Negotiating Load Fees As A Small Carrier

While the freight business is dominated by larger carriers, they are forced to brush with broad strokes, leaving a great opportunity for smaller carriers to pick up smaller, one-off, or less-traveled routes as an excellent niche—and even more so as freight has been shuffled by the Coronavirus pandemic.  Unfortunately, many smaller carriers haven’t yet established the resources to drive down costs and maximize profit margins.  While this may be true for your business, there are ways to position your business better with the load broker to increase your opportunities as well as rates.

Communicate With Load Brokers

“It’s just business.”  While that’s true, being a better business partner to the broker will increase both their confidence in your performance, dependability, and can be enough to sway them to recommend your business over a competitor, even if you’re a bit more expensive.  Considerations such as equipment maintenance, excellent driving record, low number of insurance claims instill confidence.  Also, be responsive and decisive—figure out your numbers and get back to them with a ‘yes’ or ‘no.’  Remember: the broker isn’t just about the lowest rate, they want repeat business just as much as you, so providing the customer safe, reliable delivery is valuable in their minds.

Develop a Good Rapport

It’s unlikely you’ll receive the rates you’re after when working with a broker for the first time, but consider this opportunity as a job interview or audition—you’re proving to them that you can perform.  This certainly doesn’t mean drive for a loss, but respectfully negotiate a trial rate that works for both parties, and don’t feel compelled to lock in a guaranteed low rate for future deliveries.  By proving your ability your communicate, deliver on time, and damage free will likely make the phone ring from that broker again.

Know Your Numbers

Brokers and direct customers alike will ask for discounts on loads.  When you know your costs including driver, insurance, equipment maintenance, and fuel (variable), you will be prepared to respond with either the proposed price or, if you have some wiggle room, a reduction for repeat business. You may find working with the right invoice factoring company may also have inroads with fuel savings cards which can give you that little extra wiggle room for negotiating and still maintaining a sustainable profit on a load.

Develop Flexible Pricing

Creating multiple pricing structures is nearly impossible when first starting out, but after some time, as you become familiar with seasonal market patterns, equipment maintenance, and fuel costs, it’s possible to design structured frees for recurring loads for a client.  Designing multiple pricing structures based on frequency and consistency of load size/weight, you’ll be viewed as more accommodating, expanding your opportunities and generating more revenue for your business.

If you’re finding you’re spending an inordinate amount of time and money with equipment down for repair, consider purchasing a new or off-lease tractor or trailer through the transportation equipment financing experts at ENGS.  We offer competitive rates, fast funding and insurance products, and a growing inventory of quality, off-lease equipment for sale.