachShip helps you manage freight directly from within your system of choice.
Leverage tools that make freight management easier
Scalability is pivotal. Whether you want access to more carrier options, or grow your client base without having to double-up on repetitive admin. An all-in-one platform is a huge help.
With over 500 carrier integrations (and more added every month), MachShip gives you access to native integrations that are ready to go out of the box. The platform supports multi-carrier solutions to easily tailor and pass onto your customers with best-in-class service. It also greatly reduces the touchpoints typically involved in freight management and client onboarding. Rather than having to pull everything together manually, MachShip keeps everything integrated within one platform.
For example, for customers with similar profiles, you can use the freight cards you’ve already uploaded into MachShip and leverage reporting functions (like a ‘bulk quote report’). This allows you to estimate what a given freight profile is likely to be worth over a 12-month period. No repeated uploading required. You don’t have to procure those rates again or do more off-platform admin in terms of creating things like CSVs or pivot tables. It’s all there for you already.
Understanding the technology you have allows you to fully leverage its features and maximise efficiency right across your business. Things like tracking performance and cost. Automated invoice reconciliation. Targeted, real-time reporting. It all adds up, not only in the time you can save, but in providing the kind of insight that truly strengthens your negotiating position.
The way MachShip allows you to manage data within a few clicks, helps you to have meaningful conversations – not only with your customers, but also with carrier partners. By not having to pull separate data sources together, you save huge amounts of time and resources. Suddenly, your ‘cost to serve’ becomes a lot more efficient.
Summary
At the end of the day, MachShip is a purpose-built software solution for 4PLs. The platform doesn’t force you to do your job a certain way or prioritise any particular carrier over another (aside from the filters you can choose to apply through our platform).
We’re agnostic when it comes to carriers, and don’t have relationships with them at a rate level. This independence enables brokers to have access to more options, so that they can build the most effective solutions for their clients.
What MachShip does do, is make your life a lot easier when it comes to streamlining admin, and building the most effective carrier mix for your clients.
This gives you hours back in your day and more margin in your budget, so you can focus on building strong partnerships to help your business thrive.