Using a freight broker as a specific service is not necessarily restrictive if it suits your company’s needs, but working with a 3PL provider will know your unique business supply chain needs intimately.

A 3PL can also offer other value-added services that a freight broker might lack.

At the top level, the core component of what a forwarder or broker does is manage the shipments between a shipper and a carrier.

When discussing the movement of goods, some assume the terms “freight forwarder” and “freight broker” can be used to refer to the same thing.

This couldn’t be further from the truth as, beyond their simple semantics, there are very practical differences between the two.

Freight Broker Definition

Freight brokers oversee the movement of freight by connecting the appropriate shippers and carriers.

Brokers must be registered with the Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) for brokerage authority.

But brokers don’t necessarily take possession of the freight. Freight brokers primarily handle shipments with U.S.-based originations and destinations.

While a freight broker can have the ability to handle international movements, those movements are usually in one specific area of expertise.

Freight Broker vs Customs Broker

According to the US’ Department of Homeland Security:

“Customs brokers are private individuals, partnerships, associations or corporations licensed, regulated and empowered by U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting Federal requirements governing imports and exports. Brokers submit necessary information and appropriate payments to CBP on behalf of their clients and charge them a fee for this service.”

Further, customs brokers submit necessary information and appropriate payments to CBP on behalf of their clients and charge them a fee for this service.

In short, a freight broker is an intermediary between a shipper and freight service provider within a country’s borders.

Whereas a customs broker is the intermediary between an importer, or exporter, and a government’s customs department in the country of destination.

Freight Forwarder Definition

Freight forwarders not only coordinate the shipping of freight for their customers, but can also serve the logistical needs for warehousing their products.

More importantly, freight forwarders can handle international shipments moving from country to country through their foreign commerce operating authority provided by the FMCSA.

To put a finer point on it, a freight forwarders clear the movement of freight from one country to another, navigating or “forwarding” shipments through the many legal requirements in each location. 

Freight forwarders will typically ship freight under their own bills of lading. Additionally, they also provide assembly and consolidation services.

They can book cargo space for customers, often directly with the ocean or air provider, and negotiate rates for transport.

The Difference Between A Freight Forwarder and Freight Broker

The main difference between freight brokerage and freight forwarding is that a freight forwarder can take possession of the freight, often to consolidate multiple types of freight, whereas a broker does not.

Therefor, forwarding offers a larger, more encompassing scope of services with specific terminologies and legal requirements.

A freight broker is a service that connects a shipper and freight service provider within the country – often specializing in a certain type of freight transportation such as equipment hauling.

In contrast, freight forwarder is a company that organizes shipments, often internationally, for companies and manufacturers to get their goods from initial production to final point of distribution.

Trust Brimich Logistics To Move Your Goods

Whether you need to move your freight across the country or around the world, Brimich Logistics has the expertise to handle all your freight brokerage, freight-forwarding, and logistical needs.

Capacity crunch and driver shortage has caused serious issues in many businesses’ supply chains and has increased the demand for drop trailer / drop and hook shipping programs.

What is a drop trailer program?

A drop trailer program is when a carrier brings a tractor to the loading dock and picks up a trailer loaded previously. Drop-and-hook takes the process of trailer shipping one step further. A carrier will arrive with an empty trailer to drop, pick up a loaded trailer, and continue on.

In the US, many shippers are now considering such programs mainly because of the new hours of service rules issued by the Federal Motor Carrier Safety Administration (FMCSA) which are more strictly monitored by the ELD mandate.

Drop trailer services can also have a significant impact on the efficiency of your supply chain. Drop trailer programs help shippers and carriers plan more effectively for deliveries and outbound shipments as it’s important for them to align their schedules.

Without drop trailers, a carrier must arrive within a narrow time window to load or unload the trailer. Depending on how the appointment coordinates with their on-duty schedule, and considering other conditions such as traffic, weather, breakdowns or unexpected events, the driver may be forced to wait for hours, thus missing the appointment altogether.

In these situations, detention fees, late delivery fees, and a negative vendor scorecard are unpleasant results.

Drop Trailer Benefits for Carriers:

• Better trailer planning. You decide when you pick up and drop off.
• No more waiting to pick up a load or be live-loaded.
• Great for time-consuming loads, like floor-loaded freight.
• Higher delivery percentages that are on time.

Drop Trailer Benefits for Shippers:

• A smoother supply chain operation. You can load or unload a trailer at your convenience or when staffing levels are adequate; no more paying overtime to load or unload when a truck is early or late.
• Superior for time-consuming loads.
• Avoid extra driver or truck detention charges.
• Higher on-time delivery percentages.
• Decrease fines from strict retail Must Arrive By Date (MABD) requirements.
• Better retailer relationships with vendor scorecard performance.

On the downside, there may be an initial cost to implement a program. Every trailer that a carrier takes out of over-the-road service is lost revenue, so to recoup it, there will be a cost for a drop trailer. Of course, this cost will pay for itself because there should never be any detention fees.

Drop trailers should not become warehouses; the maximum time a trailer should sit is a week. In most drop trailer programs, trailers turn two or three times a week.

Final Thoughts

There’s a lot of up-front heavy lifting to implement a drop trailer program. Not all carriers supply a drop trailer service therefor finding one that does can be time-consuming. Trailers make carriers money, if one of your carriers doesn’t want to drop a trailer, simply look at using a different one.